31A-17-511. Reserve calculation -- Valuation net premium exceeding the gross
premium charged.
(1) If in any contract year the gross premium charged by any life insurance company on
any policy or contract is less than the valuation net premium for the policy or contract calculated
by the method used in calculating the reserve thereon but using the minimum valuation standards
of mortality and rate of interest, the minimum reserve required for such policy or contract shall be
the greater of either the reserve calculated according to the mortality table, rate of interest, and
method actually used for such policy or contract, or the reserve calculated by the method actually
used for such policy or contract but using the minimum valuation standards of mortality and rate
of interest and replacing the valuation net premium by the actual gross premium in each contract
year for which the valuation net premium exceeds the actual gross premium. The minimum
valuation standards of mortality and rate of interest referred to in this section are those standards
stated in Sections 31A-17-504 and 31A-17-506.
(2) Provided that for any life insurance policy issued on or after January 1, 1997, for
which the gross premium in the first policy year exceeds that of the second year and for which no
comparable additional benefit is provided in the first year for such excess and which provides an
endowment benefit or a cash surrender value or a combination thereof in an amount greater than
such excess premium, the foregoing provisions of this section shall be applied as if the method
actually used in calculating the reserve for such policy were the method described in Section
31A-17-507, ignoring Subsection 31A-17-507(2). The minimum reserve at each policy
anniversary of such a policy shall be the greater of the minimum reserve calculated in accordance
with Section 31A-17-507, including Subsection 31A-17-507(2), and the minimum reserve
calculated in accordance with this section.
Enacted by Chapter 305, 1993 General Session
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Last revised: Thursday, May 28, 2009