Ins 2.80(5)(k) (k) At the option of the insurer, the following approach for reserves for attained-age-based yearly renewable term life insurance policies may be used:

Ins 2.80(5)(k)1. 1. Calculate the valuation net premium for each future policy year as the tabular cost of insurance for that future year.

Ins 2.80(5)(k)2. 2. Basic reserves may not be less than the tabular cost of insurance for the appropriate period, as defined in par. (f).

Ins 2.80(5)(k)3. 3. For deficiency reserves for each policy year, calculate the excess, if greater than zero, of the valuation net premium over the respective maximum guaranteed gross premium. Deficiency reserves may not be less than the sum of the present values, at the date of valuation, of the excesses determined in accordance with this subdivision.

Ins 2.80(5)(k)4. 4. For purposes of this paragraph, the calculations use the maximum valuation interest rate and the 1980 CSO valuation table with or without 10-year select mortality factors.

Ins 2.80(5)(k)5. 5. A policy shall be considered an attained-age-based yearly renewable term life insurance policy for purposes of this paragraph if both of the following apply:

Ins 2.80(5)(k)5.a. a. The premium rates, on both the initial current premium scale and the guaranteed maximum premium scale, are based upon the attained age of the insured such that the rate for any given policy at a given attained age of the insured is independent of the year the policy was issued.

Ins 2.80(5)(k)5.b. b. The premium rates, on both the initial current premium scale and the guaranteed maximum premium scale, are the same as the premium rates for policies covering all insureds of the same sex, risk class, plan of insurance and attained age.

Ins 2.80(5)(k)6. 6. For policies that become attained-age-based yearly renewable term policies after an initial period of coverage, the approach of this paragraph may be used after the initial period if both the following apply:

Ins 2.80(5)(k)6.a. a. The initial period is either constant or runs to a common attained age for all insureds of the same sex, risk class and plan of insurance.

Ins 2.80(5)(k)6.b. b. After the initial period of coverage, the policy meets the conditions of subd. 5.

Ins 2.80(5)(k)7. 7. If the election in this paragraph is made, this approach shall be applied in determining reserves for all attained-age-based yearly renewable term life insurance policies issued on or after the effective date of this section.

Ins 2.80 Note Note: Traditional reserves for attained-age-based yearly renewable term policies, the calculations of which this paragraph describes, are already adequate and sufficient. However, without this option, these policies would be subject to the more complex segmentation calculations.

Ins 2.80(5)(L) (L) Unitary basic reserves and unitary deficiency reserves need not be calculated for a policy if all of the following conditions are met:

Ins 2.80(5)(L)1. 1. The policy consists of a series of n-year periods, including the first period and all renewal periods, where n is the same for each period, except that for the final renewal period, n may be truncated or extended to reach the expiry age, provided that this final renewal period is less than 10 years and less than twice the size of the earlier n-year periods, and for each period, the premium rates on both the initial current premium scale and the guaranteed maximum premium scale are level.

Ins 2.80(5)(L)2. 2. The guaranteed gross premiums in all n-year periods are not less than the corresponding net premiums based upon the 1980 CSO valuation table with or without the 10-year select mortality factors.

Ins 2.80(5)(L)3. 3. There is no cash surrender value in any policy year.

Ins 2.80 Note Note: Without this exemption, companies issuing certain n-year renewable term policies could be forced to hold reserves higher than n-year term reserves, even though in many cases gross premiums are well above valuation mortality rates.

Ins 2.80(5)(m) (m) Unitary basic reserves and unitary deficiency reserves need not be calculated for a juvenile policy if, based upon the initial current premium scale at issue, all of the following conditions are met:

Ins 2.80(5)(m)1. 1. At issue, the insured is age 24 or younger.

Ins 2.80(5)(m)2. 2. Until the insured reaches the end of the juvenile period, which shall occur at or before age 25, the gross premiums and death benefits are level, and there are no cash surrender values.

Ins 2.80(5)(m)3. 3. After the end of the juvenile period, gross premiums are level for the remainder of the premium-paying period, and death benefits are level for the remainder of the life of the policy.

Ins 2.80 Note Note: The jumping juvenile policy described has traditionally been valued in two segments. This exemption will allow that practice to continue without requiring the calculation of reserves on a unitary basis. However, within each segment, both basic and deficiency reserves shall comply with the segmented reserve requirements.

Ins 2.80(6) (6) Calculation of minimum valuation standard for flexible premium and fixed premium universal life insurance policies that contain provisions resulting in the ability of a policyowner to keep a policy in force over a secondary guarantee period.

Ins 2.80(6)(a) (a) Policies with a secondary guarantee include any of the following:

Ins 2.80(6)(a)1. 1. A policy with a guarantee that the policy will remain in force at the original schedule of benefits subject only to the payment of specified premiums.

Ins 2.80(6)(a)2. 2. A policy in which the minimum premium at any duration is less than the corresponding one-year valuation premium, calculated using the maximum valuation interest rate and the 1980 CSO valuation table with or without 10-year select mortality factors.

Ins 2.80(6)(a)3. 3. A policy with any combination of the features described in subds. 1. and 2.

Ins 2.80(6)(b) (b) A secondary guarantee period is the period for which the policy is guaranteed to remain in force subject only to a secondary guarantee. When a policy contains more than one secondary guarantee, the minimum reserve shall be the greatest of the respective minimum reserves at that valuation date of each unexpired secondary guarantee, ignoring all other secondary guarantees. Secondary guarantees that are unilaterally changed by the insurer after issue shall be considered to have been made at issue. Reserves described in pars. (g) and (h) shall be recalculated from issue to reflect these changes.