KRS 304.6-140: Minimum standards.

(1) This subsection applies only to policies and contracts issued prior to January 1,

1948, or such earlier date after June 13, 1944, as shall have been elected by an

insurer as the date on and after which it would comply with the standard

nonforfeiture law. E xcept as otherwise provided in paragraph (b) of subsection (2)

of this section, the minimum standard for the valuation of all such policies and

contracts shall be that provided by the laws in effect immediately prior to such date,

except that the minimum s tandard for the valuation of annuities and pure

endowments purchased under group annuity and pure endowment contracts issued

prior to such effective date shall be that provided by the laws in effect immediately

prior to such date but replacing the interest rates specified in such laws by an

interest rate of five percent (5%) per annum. Reserves for all such policies and

contracts may be calculated, at the option of the insurer, according to any standards

which produce greater aggregate reserves for all such policies and contracts than the

minimum reserves required by this subsection.

(2) This subsection applies only to policies and contracts issued on and after January 1,

1948, or such earlier date after June 13, 1944, as shall have been elected by an

insurer as the date on and after which it would comply with the standard

nonforfeiture law, except as otherwise provided in paragraph (b) of this subsection

for group annuity and pure endowment contracts issued prior to such date.

(a) Except as otherwise provide d in paragraph (b) of this subsection and in KRS

304.6-145, the minimum standard for the valuation of all such policies and

contracts shall be the commissioners reserve valuation methods defined in

KRS 304.6-150, 304.6-155, and 304.6 -180, five and one -half percent (5.5%)

interest for single premium life insurance policies, five percent (5%) interest

for group annuity and pure endowment contracts, four percent (4%) interest

for all other such policies and contracts issued prior to June 17, 1978, four and

one-half percent (4 -1/2%) interest for such policies and contracts, other than

annuity and pure endowment contracts, issued on or after June 17, 1978, and

the following tables:

1. Standard ordinary mortality table. For all ordinary policies of life

insurance issued on the standard basis, excluding any disability and

accidental death benefits in such policies, -- the commissioners 1941

standard ordinary mortality table; provided, however, that the

commissioners 1958 standard ordinary mortality table shall be th e table

for such minimum standard for such policies issued on and after January

1, 1966, or such earlier date after June 16, 1960, as shall have been

elected by an insurer as the date on and after which it would use such

table as the basis for minimum cash surrender values and nonforfeiture

benefits under the standard nonforfeiture law and prior to the effective

date of KRS 304.15-342; provided that for any category of such policies

issued on female risks all modified net premiums and present values

referred to in KRS 304.6 -130 to 304.6-180, inclusive, may be calculated

according to an age not more than six (6) years younger than the actual

age of the insured; and for such policies issued on or after the effective

date of KRS 304.15 -342 the commissioners 198 0 standard ordinary

mortality table, or at the election of the company for any one (1) or more

specified plans of life insurance, the commissioners 1980 standard

ordinary mortality table with ten -year select mortality factors, or any

ordinary mortality table, adopted after 1980 by the National Association

of Insurance Commissioners, that is approved by regulation promulgated

by the commissioner for use in determining the minimum standard of

valuation for such policies;

2. Standard industrial mortality table . For all industrial life insurance

policies issued on the standard basis, excluding any disability and

accidental death benefits in such policies, -- the 1941 standard industrial

mortality table; provided, however, that the commissioners 1961

standard industrial mortality table shall be the table for such minimum

standard for such policies issued on and after January 1, 1968, or such

earlier date after June 14, 1962, as shall have been elected by the insurer

as the date on and after which it would use such table as the basis for

minimum cash surrender values and nonforfeiture benefits under the

standard nonforfeiture law or any industrial mortality table, adopted after

1980 by the National Association of Insurance Commissioners, that is

approved by regulati on promulgated by the commissioner for use in

determining the minimum standard of valuation for such policies;

3. Individual annuity mortality table or annuity mortality table. For

individual annuity and pure endowment contracts, excluding any

disability a nd accidental death benefits in such policies -- the 1937

standard annuity mortality table or, at the option of the insurer, the

annuity mortality table for 1949, ultimate, or any modification of either

of these tables approved by the commissioner;

4. Group annuity mortality table. For group annuity and pure endowment

contracts, excluding any disability and accidental death benefits in such

policies -- the group annuity mortality table for 1951, any modification

of such table approved by the commissioner, o r, at the option of the

insurer, any of the tables or modifications of tables specified for

individual annuity and pure endowment contracts;

5. Disability table. For total and permanent disability benefits in or

supplementary to ordinary policies or contra cts on active and disabled

lives -- for policies or contracts issued on or after January 1, 1966, the

tables of period 2 disablement rates and the 1930 to 1950 termination

rates of the 1952 disability study of the society of actuaries, with due

regard to t he type of benefit or any tables of disablement rates and

termination rates, adopted after 1980 by the National Association of

Insurance Commissioners, that are approved by regulation promulgated

by the commissioner for use in determining the minimum stand ard of

valuation for such policies; for policies or contracts issued on or after

January 1, 1961 and prior to January 1, 1966, either such tables or, at the

option of the insurer, the class (3) disability table (1926), and for

policies issued prior to Janu ary 1, 1961, the class (3) disability table

(1926). In addition, any such table shall, for active lives, be combined

with a mortality table permitted for calculating the reserves for life

insurance policies;

6. Accidental death mortality table. For acciden tal death benefits in or

supplementary to policies -- for policies issued on or after January 1,

1966, the 1959 accidental death benefits table or any accidental death

benefits table, adopted after 1980 by the National Association of

Insurance Commissioner s, that is approved by regulation promulgated

by the commissioner for use in determining the minimum standard of

valuation for such policies; for policies issued on or after January 1,

1961 and prior to January 1, 1966, either such table or, at the option of

the insurer, the inter -company double indemnity mortality table; and for

policies issued prior to January 1, 1961, the inter -company double

indemnity mortality table. Any such table shall be combined with a

mortality table permitted for calculating the reserves for life insurance

policies; and

7. Group life and other tables. For group life insurance, life insurance

issued on the substandard basis and other special benefits -- such tables

as may be approved by the commissioner.

(b) Except as provided in K RS 304.6 -145, the minimum standard for the

valuation of all individual annuity and pure endowment contracts issued prior

to January 1, 1979, excluding any disability and accidental death benefits in

such contracts, shall be the commissioners reserve valuat ion methods defined

in KRS 304.6 -150 and 304.6 -155, six percent (6%) interest for single

premium immediate annuity contracts and four percent (4%) interest for all

other contracts, and the 1971 individual annuity mortality table, or any

modification of this table approved by the commissioner.

1. The minimum standard for the valuation of all annuities and pure

endowments purchased prior to January 1, 1979, under group annuity

and pure endowment contracts, excluding any disability and accidental

death benefit s in such contracts, shall be the commissioners reserve

valuation methods defined in KRS 304.6-150 and 304.6-155, six percent

(6%) interest, and the 1971 group annuity mortality table, or any

modification of this table approved by the commissioner.

2. The minimum standard for the valuation of all individual annuity and

pure endowment contracts issued on or after January 1, 1979, excluding

any disability and accidental death benefits in such contracts, shall be

the commissioners reserve valuation methods defined in KRS 304.6-150

and 304.6 -155, seven and one -half percent (7 -1/2%) interest for single

premium immediate annuity contracts, five and one -half percent (5 -

1/2%) interest for single premium deferred annuity and pure endowment

contracts and four and one-half percent (4 -1/2%) interest for all other

individual annuity and pure endowment contracts, and the 1971

individual annuity mortality table, or any individual annuity mortality

table adopted after 1980 by the National Association of Insurance

Commissioners, that is approved by regulation promulgated by the

commissioner for use in determining the minimum standards of

valuation for such contracts, or any modification of these tables

approved by the commissioner.

3. The minimum standard for the valuation of all annuities and pure

endowments purchased on or after January 1, 1979 under group annuity

and pure endowment contracts, excluding any disability and accidental

death benefits in such contracts, shall be the commissioners reserve

valuation methods defined in KRS 304.6 -150 and 304.6-155, seven and

one-half percent (7-1/2%) interest, and the 1971 group annuity mortality

table, or any group annuity mortality table, adopted after 1980 by the

National Association of Insurance Commissioners, that is approved by

regulation promulgated by the commissioner for use in determining the

minimum standards of valuation for such contracts, or any modification

of these tables approved by the commissioner.

4. The minimum standard for the valuation of all individual annui ty and

pure endowment contracts issued on or after July 1, 1976, and prior to

January 1, 1979, and of all annuities and pure endowments purchased on

or after July 1, 1976, and prior to January 1, 1979, under group annuity

and pure endowment contracts, excl uding any disability and accidental

death benefits in such contracts, shall be the standard specified in this

paragraph, or, at the option of the insurer with respect to any such

contracts or purchases, the standard specified in paragraph (a) of this

subsection.