Alabama Administrative Code Chapter 482-1-076 — Procedures For Recognizing A New Annuity Mortality Table For Use In Determining Reserve Liabilities For Annuities

482 Alabama Department of Insurance

Ala. Admin. Code r. 482-1-076-.01 Authority

This Chapter is promulgated by the Commissioner of Insurance pursuant to Sections 27-2-17 and 27-36A-1 to 27-36A-20, Code of Ala. 1975.

History

• Author: Reyn Norman, Associate Counsel
• Authority: Code of Ala. 1975, §§27-2-17; 27-36A-1 - 27-36A-20.
• New Rule: December 6, 1985; effective December 16, 1985. Revised: October 23, 1998; effective January 1, 1999. Filed for codification in the Alabama Administrative Code by the Department of Insurance on January 17, 2003, pursuant to the Code of Ala. 1975, §27-7-43. Amended: Published June 28, 2024; effective July 1, 2024. Published with LSA June 28, 2024. This rule is not subject to the Alabama Administrative Procedure Act.

Ala. Admin. Code r. 482-1-076-.02 Purpose

The purpose of this Chapter is to recognize the following mortality tables for use in determining the minimum standard of valuation for annuity and pure endowment contracts: the 1983 Table "a," the 1983 Group Annuity Mortality (1983 GAM) Table, the Annuity 2000 Mortality Table, the 2012 Individual Annuity Reserving (2012 IAR) Table, and the 1994 Group Annuity Reserving (1994 GAR) Table.

History

• Author: Reyn Norman, Associate Counsel
• Authority: Code of Ala. 1975, §§27-2-17; 27-36A-1 - 27-36A-20.
• New Rule: December 6, 1985; effective December 16, 1985. Revised: October 23, 1998; effective January 1, 1999. Filed for codification in the Alabama Administrative Code by the Department of Insurance on January 17, 2003, pursuant to the Code of Ala. 1975, §27-7-43. Amended: Filed August 6, 2014; effective January 1, 2015. Filed with LRS August 6, 2014. Rule is not subject to the Alabama Administrative Procedure Act. Amended: Published June 28, 2024; effective July 1, 2024. Published with LSA June 28, 2024. This rule is not subject to the Alabama Administrative Procedure Act.

Ala. Admin. Code r. 482-1-076-.03 Definitions

The following definitions shall apply for purposes of this Chapter:

(a) 1983 Table "a". That mortality table developed by the Society of Actuaries Committee to Recommend a New Mortality Basis for Individual Annuity Valuation and adopted as a recognized mortality table for annuities in June 1982, by the National Association of Insurance Commissioners. [See 1982 Proceedings of the NAIC II, page 454.]

(b) 1983 GAM Table. That mortality table developed by the Society of Actuaries Committee on Annuities and adopted as a recognized mortality table for annuities in December 1983, by the National Association of Insurance Commissioners. [See 1984 Proceedings of the NAIC I, pages 414 to 415.]

(c) 1994 GAR Table. That mortality table developed by the Society of Actuaries Group Annuity Valuation Table Task Force. The 1994 GAR Table is included in the report on pages 865-919 of Volume XLVII of the Transactions of the Society of Actuaries (1995).

(d) Annuity 2000 Mortality Table. That mortality table developed by the Society of Actuaries Committee on Life Insurance Research. The Annuity 2000 Mortality Table is included in the report on pages 211-249 of Volume XLVII of the Transactions of the Society of Actuaries (1995).

(e) Period table. A table of mortality rates applicable to a given calendar year (the Period).

(f) Generational Mortality Table. A mortality table containing a set of mortality rates that decrease for a given age from one year to the next based on a combination of a Period table and a projection scale containing rates of mortality improvement.

(g) 2012 IAR Table. That Generational mortality table developed by the Society of Actuaries Committee on Life Insurance Research and containing rates, qx²⁰¹²⁺ⁿ, derived from a combination of the 2012 IAM Period Table and Projection Scale G2, using the methodology stated in Rule 482-1-076-.07.

(h) 2012 Individual Annuity Mortality Period Life (2012 IAM Period) Table. The Period table containing loaded mortality rates for calendar year 2012. This table contains rates, qx²⁰¹², developed by the Society of Actuaries Committee on Life Insurance Research and is shown in Appendices 1-2.

(i) Projection Scale G2 (Scale G2). A table of annual rates, G2x, of mortality improvement by age for projecting future mortality rates beyond calendar year 2012. This table was developed by the Society of Actuaries Committee on Life Insurance Research and is shown in Appendices 3-4.

History

• Author: Reyn Norman, Associate Counsel
• Authority: Code of Ala. 1975, §§27-12-17 and 27-36A-1 to 27-36A-20.
• New Rule: December 6, 1985; effective December 16, 1985. Revised: October 23, 1998; effective January 1, 1999. Filed for codification in the Alabama Administrative Code by the Department of Insurance on January 17, 2003, pursuant to the Code of Ala. 1975, §27-7-43. Amended: Filed August 6, 2014; effective January 1, 2015. Filed with LRS August 6, 2014. Rule is not subject to the Alabama Administrative Procedure Act. Amended: Published June 28, 2024; effective July 1, 2024. Published with LSA June 28, 2024. This rule is not subject to the Alabama Administrative Procedure Act.

Ala. Admin. Code r. 482-1-076-.04 Individual Annuity Or Pure Endowment Contracts

(1) Except as provided in Paragraphs (2) and (3) of this Rule, the 1983 Table "a" is recognized and approved as an individual annuity mortality table for valuation and, at the option of the company, may be used for purposes of determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after July 30, 1979.

(2) Except as provided in Paragraph (3) of this Rule, either the 1983 Table "a" or the Annuity 2000 Mortality Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 1987.

(3) Except as provided in Paragraph (4) of this Rule, the Annuity 2000 Mortality Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 1999.

(4) Except as provided in paragraph (5) of this rule, the 2012 IAR Mortality Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after (the effective date of this amended regulation).

(5) The 1983 Table "a" without projection is to be used for determining the minimum standards of valuation for an individual annuity or pure endowment contract issued on or after January 1, 1999, solely when the contract is based on life contingencies and is issued to fund periodic benefits arising from any of the following:

(a) Settlements of various forms of claims pertaining to court settlements or out of court settlements from tort actions.

(b) Settlements involving similar actions such as worker’s compensation claims.

(c) Settlements of long term disability claims where a temporary or life annuity has been used in lieu of continuing disability payments.

History

• Author: Reyn Norman, Associate Counsel
• Authority: Code of Ala. 1975, §§27-2-17; 27-36A-1 - 27-36A-20 .
• New Rule: December 6, 1985; effective December 16, 1985. Revised: October 23, 1998; effective January 1, 1999. Filed for codification in the Alabama Administrative Code by the Department of Insurance on January 17, 2003, pursuant to the Code of Ala. 1975, §27-7-43. Amended: Filed August 6, 2014; effective January 1, 2015. Filed with LRS August 6, 2014. Rule is not subject to the Alabama Administrative Procedure Act. Amended: Published June 28, 2024; effective July 1, 2024. Published with LSA June 28, 2024. This rule is not subject to the Alabama Administrative Procedure Act.

Ala. Admin. Code r. 482-1-076-.05 Group Annuity Or Pure Endowment Contracts

(1) Except as provided in Paragraphs (2) and (3) of this Rule, the 1983 GAM Table, the 1983 Table "a" and the 1994 GAR Table are recognized and approved as group annuity mortality tables for valuation and, at the option of the company, any one of these tables may be used for purposes of valuation for any annuity or pure endowment purchased on or after July 30, 1979, under a group annuity or pure endowment contract.

(2) Except as provided in Paragraph (3) of this Rule, either the 1983 GAM Table or the 1994 GAR Table shall be used for determining the minimum standard of valuation for any annuity or pure endowment purchased on or after January 1, 1987, under a group annuity or pure endowment contract.

(3) The 1994 GAR Table shall be used for determining the minimum standard of valuation for any annuity or pure endowment purchased on or after January 1, 1999, under a group annuity or pure endowment contract.

History

• Author: Reyn Norman, Associate Counsel
• Authority: Code of Ala. 1975, §§27-2-17; 27-36A-1 - 27-36A-20.
• New Rule: December 6, 1985; effective December 16, 1985. Revised: October 23, 1998; effective January 1, 1999. Filed for codification in the Alabama Administrative Code by the Department of Insurance on January 17, 2003, pursuant to the Code of Ala. 1975, §27-7-43. Amended: Published June 28, 2024; effective July 1, 2024. Published with LSA June 28, 2024. This rule is not subject to the Alabama Administrative Procedure Act.

Ala. Admin. Code r. 482-1-076-.06 Application Of The 1994 GAR Table

In using the 1994 GAR Table, the mortality rate for a person age x in year (1994 + n) is calculated as follows:

qx¹⁹⁹⁴⁺ⁿ=qx¹⁹⁹⁴(1-AAx)ⁿ

where the qx¹⁹⁹⁴s and AAxs are as specified in the 1994 GAR Table.

History

• Author: Reyn Norman, Associate Counsel
• Authority: Code of Ala. 1975, §§27-2-17; 27-36A-1 - 27-36A-20.
• New Rule: December 6, 1985; effective December 16, 1985. Revised: October 23, 1998; effective January 1, 1999. Filed for codification in the Alabama Administrative Code by the Department of Insurance on January 17, 2003, pursuant to the Code of Ala. 1975, §27-7-43. Amended: Published June 28, 2024; effective July 1, 2024. Published with LSA June 28, 2024. This rule is not subject to the Alabama Administrative Procedure Act.

Ala. Admin. Code r. 482-1-076-.07 Application Of The 2012 IAR Mortality Table

(1) In using the 2012 IAR Mortality Table, the mortality rate for a person age x in year (2012 + n) is calculated as follows:

qx²⁰¹²⁺ⁿ= qx²⁰¹²(1-G2x)ⁿ

(2) The resulting qx²⁰¹²⁺ⁿ shall be rounded to three decimal places per 1,000, e.g., 0.741 deaths per 1,000. Also, the rounding shall occur according to the formula above, starting at the 2012 period table rate.

(3) For example, for a male age 30, qx²⁰¹²= 0.741.

qx²⁰¹³= 0.741 * (1 – 0.010) ^ 1 = 0.73359, which is rounded to 0.734. qx²⁰¹⁴= 0.741 * (1 – 0.010) ^ 2 = 0.7262541, which is rounded to 0.726.

(4) A method leading to incorrect rounding would be to calculate qx²⁰¹⁴ as qx²⁰¹³ * (1 – 0.010), or 0.734 * 0.99 = 0.727. It is incorrect to use the already rounded qx²⁰¹³ to xcalculate qx²⁰¹⁴.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17; 27-36A-1 - 27-36A-20.
• New Rule: Filed August 6, 2014; Effective January 1, 2015. Filed with LRS August 6, 2014. Rule is not subject to the Alabama Administrative Procedure Act. Amended: Published June 28, 2024; effective July 1, 2024. Published with LSA June 28, 2024. This rule is not subject to the Alabama Administrative Procedure Act.

Ala. Admin. Code r. 482-1-076-.08 Separability

If any provision of this Chapter or the application thereof to any person or circumstances is for any reason held to be invalid, the remainder of the Chapter and the application of such provision to other persons or circumstances shall not be affected thereby.

History

• Author: Reyn Norman, Associate Counsel
• Authority: Code of Ala. 1975, §§27-2-17; 27-36A-1 - 27-36A-20.
• New Rule: December 6, 1985; effective December 16, 1985. Revised: October 23, 1998; effective January 1, 1999. Filed for codification in the Alabama Administrative Code by the Department of Insurance on January 17, 2003, pursuant to the Code of Ala. 1975, §27-7-43. Amended: Filed August 6, 2014; effective January 1, 2015. Filed with LRS August 6, 2014. Rule is not subject to the Alabama Administrative Procedure Act. Amended: Published June 28, 2024; effective July 1, 2024. Published with LSA June 28, 2024. This rule is not subject to the Alabama Administrative Procedure Act.
• Editor's note: Rule .07 was renumbered .08 as per certification filed August 6, 2014, effective January 1, 2015.

Ala. Admin. Code r. 482-1-076-.09 Effective Date

The provisions of this Chapter shall become effective January 1, 2015, upon its approval by the Commissioner of Insurance, and upon its having been on file as a public document in the office of the Secretary of State for ten days.

History

• Author: Reyn Norman, Associate Counsel
• Authority: Code of Ala. 1975, §§27-2-17; 27-36A-1 - 27-36A-20.
• New Rule: December 6, 1985; effective December 16, 1985. Revised: October 23, 1998; effective January 1, 1999. Filed for codification in the Alabama Administrative Code by the Department of Insurance on January 17, 2003, pursuant to the Code of Ala. 1975, §27-7-43. Amended: Filed August 6, 2014; effective January 1, 2015. Filed with LRS August 6, 2014. Rule is not subject to the Alabama Administrative Procedure Act. Amended: Published June 28, 2024; effective July 1, 2024. Published with LSA June 28, 2024. This rule is not subject to the Alabama Administrative Procedure Act.
• Editor's note: Rule .08 was renumbered .09 as per certification filed August 6, 2014, effective January 1, 2015.

Ala. Admin. Code r. 482-1-076-AI 2012 IAM Period Table, Female

APPENDIX I

2012 IAM Period Table

Female, Age Nearest Birthday

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17; 27-36A-1 - 27-36A-20.
• New Rule: Filed August 6, 2014; Effective January 1, 2015. Filed with LRS August 6, 2014. Rule is not subject to the Alabama Administrative Procedure Act. Amended: Published June 28, 2024; effective July 1, 2024. Published with LSA June 28, 2024. This rule is not subject to the Alabama Administrative Procedure Act.

Ala. Admin. Code r. 482-1-076-AII 2012 IAM Period Table, Male

APPENDIX II

2012 IAM Period Table

Male, Age Nearest Birthday

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17; 27-36A-1 - 27-36A-20.
• New Rule: Filed August 6, 2014; Effective January 1, 2015. Filed with LRS August 6, 2014. Rule is not subject to the Alabama Administrative Procedure Act. Amended: Published June 28, 2024; effective July 1, 2024. Published with LSA June 28, 2024. This rule is not subject to the Alabama Administrative Procedure Act.

Ala. Admin. Code r. 482-1-076-AIII Projection Scale G2, Female

APPENDIX III

Projection Scale G2

Female, Age Nearest Birthday

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17; 27-36A-1 - 27-36A-20.
• New Rule: Filed August 6, 2014; Effective January 1, 2015. Filed with LRS August 6, 2014. Rule is not subject to the Alabama Administrative Procedure Act. Amended: Published June 28, 2024; effective July 1, 2024. Published with LSA June 28, 2024. This rule is not subject to the Alabama Administrative Procedure Act.

Ala. Admin. Code r. 482-1-076-AIV Projection Scale G2, Male

APPENDIX IV

Projection Scale G2

Male, Age Nearest Birthday

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17; 27-36A-1 - 27-36A-20.
• New Rule: Filed August 6, 2014; Effective January 1, 2015. Filed with LRS August 6, 2014. Rule is not subject to the Alabama Administrative Procedure Act. Amended: Published June 28, 2024; effective July 1, 2024. Published with LSA June 28, 2024. This rule is not subject to the Alabama Administrative Procedure Act.