Noncancellable disability insurance reserve

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  • (a) The legal minimum standard for computing the active life reserve, including the unearned premium reserve of noncancellable disability policies shall be based on Conference Modification of Class III Disability Experience with interest at not to exceed 3 ½ percent per annum on the full preliminary term basis.

  • (b) For policies with a waiting period of less than three months or providing benefits at ages beyond the limits of Conference Modification of Class III Disability Experience, the table shall be extended to cover the provisions of such policies on such basis as the Commissioner may approve.

  • (c) The reserve for losses under noncancellable disability policies shall be based on Conference Modification of Class III Disability Experience, except that for claims of less than 27 months duration the reserve may be taken as equivalent to the prospective claim payments for three and one-half times the elapsed period of disability; but in no case shall the reserve be less than the equivalent of seven weeks claim payments.

  • (d) The Commissioner shall modify the application of the tables and requirements prescribed in this section to policies or to claims arising under policies in accordance with the waiting period contained in such policies and in accordance with any limitation as to the time for which indemnity is payable.


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