Section 3.21.930. Segmented reserves.

	(a)  Segmented reserves are equal to the present value of all future guaranteed benefits minus the present value of all future net premiums to the mandatory expiration date of a policy subject to the following:  
		(1) the reserves must be calculated using segments produced by the contract segmentation method;  
		(2) net premiums within each segment must be a uniform percentage of the respective guaranteed gross premiums within the segment;  
		(3) the uniform percentage for each segment at the beginning of the segment must be determined so that the present value of the net premiums within the segment is equal to (PVDB) + (PVUCV) - (UGCV) + (NP), where  
			(A) (PVDB) is the present value of death benefits within the segment;  
			(B) (PVUCV) is the present value of any unusual guaranteed cash value as set out in 3 AAC 21.915(b) at the end of the segment;  
			(C) (UGCV) is any unusual guaranteed cash value as set out in 3 AAC 21.915(b) at the beginning of the segment;  
			(D) (NP) is, for the first segment only, the greater of zero and (NLP) ( OYTP), where  
				(i) (NLP) is a net level annual premium equal to the present value at the date of issue of the benefits provided for in the first segment after the first policy year divided by the present value at the date of issue of an annuity of one per year payable on the first and each subsequent anniversary date of the policy within the first segment on which a premium is due, where the NLP may not exceed the NLP for a 19-year premium whole life plan of insurance with the same renewal year equivalent level amount at an age one year higher than the age at issue of the policy; and  
				(ii) (OYTP) is a net one-year term premium for benefits provided in the first policy year;  
		(4) the interest rate used in determining the present value for any policy may not be greater than the maximum valuation interest rate determined with a guarantee duration equal to the sum Of the lengths of all segments of the policy.  
	(b)  Basic reserves and deficiency reserves calculated under (a) of this section must include future benefits and net premiums in all segments.  

Authorities

21.06.090;21.18.110;21.18.160

Notes

Authority

AS 21.06.090 AS 21.18.110 AS 21.18.160

History

Eff. 1/1/2011, Register 196