{"data":{"id":"us-mi/mich.-comp.-laws-500.721","jurisdiction":"us-mi","citation":"Mich. Comp. Laws § 500.721","heading":"Application of alternative method or basis to contract reserve; assumptions; methods to determine sound value of liabilities.","body":"Sec. 721.\n\nIf the contract reserve on all health insurance policies and certificates to which an alternative method or basis is applied is not less in the aggregate than the amount determined according to the applicable standards specified in this chapter, an insurer may use any reasonable assumptions as to interest rates, termination, and mortality rates, and rates of morbidity or other contingency.\n\nSubject to subsection (1), the insurer may employ other methods in determining a sound value of its liabilities under health insurance policies and certificates, including, but not limited to, the following:\n\nThe net level premium method.\n\nThe 1-year full preliminary term method.\n\nProspective valuation on the basis of actual gross premiums with reasonable allowance for future expenses.\n\nThe use of approximations such as those involving age groupings, groupings of several years of issue, average amounts of indemnity, and grouping of similar contract forms.\n\nThe computation of the reserve for 1 contract benefit as a percentage of, or by other relation to, the aggregate contract reserves exclusive of the benefit or benefits so valued.\n\nThe use of a composite annual claim cost for all or any combination of the benefits included in the policies or certificates valued.","path":["MI Code","Chapter 500","Act Act-218-of-1956"],"source_url":"https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-500-721","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:31Z","sha256":"76c49c84198fdc048ceac392472c4798ebd12c7b905969e51fb0175b1b76378b","source_id":"us-mi","stale":false,"prev":"us-mi/mich.-comp.-laws-500.7206","next":"us-mi/mich.-comp.-laws-500.7210"},"notice":"GroundRules: Original legal text. Not legal advice."}