The proposed rule changes are:
SECTION 1.
Ins 2.13 (6) (d) 2. is amended to read:2. To the extent that the level of benefits may be affected by mortality results, the insurer shall determine the mortality factor from the 1983 Table A1983 Table ‘a’, as defined in s. Ins 2.30 (2) (a)2.30 (2) (b), or any modification of that table not having a higher mortality rate at any age. SECTION 2.
Ins 2.30 (2) is repealed and recreated to read:Ins 2.30 (2) (a) “1983 GAM table” means those male and female group annuity mortality tables adopted for the valuation of group annuity and pure endowment contracts in December of 1983 by the NAIC and published on pages 414-415, NAIC proceedings, vol. I, 1984.
(b) "1983 table ‘a’" means that mortality table adopted for the valuation of individual annuity and pure endowment contracts in June of 1982 by the NAIC and published on page 454, NAIC proceedings, vol. II 1982.
(c) "1994 GAR table" means the group annuity reserving table adopted for the valuation of group annuity and pure endowment contracts in December of 1996 by the NAIC as published on pages 866 and 867, vol. XLVII, transactions, society of actuaries, 1995.
(d) “2012 Individual Annuity Mortality Period Life Table” or “2012 IAM Period Table” means 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, and published in the 2012 proceedings of the NAIC, Fall Volume I, pages 149-150.
(e) “2012 IAR Table” means 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 Section 3m.
(f) "Annuity 2000 mortality table" means those male and female mortality tables adopted for the valuation of individual annuity and pure endowment contracts in December of 1996 by the NAIC as published on page 240, vol. XLVII, transactions, society of actuaries, 1995.
(g) “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.
(h) “NAIC" means the national association of insurance commissioners.
(i) “Period table” means a table of mortality rates applicable to a given calendar year.
(j) “Projection Scale G2” or “Scale G2” is 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, and published in the 2012 proceedings of the NAIC, Fall Volume I, pages 151-152.
SECTION 3.
Ins 2.30 (3) (c) is amended to read: Ins 2.30 (3) (c) Except as provided in par. (d) the annuity 2000 mortality table shall be used to determine the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 1999 but before January 1, 2015.
SECTION 4.
Ins 2.30 (3) (cm) is created to read:Ins 2.30 (3) (cm) Except as provided in par. (d) the 2012 IAR Table may be used to determine the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 2015. For any individual annuity or pure endowment contract issued on or after January 1, 2016, the 2012 IAR Table shall be used.
SECTION 5.
Ins 2.30 (3m) is created to read:Ins 2.30 (3m) APPLICATION OF THE 2012 IAR TABLE.
(a) In using the 2012 IAR Table, the mortality rate for a person age x in year (2012 + n) is calculated as follows:
(b) The resulting qx 2012+n shall be rounded to three decimal places per 1,000, e.g., 0.741 deaths per 1,000. The rounding shall occur according to the formula in par. (a), starting at the 2012 period table rate.
Note: For example, for a male age 30, qx 2012 = 0.741.
qx 2013 = 0.741 * (1 – 0.010) ^ 1 = 0.73359, which is rounded to 0.734.
qx 2014 = 0.741 * (1 – 0.010) ^ 2 = 0.7262541, which is rounded to 0.726.
Note: A method leading to incorrect rounding would be to calculate qx 2014 as qx 2013 * (1 – 0.010), or 0.734 * 0.99 = 0.727. It is incorrect to use the already rounded qx 2013 to calculate qx 2014.
SECTION 6.
INITIAL APPLICABILITY. This rule first applies to contracts issued on January 1, 2015 pursuant to emergency rule EmR1428.SECTION 7.
EFFECTIVE DATE. This rule shall take effect on the first day of the month after publication in the Wisconsin Administrative Register, as provided in s. 227.22 (2) (intro.), Stats.Office of the Commissioner of Insurance
Private Sector Fiscal Analysis
for Section Ins 2.30 relating to 2012 Individual Annuity Reserving Mortality Table and Affecting Small Business This rule change will have no significant effect on the private sector regulated by OCI.
