1. Except as provided in subsections 4 and 6, the adjusted premiums for any policy must be calculated on an annual basis and be such a uniform percentage of the respective premiums specified in the policy for each policy year, excluding any extra premiums charged because of impairments or special hazards, that the present value, at the date of issue of the policy, of all such adjusted premiums is equal to the sum of:
(a) The then present value of the future guaranteed benefits provided for by the policy;
(b) Two percent of the amount of insurance, if the insurance is uniform in amount, or of the equivalent uniform amount, as defined in this section, if the amount of insurance varies with duration of the policy;
(c) Forty percent of the adjusted premium for the first policy year; and
(d) Twenty-five percent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less.
2. In applying the percentages specified in paragraphs (c) and (d) of subsection 1, no adjusted premium shall be deemed to exceed 4 percent of the amount of insurance or uniform amount equivalent thereto. The date of issue of a policy for the purpose of this section must be the date as of which the rated age of the insured is determined.
3. In the case of a policy providing an amount of insurance varying with duration of the policy, the equivalent uniform amount thereof for the purpose of this section shall be deemed to be the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the date of issue as the benefits under the policy, except that, in the case of a policy providing a varying amount of insurance issued on the life of a child under 10 years of age, the equivalent uniform amount may be computed as though the amount of insurance provided by the policy before the attainment of age 10 were the amount provided by the policy at age 10.
4. The adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provision must be equal to (A) the adjusted premiums for an otherwise similar policy issued at the same age without term insurance benefits, increased, during the period for which premiums for term insurance benefits are payable, by (B) the adjusted premiums for such term insurance, the foregoing items (A) and (B) being calculated separately and as specified in subsections 1 and 2, except that, for the purposes of paragraphs (b), (c) and (d) of subsection 1, the amount of insurance or equivalent uniform amount of insurance used in the calculation of the adjusted premiums referred to in (B) must be equal to the excess of the corresponding amount determined for the entire policy over the amount used in the calculation of the adjusted premiums in (A).
5. Except as provided in NRS 688A.330 and 688A.340, all adjusted premiums and present values referred to in NRS 688A.290 to 688A.360, inclusive, must for all policies of ordinary insurance be calculated on the basis of the Commissioners 1941 Standard Ordinary Mortality Table, but for any category of ordinary insurance on female risks, adjusted premiums and present values may be calculated according to an age not more than 3 years younger than the actual age of the insured, and such calculations for all policies of industrial insurance must be made on the basis of the 1941 Standard Industrial Mortality Table. All calculations must be made on the basis of the rate of interest, not exceeding 3.5 percent per annum, specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits, but in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than 130 percent of the rates of mortality according to the applicable table. The calculation of any adjusted premiums and present values for insurance issued on a substandard basis may be based on such other table of mortality as may be specified by the insurer and approved by the Commissioner.
6. This section does not apply to policies issued on or after the operative date of NRS 688A.325.
(Added to NRS by 1971, 1737; A 1983, 953)