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Chapter 04. Valuation Standards for Individual Annuity and Pure Endowment Contracts

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Regulation .01 Purpose.Copy Citation

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The purpose of this chapter is to approve the use of the following mortality tables adopted by the National Association of Insurance Commissioners after 1980 as a basis for determining the minimum standards of valuation for individual annuity and pure endowment contracts:
A.
The 1983 Table “a”;
B.
The Annuity 2000 Mortality Table; and
C.
The 2012 Individual Annuity Reserving Table.

Regulation .02 Definitions.Copy Citation

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A.
In this chapter, the following terms have the meanings indicated.
B.
Terms Defined.
(1)
“Annuity 2000 Mortality Table” means the mortality table:
(a)
Developed by the Society of Actuaries Committee on Life Insurance Research; and
(b)
Set out in Regulation .04 of this chapter.
(2)
“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.
(3)
“Period table” means a table of mortality rates applicable to a given calendar year.
(4)
“Projection Scale G2” means a table:
(a)
Containing annual rates, G2x, of mortality improvement by age for projecting future mortality rates beyond calendar year 2012;
(b)
Developed by the Society of Actuaries Committee on Life Insurance Research; and
(c)
Set out in Regulation .07 of this chapter.
(5)
"1983 Table “a” means the mortality table:
(a)
Developed by the Society of Actuaries Committee to Recommend a New Mortality Basis for Individual Annuity Valuation;
(b)
Adopted as a recognized mortality table for annuities in June 1982 by the National Association of Insurance Commissioners; and
(c)
Set out in Regulation .03 of this chapter.
(6)
“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:
(a)
Contains rates, qx2012, developed by the Society of Actuaries Committee on Life Insurance Research; and
(b)
Is set out in Regulation .06 of this chapter.
(7)
“2012 Individual Annuity Reserving Table” or “2012 IAR Table” means the generational mortality table:
(a)
Developed by the Society of Actuaries Committee on Life Insurance Research; and
(b)
Containing rates, qx2012+n, that are derived from a combination of the 2012 IAM Period Table and Projection Scale G2 using the methodology set out in Regulation .08 of this chapter.

Regulation .03 Table “a”.Copy Citation

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The 1983 Table “a”, as shown below, is the mortality table designated by that name and adopted in June, 1982, by the National Association of Insurance Commissioners.
1983 TABLE “a”—1,000qx
Age Males Females
5 0.377 0.194
6 0.350 0.160
7 0.333 0.134
8 0.352 0.134
9 0.368 0.136
10 0.382 0.141
11 0.394 0.147
12 0.405 0.155
13 0.415 0.165
14 0.425 0.175
15 0.435 0.183
16 0.446 0.201
17 0.458 0.214
18 0.472 0.229
19 0.488 0.244
20 0.505 0.260
21 0.525 0.276
22 0.546 0.293
23 0.570 0.311
24 0.596 0.330
25 0.622 0.349
26 0.650 0.368
27 0.677 0.387
28 0.704 0.405
29 0.731 0.423
30 0.759 0.441
31 0.786 0.460
32 0.814 0.479
33 0.843 0.499
34 0.876 0.521
35 0.917 0.545
36 0.968 0.574
37 1.032 0.607
38 1.114 0.646
39 1.216 0.691
40 1.341 0.742
41 1.492 0.801
42 1.673 0.867
43 1.886 0.942
44 2.129 1.026
45 2.399 1.122
46 2.693 1.231
47 3.009 1.356
48 3.343 1.499
49 3.694 1.657
50 4.057 1.830
51 4.431 2.016
52 4.812 2.215
53 5.198 2.426
54 5.591 2.650
55 5.994 2.891
56 6.409 3.151
57 6.839 3.432
58 7.290 3.739
59 7.782 4.081
60 8.338 4.467
61 8.983 4.908
62 9.740 5.413
63 10.630 5.990
64 11.664 6.633
65 12.851 7.336
66 14.199 8.090
67 15.717 8.888
68 17.414 9.731
68 19.296 10.653
70 21.371 11.697
71 23.647 12.905
72 26.131 14.319
73 28.835 15.980
74 31.794 17.909
75 35.046 20.127
76 38.631 22.654
77 42.587 25.509
78 46.951 28.717
79 51.755 32.328
80 57.026 36.395
81 62.791 40.975
82 69.081 46.121
83 75.908 51.889
84 83.230 58.336
85 90.987 65.518
86 99.122 73.493
87 107.577 82.318
88 116.316 92.017
89 125.394 102.491
90 134.887 113.605
91 144.873 125.227
92 155.429 137.222
93 166.629 149.462
94 178.537 161.834
95 191.214 174.228
96 204.721 186.535
97 219.120 198.646
98 234.735 211.102
99 251.889 224.445
100 270.906 239.215
101 292.111 255.953
102 315.826 275.201
103 342.377 297.500
104 372.086 323.390
105 405.278 353.414
106 442.277 388.111
107 483.406 428.023
108 528.989 473.692
109 579.351 525.658
110 634.814 584.462
111 695.704 650.646
112 762.343 724.750
113 835.056 807.316
114 914.167 898.885
115 1000.000 1000.000

Regulation .04 Annuity 2000 Mortality Table.Copy Citation

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1000q
Age Nearest Birthday (x) Male Female*
5 0.291 0.171
6 0.270 0.141
7 0.257 0.118
8 0.294 0.118
9 0.325 0.121
10 0.350 0.126
11 0.371 0.133
12 0.388 0.142
13 0.402 0.152
14 0.414 0.164
15 0.425 0.177
16 0.437 0.190
17 0.449 0.204
18 0.463 0.219
19 0.480 0.234
20 0.499 0.250
21 0.519 0.265
22 0.542 0.281
23 0.566 0.298
24 0.592 0.314
25 0.616 0.331
26 0.639 0.347
27 0.659 0.362
28 0.675 0.376
29 0.687 0.389
30 0.694 0.402
31 0.699 0.414
32 0.700 0.425
33 0.701 0.436
34 0.702 0.449
35 0.704 0.463
36 0.719 0.481
37 0.749 0.504
38 0.796 0.532
39 0.864 0.567
40 0.953 0.609
41 1.065 0.658
42 1.201 0.715
43 1.362 0.781
44 1.547 0.855
45 1.752 0.939
46 1.974 1.035
47 2.211 1.141
48 2.460 1.261
49 2.721 1.393
50 2.994 1.538
51 3.279 1.695
52 3.576 1.864
53 3.884 2.047
54 4.203 2.244
55 4.534 2.457
56 4.876 2.689
57 5.228 2.942
58 5.593 3.218
59 5.988 3.523
60 6.428 3.863
61 6.933 4.242
62 7.520 4.668
63 8.207 5.144
64 9.008 5.671
65 9.940 6.250
66 11.016 6.878
67 12.251 7.555
68 13.657 8.287
69 15.233 9.102
70 16.979 10.034
71 18.891 11.117
72 20.967 12.386
73 23.209 13.871
74 25.644 15.592
75 28.304 17.564
76 31.220 19.805
77 34.425 22.328
78 37.948 25.158
79 41.812 28.341
80 46.037 31.933
81 50.643 35.985
82 55.651 40.552
83 61.080 45.690
84 66.948 51.456
85 73.275 57.913
86 80.076 65.119
87 87.370 73.136
88 95.169 81.991
89 103.455 91.577
90 112.208 101.758
91 121.402 112.395
92 131.017 123.349
93 141.030 134.486
94 151.422 145.689
95 162.179 156.846
96 173.279 167.841
97 184.706 178.563
98 196.946 189.604
99 210.484 201.557
100 225.806 215.013
101 243.398 230.565
102 263.745 248.805
103 287.334 270.326
104 314.649 295.719
105 346.177 325.576
106 382.403 360.491
107 423.813 401.054
108 470.893 447.860
109 524.128 501.498
110 584.004 562.563
111 651.007 631.645
112 725.622 709.338
113 808.336 796.233
114 899.633 892.923
115 1000.000 1000.000
*Based on 50% of Female Improvement Scale G.

Regulation .05 Valuation Standards.Copy Citation

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A.
In valuing the reserve liabilities under individual annuity and pure endowment contracts in accordance with the provisions of Insurance Article, §5-305(c) and (d), Annotated Code of Maryland, insurers may use either the 1971 Individual Annuity Mortality Table or the 1983 Table “a” for contracts issued on or after July 1, 1980, and before January 1, 1987.
B.
Except as provided in §§C, D, and E of this regulation, the 1983 Table “a”, as shown in Regulation .03 of this chapter, is to be used by insurers in valuing reserve liabilities under individual annuity and pure endowment contracts in accordance with the provisions of Insurance Article, §5-305(c) and (d), Annotated Code of Maryland, for contracts issued on and after January 1, 1987.
C.
Except as provided in §§D and E of this regulation, 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 July 1, 2004.
D.
Except as provided in §§E and F of this regulation, 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 July 1, 2005 and before January 1, 2015.
E.
Except as provided in §F of this regulation, the 2012 IAR 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.
F.
The 1983 Table “a” without projection shall be used for determining the minimum standards of valuation for an individual annuity or pure endowment contract issued on or after July 1, 2005, 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 if a temporary or life annuity has been used instead of continuing disability payments.

Regulation .06 2012 IAM Period Table.Copy Citation

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The 2012 Individual Annuity Mortality Period Life Table, as shown below, is the mortality table designated by that name and developed by the Society of Actuaries Committee on Life Insurance Research.
1000 qx2012
Age Nearest Birthday Male Female
0 1.605 1.621
1 0.401 0.405
2 0.275 0.259
3 0.229 0.179
4 0.174 0.137
5 0.168 0.125
6 0.165 0.117
7 0.159 0.110
8 0.143 0.095
9 0.129 0.088
10 0.113 0.085
11 0.111 0.086
12 0.132 0.094
13 0.169 0.108
14 0.213 0.131
15 0.254 0.156
16 0.293 0.179
17 0.328 0.198
18 0.359 0.211
19 0.387 0.221
20 0.414 0.228
21 0.443 0.234
22 0.473 0.240
23 0.513 0.245
24 0.554 0.247
25 0.602 0.250
26 0.655 0.256
27 0.688 0.261
28 0.710 0.270
29 0.727 0.281
30 0.741 0.300
31 0.751 0.321
32 0.754 0.338
33 0.756 0.351
34 0.756 0.365
35 0.756 0.381
36 0.756 0.402
37 0.756 0.429
38 0.756 0.463
39 0.800 0.504
40 0.859 0.552
41 0.926 0.600
42 0.999 0.650
43 1.069 0.697
44 1.142 0.740
45 1.219 0.780
46 1.318 0.825
47 1.454 0.885
48 1.627 0.964
49 1.829 1.051
50 2.057 1.161
51 2.302 1.308
52 2.545 1.460
53 2.779 1.613
54 3.011 1.774
55 3.254 1.950
56 3.529 2.154
57 3.845 2.399
58 4.213 2.700
59 4.631 3.054
60 5.096 3.460
61 5.614 3.916
62 6.169 4.409
63 6.759 4.933
64 7.398 5.507
65 8.106 6.146
66 8.548 6.551
67 9.076 7.039
68 9.708 7.628
69 10.463 8.311
70 11.357 9.074
71 12.418 9.910
72 13.675 10.827
73 15.150 11.839
74 16.860 12.974
75 18.815 14.282
76 21.031 15.799
77 23.540 17.550
78 26.375 19.582
79 29.572 21.970
80 33.234 24.821
81 37.533 28.351
82 42.261 32.509
83 47.441 37.329
84 53.233 42.830
85 59.855 48.997
86 67.514 55.774
87 76.340 63.140
88 86.388 71.066
89 97.634 79.502
90 109.993 88.377
91 123.119 97.491
92 137.168 107.269
93 152.171 118.201
94 168.194 130.969
95 185.260 146.449
96 197.322 163.908
97 214.751 179.695
98 232.507 196.151
99 250.397 213.150
100 268.607 230.722
101 290.016 251.505
102 311.849 273.007
103 333.962 295.086
104 356.207 317.591
105 380.000 340.362
106 400.000 362.371
107 400.000 384.113
108 400.000 400.000
109 400.000 400.000
110 400.000 400.000
111 400.000 400.000
112 400.000 400.000
113 400.000 400.000
114 400.000 400.000
115 400.000 400.000
116 400.000 400.000
117 400.000 400.000
118 400.000 400.000
119 400.000 400.000
120 1000.000 1000.000

Regulation .07 Projection Scale G2.Copy Citation

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Projection Scale G2, as shown below, is a table containing annual rates, G2x , of mortality improvement by age for projecting future mortality rates beyond calendar year 2012 and was developed by the Society of Actuaries Committee on Life Insurance Research.
G2x
Age Nearest Birthday Male Female
0 0.010 0.010
1 0.010 0.010
2 0.010 0.010
3 0.010 0.010
4 0.010 0.010
5 0.010 0.010
6 0.010 0.010
7 0.010 0.010
8 0.010 0.010
9 0.010 0.010
10 0.010 0.010
11 0.010 0.010
12 0.010 0.010
13 0.010 0.010
14 0.010 0.010
15 0.010 0.010
16 0.010 0.010
17 0.010 0.010
18 0.010 0.010
19 0.010 0.010
20 0.010 0.010
21 0.010 0.010
22 0.010 0.010
23 0.010 0.010
24 0.010 0.010
25 0.010 0.010
26 0.010 0.010
27 0.010 0.010
28 0.010 0.010
29 0.010 0.010
30 0.010 0.010
31 0.010 0.010
32 0.010 0.010
33 0.010 0.010
34 0.010 0.010
35 0.010 0.010
36 0.010 0.010
37 0.010 0.010
38 0.010 0.010
39 0.010 0.010
40 0.010 0.010
41 0.010 0.010
42 0.010 0.010
43 0.010 0.010
44 0.010 0.010
45 0.010 0.010
46 0.010 0.010
47 0.010 0.010
48 0.010 0.010
49 0.010 0.010
50 0.010 0.010
51 0.011 0.010
52 0.011 0.011
53 0.012 0.011
54 0.012 0.011
55 0.013 0.012
56 0.013 0.012
57 0.014 0.012
58 0.014 0.012
59 0.015 0.013
60 0.015 0.013
61 0.015 0.013
62 0.015 0.013
63 0.015 0.013
64 0.015 0.013
65 0.015 0.013
66 0.015 0.013
67 0.015 0.013
68 0.015 0.013
69 0.015 0.013
70 0.015 0.013
71 0.015 0.013
72 0.015 0.013
73 0.015 0.013
74 0.015 0.013
75 0.015 0.013
76 0.015 0.013
77 0.015 0.013
78 0.015 0.013
79 0.015 0.013
80 0.015 0.013
81 0.014 0.012
82 0.013 0.012
83 0.013 0.011
84 0.012 0.010
85 0.011 0.010
86 0.010 0.009
87 0.009 0.008
88 0.009 0.007
89 0.008 0.007
90 0.007 0.006
91 0.007 0.006
92 0.006 0.005
93 0.005 0.005
94 0.005 0.004
95 0.004 0.004
96 0.004 0.004
97 0.003 0.003
98 0.003 0.003
99 0.002 0.002
100 0.002 0.002
101 0.002 0.002
102 0.001 0.001
103 0.001 0.001
104 0.000 0.000
105 0.000 0.000
106 0.000 0.000
107 0.000 0.000
108 0.000 0.000
109 0.000 0.000
110 0.000 0.000
111 0.000 0.000
112 0.000 0.000
113 0.000 0.000
114 0.000 0.000
115 0.000 0.000
116 0.000 0.000
117 0.000 0.000
118 0.000 0.000
119 0.000 0.000
120 0.000 0.000

Regulation .08 Application of the 2012 IAR Table.Copy Citation

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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 qx2012+n, as calculated in §A of this regulation, shall be rounded to three decimal places per 1,000.
C.
The rounding described in §B of this regulation shall occur according to the formula in §A of this regulation, starting at the 2012 period table rate.
Chapter annotations
Authority: Insurance Article, §2-109 and Title 5, Subtitle 3, Annotated Code of Maryland
History: Effective date: December 31, 1985 (12:26 Md. R. 2545)
History: Chapter recodified from COMAR 09.30.68 to COMAR 31.05.04 effective September 7, 1998 (25:18 Md. R. 1439)
History: Chapter revised effective May 24, 2004 (31:10 Md. R. 796)
History: Regulation .01 amended effective November 10, 2014 (41:22 Md. R. 1320)
History: Regulation .02B amended effective January 1, 2015 (41:22 Md. R. 1320)
History: Regulation .05 amended effective January 1, 2015 (41:22 Md. R. 1320)
History: Regulation .06 adopted effective January 1, 2015 (41:22 Md. R. 1320)
History: Regulation .07 adopted effective January 1, 2015 (41:22 Md. R. 1320)
History: Regulation .08 adopted effective January 1, 2015 (41:22 Md. R. 1320)