Administrative Code

Virginia Administrative Code
Title 14. Insurance
Agency 5. State Corporation Commission, Bureau of Insurance
8/11/2020

Chapter 50. Rules Governing New Annuity Mortality Tables for Use in Determining Reserve Liabilities for Annuities

14VAC5-50-10. Purpose.

The purpose of this chapter is to recognize the following mortality tables for use in determining the minimum standard of valuation for annuity and pure endowment contracts: the 1983 Group Annuity Mortality (1983 GAM) Table, the 1983 Table "a," the Annuity 2000 Mortality Table, the 2012 Individual Annuity Reserving (2012 IAR) Mortality Table, and the 1994 Group Annuity Reserving (1994 GAR) Table.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.

Historical Notes

Derived from Regulation No. 27, Case No. INS850208 § 2, eff. December 31, 1985; amended, Virginia Register Volume 14, Issue 3, eff. October 15, 1997; Volume 30, Issue 5, eff. January 1, 2015.

14VAC5-50-20. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"1983 Group Annuity Mortality Table" and "1983 GAM Table" mean that mortality table developed by the Society of Actuaries Committee on Annuities and adopted as a recognized mortality table for annuities in December 1983 by the National Association of Insurance Commissioners (NAIC).

"1983 Table 'a'" means that mortality table developed by the Society of Actuaries Committee to Recommend a New Mortality Basis for Individual Annuity Valuation and adopted as a recognized mortality table for annuities in June 1982 by the NAIC.

"1994 Group Annuity Reserving Table" and "1994 GAR Table" mean that mortality table developed by the Society of Actuaries Group Annuity Valuation Table Task Force and adopted as a recognized mortality table for annuities in December 1996 by the NAIC.

"2012 Individual Annuity Mortality Period Life Table" and "2012 IAM Period Table" mean the Period Table containing loaded mortality rates for calendar year 2012. This table contains rates, qx2012, developed by the Society of Actuaries Committee on Life Insurance Research.

"2012 Individual Annuity Reserving Mortality Table" and "2012 IAR Mortality Table" mean that Generational Mortality Table developed by the Society of Actuaries Committee on Life Insurance Research and containing rates, qx2012+n, derived from a combination of the 2012 IAM Period Table and Projection Scale G2, using the methodology stated in 14VAC5-50-35, and adopted as a recognized mortality table for annuities in December 2012 by the NAIC.

"Annuity 2000 Mortality Table" means that mortality table developed by the Society of Actuaries Committee on Life Insurance Research and adopted as a recognized mortality table for annuities in December 1996 by the NAIC.

"Generational Mortality Table" means a mortality table containing a set of mortality rates that decrease for a given age from one year to the next based on a combination of a Period Table and a projection scale containing rates of mortality improvement.

"Period Table" means a table of mortality rates applicable to a given calendar year (the Period).

"Projection Scale G2" and "Scale G2" mean a table of annual rates, G2x, of mortality improvement by age for projecting future mortality rates beyond calendar year 2012. This table was developed by the Society of Actuaries Committee on Life Insurance Research.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.

Historical Notes

Derived from Regulation No. 27, Case No. INS850208 § 3, eff. December 31, 1985; amended, Virginia Register Volume 14, Issue 3, eff. October 15, 1997; Volume 30, Issue 5, eff. January 1, 2015.

14VAC5-50-30. Individual annuity or pure endowment contracts.

A. Except as provided in subsections B and C of this section, the 1983 Table "a" is recognized and approved as an individual annuity mortality table for valuation and, at the option of the company, may be used for purposes of determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after July 1, 1979.

B. Except as provided in subsection C of this section, either the 1983 Table "a" or the Annuity 2000 Mortality Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 1987.

C. Except as provided in subsection D of this section, the Annuity 2000 Mortality Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 1999.

D. Except as provided in subsection E of this section, the 2012 IAR Mortality Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 2015.

E. The 1983 Table "a" without projection is to be used for determining the minimum standards of valuation for an individual annuity or pure endowment contract issued on or after January 1, 1999, solely when the contract is based on life contingencies and is issued to fund periodic benefits arising from:

1. Settlements of various forms of claims pertaining to court settlements or out of court settlements from tort actions;

2. Settlements involving similar actions such as workers' compensation claims; or

3. Settlements of long-term disability claims where a temporary or life annuity has been used in lieu of continuing disability payments.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.

Historical Notes

Derived from Regulation No. 27, amended by Case No. INS850208 § 4, eff. December 31, 1985; amended, Virginia Register Volume 14, Issue 3, eff. October 15, 1997; Volume 30, Issue 5, eff. January 1, 2015.

14VAC5-50-35. Application of the 2012 IAR Mortality Table.

In using the 2012 IAR Mortality Table, the mortality rate for a person age x in year (2012 + n) is calculated as follows:

qx2012+n = qx2012(1 – G2x)n

The resulting qx2012+n shall be rounded to three decimal places per 1,000 (e.g., 0.741 deaths per 1,000). Also, the rounding shall occur according to the formula above, starting at the 2012 Period Table rate.

For example, for a male age 30, qx2012 = 0.741.

qx2013 = 0.741 * (1 – 0.010) ^ 1 = 0.73359, which is rounded to 0.734.

qx2014 = 0.741 * (1 – 0.010) ^ 2 = 0.7262541, which is rounded to 0.726.

A method leading to incorrect rounding would be to calculate qx2014 as qx2013 * (1 – 0.010), or 0.734 * 0.99 = 0.727. It is incorrect to use the already rounded qx2013 to calculate qx2014.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 30, Issue 5, eff. January 1, 2015.

14VAC5-50-40. Group annuity or pure endowment contracts.

A. Except as provided in subsections B and C of this section, the 1983 GAM Table, 1983 Table "a," and the 1994 GAR Table are recognized and approved as group annuity mortality tables for valuation and, at the option of the company, any one of these tables may be used for purposes of valuation for any annuity or pure endowment purchased on or after July 1, 1979, under a group annuity or pure endowment contract.

B. Except as provided in subsection C of this section, either the 1983 GAM Table or the 1994 GAR Table shall be used for determining the minimum standard of valuation for any annuity or pure endowment purchased on or after January 1, 1987, under a group annuity or pure endowment contract.

C. The 1994 GAR Table shall be used for determining the minimum standard of valuation for any annuity or pure endowment purchased on or after January 1, 1999, under a group annuity or pure endowment contract.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.

Historical Notes

Derived from Regulation No. 27, amended by Case No. INS850208 § 5, eff. December 31, 1985; amended, Virginia Register Volume 14, Issue 3, eff. October 15, 1997; Volume 30, Issue 5, eff. January 1, 2015.

14VAC5-50-41. Application of the 1994 GAR Table.

In using the 1994 GAR Table, the mortality rate for a person age x in year (1994 + n) is calculated as follows:

qx1994+n = qx1994(1 – AAx)n

where the qx1994 and AAx are as specified in the 1994 GAR Table.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 14, Issue 3, eff. October 15, 1997; amended, Virginia Register Volume 30, Issue 5, eff. January 1, 2015.

14VAC5-50-50. Severability.

If any provision of this chapter or its application to any person or circumstance is for any reason held to be invalid by a court, the remainder of this chapter and the application of the provisions to other persons or circumstances shall not be affected.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.

Historical Notes

Derived from Regulation No. 27, amended by Case No. INS850208 § 6, eff. December 31, 1985; amended, Virginia Register Volume 30, Issue 5, eff. January 1, 2015.



Website addresses provided in the Virginia Administrative Code to documents incorporated by reference are for the reader's convenience only, may not necessarily be active or current, and should not be relied upon. To ensure the information incorporated by reference is accurate, the reader is encouraged to use the source document described in the regulation.

As a service to the public, the Virginia Administrative Code is provided online by the Virginia General Assembly. We are unable to answer legal questions or respond to requests for legal advice, including application of law to specific fact. To understand and protect your legal rights, you should consult an attorney.