This section sets how adjusted premiums and present values are computed for certain ordinary policies, including the mortality table and interest-rate limits to use.
Sec. 1105.152. COMPUTATION OF ADJUSTED PREMIUMS FOR CERTAIN ORDINARY POLICIES ISSUED BEFORE JANUARY 1, 1989. (a) Except as provided by Subsection (b), this section applies only to an ordinary policy to which Subchapter B does not apply and that is issued on or after January 1, 1974 and before January 1, 1989. (b) This section also applies to an ordinary policy issued by a company after a date specified in a written notice: (1) that was filed by the company with the State Board of Insurance after August 23, 1963, but before January 1, 1974; and (2) under which the company filing the notice elected to comply before January 1, 1974, with the law codified by this section. (c) An adjusted premium or present value determined under this chapter as to a policy to which this section applies must be computed on the basis of the Commissioners 1958 Standard Ordinary Mortality Table. (d) A computation as to a policy to which this section applies must be made using the rate of interest specified by the policy for computing cash surrender values and paid-up nonforfeiture benefits, except that the rate of interest may not exceed: (1) 3-1/2 percent a year for a policy issued before June 14, 1973; (2) 4 percent a year for a policy issued on or after June 14, 1973, and before August 29, 1977; (3) 5-1/2 percent a year for a policy issued on or after August 29, 1977, other than a single premium whole life or endowment insurance policy; or (4) 6-1/2 percent a year for a single premium whole life or endowment insurance policy issued on or after August 29, 1977. (e) For a category of ordinary insurance issued to insure a female risk: (1) an adjusted premium or present value for a policy issued before August 29, 1977, may be computed according to an age not more than three years younger than the actual age of the insured; and (2) an adjusted premium or present value for a policy issued on or after August 29, 1977, may be computed according to an age not more than six years younger than the actual age of the insured. (f) In the computation of the present value of paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may not exceed the rates shown in the Commissioners 1958 Extended Term Insurance Table. (g) Subject to approval by the department, a company may specify a mortality table other than the table required by this section for use in computing an adjusted premium or present value for insurance issued on a substandard basis. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1, 2003.