KRS 304.6-131: Definitions for KRS 304.6-130 to 304.6-180.

As used in KRS 304.6 -130 to 304.6 -180, unless the context requires otherwise, the

following definitions shall apply on or after the operative date of the valuation manual, as

defined in subsection (11) of this section:

(1) "Accident and health insurance" means contracts that incorporate morbidity risk and

provide protection against economic loss resulting from accident, sickness, or

medical conditions and as may be specified in the valuation manual;

(2) "Appointed actuary" means a qualified actuary who is appointed in accordance with

the valuation manual to prepare the actuarial opinion required by KRS 304.6-171(6)

to (10);

(3) "Company" means an entity which has written, issued, or reissued life insurance,

accident and health insurance, or deposit-type contracts:

(a) In Kentucky and has at least one (1) policy in force or a claim; or

(b) In any state and is required to hold a certificate of authority to write life

insurance, accident and health insurance, or deposit -type contracts in this

state;

(4) "Deposit-type contract" means a contract that does not incorporate mortality or

morbidity risks and as may be specified in the valuation manual;

(5) "Life insurance" means contracts that incorporate mortality risk, including annuity

and pure endowment contracts, and as may be specified in the valuation manual;

(6) "NAIC" means the National Association of Insurance Commissioners;

(7) "Policyholder behavior" means any action a policyholder, contract holder, or any

other person with the right to elect options may take under a policy or contract

subject to KRS 304.6 -130 to 304.6-180, excluding events of mortality that result in

benefits prescribed in their essential aspects by the terms of the policy or contract,

including but not limited to:

(a) Lapse;

(b) Withdrawal;

(c) Transfer;

(d) Deposit;

(e) Premium payment;

(f) Loan;

(g) Annuitization; or

(h) Benefit elections;

(8) "Principle-based valuation" means a reserve valuatio n that uses one (1) or more

methods or one (1) or more assumptions determined by the company and is required

to comply with KRS 304.6-151 as specified in the valuation manual;

(9) "Qualified actuary" means an individual who is qualified to sign the applica ble

statement of actuarial opinion in accordance with the American Academy of

Actuaries qualification standards for actuaries signing the statements and who meets

the requirements specified in the valuation manual;

(10) "Tail risk" means a risk that occurs either where the frequency of low -probability

events is higher than expected under a normal probability distribution or when there

are observed events of very significant size or magnitude; and

(11) "Valuation manual" means the manual of valuation instruc tions adopted by the

NAIC and any subsequent amendments.