(a) Except as hereinafter provided, any authorized insurer who issues or has heretofore issued "burial insurance" in this state shall value the life insurance reserve liabilities for such policies (hereinafter "burial reserves") in accordance with the provisions of Section 27-36-7.
(b) An insurer shall increase the amount of insurance on which its burial reserves are based, not to exceed the retail value of such benefits as stated in the policies, when appropriate to reflect an increase in the costs to the insurer of providing the policy benefits. When an insurer shall increase the amount of insurance for this purpose, it shall be permitted to change the assumed interest rate and the valuation mortality table for computing such reserves, provided that the resulting reserves after such increase in amount of insurance and change in assumed interest rate or valuation mortality table, or both, shall not be less than the reserves before such changes, and provided further that the reserves shall not be less than those calculated using the minimum standards set forth below.
(c) The minimum standards for valuation of burial reserves under this chapter shall be:
(1) An assumed interest rate not exceeding six percent per annum;
(2) The commissioners 1961 standard industrial mortality table or any industrial mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by the commissioner for use in determining the minimum standard of valuation for such policies; and
(3) The commissioners reserve valuation method as defined by Section 27-36-7(e), as may be amended from time to time.
(d) Prior to the filing date of the annual statement for the year in which the insurer intends to change the assumed interest rate or the valuation mortality tables, or both, used in the valuation of burial reserves as permitted under this chapter, the insurer shall communicate in writing to the commissioner the valuation standards to be used in such calculation. The insurer shall as to each block of business specify the interest rate, mortality table, valuation method, and amount of insurance to be used in the reserve calculation. "Block of business" shall mean a logical and identifiable grouping of policies as specified by the insurer in its written notice to the commissioner.
(e) Nothing in this chapter shall be construed as authorizing or requiring an increase in the retail value of the policies or in the nonforfeiture values, including the cash surrender values of subject burial insurance policies.
(f) To the extent that other laws or parts of laws may be construed as being applicable to the calculation of burial reserves, the provisions of this chapter shall take precedence over and supersede said provisions to the extent necessary to effectuate the intent of this chapter.
Last modified: May 3, 2021