2015 Wyoming Code
TITLE 26 - INSURANCE CODE
CHAPTER 16 - LIFE INSURANCE AND ANNUITY CONTRACTS
ARTICLE 2 - STANDARD NONFORFEITURE LAW
SECTION 26-16-209. - Section applicability; premium adjustment for any policy; annual calculation; exception.

26-16-209. Section applicability; premium adjustment for any policy; annual calculation; exception.

(a) This section applies to policies issued on or after the operative date in subsection (n) of this section.

(b) Except as provided in subsection (h) of this section, the adjusted premiums for any policy shall be calculated on an annual basis and shall be the uniform percentage of the premiums specified in the policy for each policy year, excluding:

(i) Amounts payable as extra premiums to cover impairments or special hazards; and

(ii) Any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of:

(A) The then present value of the future guaranteed benefits provided by the policy;

(B) One percent (1%) of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years; and

(C) One hundred twenty-five percent (125%) of the nonforfeiture net level premium as otherwise defined in this section. In applying this percentage, no nonforfeiture net level premium is deemed to exceed four percent (4%) of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years.

(D) Repealed By Laws 2011, Ch. 176, 2.

(c) The nonforfeiture net level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided by the policy divided by the present value, at the date of issue of the policy, of an annuity of one (1) per annum payable on the date of issue of the policy and on each policy anniversary on which a premium falls due.

(d) For policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of policy issue. At the time of any such change in the benefits or premiums the future adjusted premiums, nonforfeiture net level premiums and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change.

(e) Except as provided in subsection (h) of this section the recalculated future adjusted premiums for any such policy shall be the uniform percentage of the future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all the future adjusted premiums shall be equal to the excess of: The sum of the then present value of the then future guaranteed benefits provided for by the policy and the additional expense allowance, if any, over the then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy.

(f) The additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of:

(i) One percent (1%) of the excess, if positive, of the average amount of insurance at the beginning of each of the first ten (10) policy years after the change over the average amount of insurance prior to the change at the beginning of each of the first ten (10) policy years after the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and

(ii) One hundred twenty-five percent (125%) of the increase, if positive, in the nonforfeiture net level premium.

(g) The recalculated nonforfeiture net level premium shall be equal to the result obtained by dividing (i) by (ii) where:

(i) Equals the sum of:

(A) The nonforfeiture net level premium applicable prior to the change times the present value of an annuity of one (1) per annum payable on each anniversary of the policy on or after the date of the change on which a premium would have fallen due had the change not occurred; and

(B) The present value of the increase in future guaranteed benefits provided for by the policy; and

(ii) Equals the present value of an annuity of one (1) per annum payable on each policy anniversary on or after the date of change on which a premium falls due.

(h) Notwithstanding any provision of this section, for a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, the policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, adjusted premiums and present values may be calculated as if the policy were issued to provide the higher uniform amounts of insurance on the standard basis.

(j) All adjusted premiums and present values referred to in this article shall be calculated for all policies of ordinary insurance on the basis of the commissioners' 1980 standard ordinary mortality table or, at the election of the company for any one (1) or more specified life insurance plans, the commissioners' 1980 standard ordinary mortality table with ten-year select mortality factors; for all industrial insurance policies on the basis of the commissioners' 1961 standard industrial mortality table; and for all policies issued in a particular calendar year on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this section for policies issued in that calendar year, except that:

(i) At the insurer's option, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this subsection, for policies issued in the immediately preceding calendar year;

(ii) Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by W.S. 26-16-202(a), shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of the paid-up nonforfeiture benefit and paid-up dividend additions, if any;

(iii) A company may calculate the amount of any guaranteed paid-up nonforfeiture benefit including any paid-up additions under the policy on the basis of an interest rate not lower than that specified in the policy for calculating cash surrender values;

(iv) 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 shall not be more than those shown in the commissioners' 1980 extended term insurance table for policies of ordinary insurance and not more than the commissioners' 1961 industrial extended term insurance table for policies of industrial insurance;

(v) For insurance issued on a substandard basis, the calculation of the adjusted premiums and present values may be based on appropriate modifications of the tables specified in this subsection;

(vi) Any ordinary mortality tables the National Association of Insurance Commissioners adopts after 1980, that are approved by regulation the commissioner promulgates, for use in determining the minimum nonforfeiture standard, may be substituted for the commissioners' 1980 standard ordinary mortality table with or without ten-year select mortality factors or for the commissioners' 1980 extended term insurance table;

(vii) Any industrial mortality tables the National Association of Insurance Commissioners adopts after 1980, that are approved by regulation the commissioner promulgates, for use in determining the minimum nonforfeiture standard, may be substituted for the commissioners' 1961 standard industrial mortality table or the commissioners' 1961 industrial extended term insurance table.

(k) The nonforfeiture interest rate per annum for any policy issued in a particular calendar year is equal to one hundred twenty-five percent (125%) of the calendar year statutory valuation interest rate for such policy as defined in the standard valuation law rounded to the nearer one-fourth percent (1/4%).

(m) Notwithstanding any other provision in this code to the contrary, any refiling or nonforfeiture values or their methods of computation for any previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provisions of that policy form.

(n) After the effective date of this section, any insurer may file with the commissioner a written notice of its election to comply with this section after a specified date before January 1, 1989, and the date specified is the operative date of this section for the insurer, except that if an insurer does not make the election, the operative date of this section for the insurer is January 1, 1989. Before that date the election may be made on a product-by-product basis.