N.J. Admin. Code § 11:4-6.12

Current through Register Vol. 56, No. 21, November 4, 2024

Section 11:4-6.12 - Tests for adequacy and reasonableness of contract reserves

(a) Annually, an appropriate review shall be made of the insurer's prospective contract liabilities on contracts valued by tabular reserves, to determine the continuing adequacy and reasonableness of the tabular reserves giving consideration to future gross premiums. The insurer shall make appropriate increments to such tabular reserves if such tests indicate that the basis of such reserves is no longer adequate, subject, however, to the minimum standards of 11:4-6.1 0.

(b) In the event a company has a contract or a group of related similar contracts, for which future gross premiums will be restricted by contract, regulations of the Department or any other regulatory entity, or for other reasons, such that the future gross premiums reduced by expenses for administration, commissions, and taxes will be insufficient to cover future claims, the company shall establish contract reserves for such shortfall in the aggregate.

R.1984 d.512, eff. 11/5/1984.
See: 16 New Jersey Register 2225(a), 16 New Jersey Register 3039(a).
Recodified from 6.6.