Section 686A.445 - Cost indexes1. The life insurance surrender cost index is calculated by: (a) Determining the guaranteed cash surrender value, if any, available at the end of the 10th and 20th policy years.(b) For participating policies, adding the terminal dividend payable upon surrender, if any, to the accumulation of the annual cash dividends at 5 percent interest compounded annually to the end of the period selected and add this sum to the amount determined in paragraph (a).(c) Dividing the result obtained in paragraph (b) (or paragraph (a) for guaranteed cost policies) by an interest factor which converts it into an equivalent level annual amount which, if paid at the beginning of each year, would accrue to the value obtained in paragraph (b) (or paragraph (a) for guaranteed cost policies) over the periods stipulated in paragraph (a). If the period is 10 years, the factor is 13.207. If the period is 20 years, the factor is 34.719.(d) Determining the equivalent level premium by accumulating each annual premium payable for the basic policy or rider at 5 percent interest compounded annually to the end of the period stipulated in paragraph (a) and dividing the result by the respective factors stated in paragraph (c). (This amount is the annual premium payable for a level premium plan.)(e) Subtracting the result obtained in paragraph (c) from that of paragraph (d).(f) Dividing the result obtained in paragraph (e) by the number of thousands of the equivalent level death benefit to arrive at the life insurance surrender cost index.2. The life insurance net payment cost index is calculated in the same manner as the comparable life insurance cost index except that the cash surrender value and any terminal dividend are set at zero.Nev. Admin. Code § 686A.445
Comm'r of Insurance, LH-6 § IX, eff. 11-22-78