N.J. Admin. Code § 11:4-6.18

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

Section 11:4-6.18 - Reserves for waiver of premium

(a) Where an insurer calculates tabular reserves using the 1964 CDT, 85CIDA, 85CIDB or any other table based on exposures that include contracts on premium waiver as in-force contracts rather than a table based on "active lives," reserves shall be valued on the following basis:

1. Claim reserves shall include reserves for premiums expected to be waived, valuing as a minimum the valuation net premium being waived.

2. Premium reserves shall include contracts on premium waiver as in-force contracts, valuing as a minimum the unearned modal valuation net premium being waived.

3. Contract reserves shall include recognition of the waiver of premium benefit in addition to other contract benefits provided for, valuing as a minimum the valuation net premium to be waived.

(b) If an insurer is valuing reserves on a true "active life" table, or if a specific valuation table is not being used, but the insurer's gross premiums are calculated on a basis that includes in the projected exposure only those contracts for which premiums are being paid, it may not be necessary to provide specifically for waiver of premium reserves. Any insurer using such a true "active life" basis shall consider whether or not additional liability should be recognized on account of premiums waived during periods of disability or during claim continuation.

N.J. Admin. Code § 11:4-6.18