N.J. Admin. Code § 11:4-6.9

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

Section 11:4-6.9 - Contract reserves-general requirements

(a) Contract reserves are required, unless otherwise specified in 11:4-6.9(b), for:

1. All individual and group contracts with which level premiums are used; or

2. All individual and group contracts with respect to which, due to the gross premium pricing structure at issue, the value of the future benefits at any time exceeds the value of any appropriate future valuation net premiums at that time. This valuation may be applied on a rating block basis if the total premiums for the block were developed to support the total risk assumed and expected expenses for the block each year, and a qualified actuary certifies the premium development. The actuary shall state in the certification that premiums for the rating block were developed such that each year's premium was intended to cover the year's costs without any prefunding. If the premium is also intended to recover costs for any prior years, the actuary shall also disclose the reasons for and magnitude of such recovery. The values specified in this paragraph shall be determined on the basis specified in 11:4-6.1 0.

(b) Contracts not requiring a contract reserve are contracts:

1. Which cannot be continued after one year from issue; or

2. Are already in force on January 21, 2003 for which no contract reserve was required under the immediately preceding standards.

(c) The contract reserve is in addition to claim reserves and premium reserves.

(d) The methods and procedures for contract reserves shall be consistent with those for claim reserves for a contract, or else appropriate adjustment shall be made when necessary to assure provision for the aggregate liability. The definition of the date of incurral shall be the same in both determinations.

N.J. Admin. Code § 11:4-6.9

R.1984 d.512, eff. 11/5/1984.
See: 16 New Jersey Register 2225(a), 16 New Jersey Register 3039(a).
Recodified from 6.3.