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Texas Insurance Code - Section 425.070. Computation Of Reserve For Certain Policies By Calendar Year Of Issue

Legal Research Home > Texas Lawyer > Insurance Code > Texas Insurance Code - Section 425.070. Computation Of Reserve For Certain Policies By Calendar Year Of Issue

§ 425.070. COMPUTATION OF RESERVE FOR CERTAIN POLICIES BY 
CALENDAR YEAR OF ISSUE.  (a) The reserve for a policy or contract 
issued by a life insurance company before the date on which Chapter 
1105 would apply to the policy or contract, as determined under 
Section 1105.002(a) or (b), must be computed in accordance with the 
terms of the policy or contract and this section.
	(b)  For a policy issued before January 1, 1910, the 
computation must be based on the American Experience Table of 
Mortality and 4-1/2 percent annual interest.
	(c)  For a policy issued on or after January 1, 1910, and 
before January 1, 1948, the computation must be based on:
			(1)  the Actuaries or Combined Experience Table of 
Mortality and four percent annual interest, if the interest rate 
guaranteed in the policy is four percent annually or higher;  or
			(2)  the American Experience Table of Mortality 
and the lower rate specified in the policy, if the policy was issued 
on a reserve basis of an interest rate lower than four percent 
annually.
	(d)  For a policy issued on or after January 1, 1948, the 
computation must be based on the mortality table and interest rate 
specified in the policy, provided that:
			(1)  the specified interest rate may not exceed 
3-1/2 percent annually;    
			(2)  the specified table for a policy, other than 
an industrial life insurance policy, is the American Experience 
Table of Mortality, the American Men Ultimate Table of Mortality, 
the Commissioners 1941 Standard Ordinary Mortality Table, or, for a 
policy issued after December 31, 1959, the Commissioners 1958 
Standard Ordinary Mortality Table;  and
			(3)  the specified table for an industrial life 
insurance policy is the American Experience Table of Mortality, the 
Standard Industrial Mortality Table, the Sub-Standard Industrial 
Mortality Table, the 1941 Standard Industrial Mortality Table, or 
the 1941 Sub-Standard Industrial Mortality Table, or, for a policy 
issued after December 31, 1963, the Commissioners 1961 Standard 
Industrial Mortality Table.
	(e)  For a policy, other than an industrial life insurance 
policy, issued after December 31, 1959, to insure a female risk, the 
computation must be based on any mortality table and interest rate 
permitted under Subsection (d) and specified in the policy but may, 
at the insurance company's option, be based on an age not more than 
three years younger than the insured's actual age.
	(f)  Except as otherwise provided by Section 425.059 for 
coverage purchased under a group annuity or pure endowment contract 
to which that section applies, for a policy issued on a substandard 
risk, an annuity contract, or a contract or policy for disability 
benefits or accidental death benefits, the computation must be 
based on the standards and methods adopted by the insurance company 
and approved by the commissioner.
	(g)  For a group insurance policy issued before May 15, 1947, 
the computation must be based on the American Men Ultimate Table of 
Mortality with interest at the rate of three percent or 3-1/2 
percent annually as provided by the policy.  The reserve value of a 
group insurance policy issued on or after May 15, 1947, and before 
January 1, 1961, must be computed on the basis of either the 
American Men Ultimate Table of Mortality or the Commissioners 1941 
Standard Ordinary Mortality Table with interest at a rate not to 
exceed 3-1/2 percent annually as provided by the policy.  For a 
group insurance policy issued on or after January 1, 1961, the 
computation must be based on an interest rate not to exceed 3-1/2 
percent annually and the mortality table adopted by the insurance 
company with the commissioner's approval.

Added by Acts 2005, 79th Leg., ch. 727, § 1, eff. April 1, 2007.           

Last modified: August 11, 2007