(1) In order to
assume that sufficient funds will be made available to make the refunds as
required and to guarantee promised benefits to policyholders, aggregate
reserves shall be at least equal to the sum of the following:
(a) For Single Premium
Credit Life Insurance:
1. If ages are available, the net single
premiums for the remaining benefits, calculated by a seriatim method using the
1960
Commissioner's Standard Group Table and interest of not more than 31/2%.
It is recommended that companies using this standard accumulate an additional
reserve to assure adequacy of funds for refunds and excess
claims on terminated
group policies or agency agreements. Approximate methods of calculating this
reserve liability may be approved by the
Commissioner provided:
(i) The actuarial derivation establishes
clearly that the method produces at least the minimum reserve; and
(ii) The assumptions on which the
approximation is based are checked for accuracy and validity against the
current business of the
insurer at least annually.
Approval of such methods shall be obtained prior to their use
and the annual verification of assumptions shall be filed with the
Commissioner; or
2. If ages are not available, the gross
unearned premium, on the "Rule of 78" or pro-rata basis as specified for
refunds, calculated exactly.
(b) For
Credit Life Insurance on the
outstanding balance plan:
Reserves shall be equal to the gross unearned premium
calculated upon a pro-rata basis.
(c) For
Credit Accident and Health Insurance:
Reserves shall be not less than the sum of all gross unearned
premiums, calculated as prescribed for premium refunds when the insurance is on
the single premium basis, or on a pro-rata basis if on the outstanding balance
plan.
(2) If, on
December 31, 1969, the reserves maintained on such business by any company are
on a lower basis than described above, the Commissioner, upon written request
of such company may approve a plan for the systematic accumulation of such
reserves. Such plan shall be accomplished within such time as the Commissioner
may deem proper.
(3)
REPEALED
Notes
Tenn. Comp. R.
& Regs.
0780-01-04-.10
Original rule filed
January 9, 1975; effective February 8, 1975. Repeal filed June 4, 1975;
effective July 4, 1975.
Authority: T.C.A. ยงยง
45-5-403,
56-7-901 and 56-8-110.
