Section 3.21.925. Segment and contract segmentation method defined.

	(a)  For purposes of 3 AAC 21.900 - 3 AAC 21.949, the contract segmentation method  
		(1) is the method in which the amount of time from issuance of a policy to the mandatory expiration of a policy is divided into successive segments, with the length of each segment determined under (b) of this section;  
		(2) makes all calculations using  
			(A) for policies issued before January 1, 2009, the 1980 CSO valuation tables or other valuation mortality tables under 3 AAC 28.600 - 3 AAC 28.690;  
			(B) for policies issued on or after January 1, 2009, valuation mortality tables under 3 AAC 28.600 - 3 AAC 28.690, as required under 3 AAC 28.620(c); and  
		(3) if elected by the insurer, uses the minimum mortality standard for deficiency reserves under 3 AAC 21.905(e) and (f).  
	(b)  Subject to (c) of this section, the length of a segment is equal to the minimum value of t for which Gt is greater than Rt.  
	(c)  If Gt is never greater than Rt, the length of the segment is the number of years from the beginning of the segment to the mandatory expiration of the policy.  
	(d)  In this section,  
		(1)  CLICK TO VIEW  FORMULA
			(A) if GPx+k+t is greater than zero and GPx+k+t-1 is equal to zero, Gt is 1,000; or  
			(B) if GPx+k+t and GPx+k+t-1 are equal to zero, Gt is zero;  
		(2) GPx+k+t-1 is the guaranteed gross premium per $1,000 of face value for the year t of a segment, not including policy fees if the policy fees are level for the entire premium paying period of the policy;  
		(3) k is the number of years from the date the policy was issued to the beginning of the segment;  
		(4) qx+k+t-1 is the valuation mortality rate for deficiency reserves in policy year k+t using the select mortality factors in 3 AAC 21.905(g)(2) if the insurer elects to use the select mortality factors in 3 AAC 21.905(g)(3) to calculate deficiency reserves;  
		(5)  CLICK TO VIEW  FORMULA
		(6) t is one in the first duration of the segment, two in the second year of the segment, three in the third year of the segment, and for each successive segment the whole number that corresponds to the ordinal number of the year of the segment;  
		(7) x is original issue age.  

Authorities

21.06.090;21.18.110;21.18.160

Notes

Reference

3 AAC 21.949
3 AAC 28.635

Authority

AS 21.06.090 AS 21.18.110 AS 21.18.160

History

Eff. 1/1/2011, Register 196