Best Life Assurance Company of California - Page 5




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                  contracts (either separately or combined with accident                               
                  and health insurance), or noncancellable contracts of                                
                  health and accident insurance, if–-                                                  
                              (1) its life insurance reserves * * *, plus                              
                              (2) unearned premiums, and unpaid losses                                 
                        (whether or not ascertained), on noncancellable                                
                        life, accident, or health policies not included in                             
                        life insurance reserves,                                                       
                  comprise more than 50 percent of its total reserves (as                              
                  defined in subsection (c)). * * *                                                    
                        *     *    *     *            *     *     *                                    
                        (c) Total Reserves Defined.–-For purposes of                                   
                  subsection (a), the term “total reserves” means–-                                    
                              (1) life insurance reserves,                                             
                              (2) unearned premiums, and unpaid losses                                 
                        (whether or not ascertained), not included in life                             
                        insurance reserves, and                                                        
                              (3) all other insurance reserves required by                             
                        law.                                                                           

                  The equation below summarizes the statutory elements of                              
            the section 816(a) life insurance company qualifying fraction:                             

       Numerator                      Denominator              Ratio                                   
       Life insurance reserves +           Life insurance reserves +            Percentage             
       Unpaid losses on noncancelable life,                           �        Unpaid losses +       =        of life         
       health, and accident claims               All other reserves       insurance reserves           

                  In their computations of total life insurance company                                
            reserves, the parties agree that the only dispute herein involves                          
            whether the term “unpaid losses” in the denominator of the life                            






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Last modified: May 25, 2011