Minnesota Legislature
Office of the Revisor of Statutes
2007 Minnesota Statutes
This is an historical version of this statute chapter. Also view the most recent published version.
60A.765 CONTRACT RESERVES REQUIRED.
(a) Contract reserves are required, unless otherwise specified in paragraph (b) for:
(1) all individual and group contracts with which level premiums are used; or
(2) all individual and group contracts with respect to which, due to the gross premium pricing
structure at issue, the value of the future benefits at any time exceeds the value of any appropriate
future valuation net premiums at that time. This evaluation may be applied on a rating block basis
if the total premiums for the block were developed to support the total risk assumed and expected
expenses for the block each year, and a qualified actuary certifies the premium development. The
actuary must state in the certification that premiums for the rating block were developed such
that each year's premium was intended to cover that year's costs without any prefunding. If the
premium is also intended to recover costs for any prior years, the actuary must also disclose the
reasons for and magnitude of the recovery. The values specified in this clause must be determined
on the basis specified in section 60A.766, subdivisions 1 to 4.
(b) Contracts not requiring a contract reserve are:
(1) contracts that cannot be continued after one year from issue; or
(2) contracts already in force on August 1, 2004, for which no contract reserve was required
under the immediately preceding standards.
(c) The contract reserve is in addition to claim reserves and premium reserves.
(d) The methods and procedures for contract reserves must be consistent with those for claim
reserves for a contract, or else appropriate adjustment must be made when necessary to assure
provision for the aggregate liability. The definition of the date of incurral must be the same in
both determinations.
History: 2004 c 285 art 2 s 6
(a) Contract reserves are required, unless otherwise specified in paragraph (b) for:
(1) all individual and group contracts with which level premiums are used; or
(2) all individual and group contracts with respect to which, due to the gross premium pricing
structure at issue, the value of the future benefits at any time exceeds the value of any appropriate
future valuation net premiums at that time. This evaluation may be applied on a rating block basis
if the total premiums for the block were developed to support the total risk assumed and expected
expenses for the block each year, and a qualified actuary certifies the premium development. The
actuary must state in the certification that premiums for the rating block were developed such
that each year's premium was intended to cover that year's costs without any prefunding. If the
premium is also intended to recover costs for any prior years, the actuary must also disclose the
reasons for and magnitude of the recovery. The values specified in this clause must be determined
on the basis specified in section 60A.766, subdivisions 1 to 4.
(b) Contracts not requiring a contract reserve are:
(1) contracts that cannot be continued after one year from issue; or
(2) contracts already in force on August 1, 2004, for which no contract reserve was required
under the immediately preceding standards.
(c) The contract reserve is in addition to claim reserves and premium reserves.
(d) The methods and procedures for contract reserves must be consistent with those for claim
reserves for a contract, or else appropriate adjustment must be made when necessary to assure
provision for the aggregate liability. The definition of the date of incurral must be the same in
both determinations.
History: 2004 c 285 art 2 s 6
Official Publication of the State of Minnesota
Revisor of Statutes