{"data":{"id":"us-ok/okla.-stat.-tit.-36-36-4029","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 36, § 36-4029","heading":"Operative date of valuation manual - Nonforfeiture","body":"provisions - Life insurance.\n\nA. Definitions. The term \"operative date of the valuation\n\nmanual\" means the January 1 of the first calendar year that the\n\nvaluation manual, as defined in the Section 1510 of this title, is\n\neffective.\n\nB. No policy of life insurance, except as set forth in\n\nsubsection M of this section, shall be delivered or issued for\n\ndelivery in this state unless it shall contain in substance the\n\nfollowing provisions, or corresponding provisions which are at least\n\nas favorable to the defaulting or surrendering policyholder as are\n\nthe minimum requirements hereinafter specified and are essentially\n\nin compliance with subsection L of this section:\n\n1. That in the event of default in any premium payment, after\n\npremiums have been paid for at least three (3) full years, the\n\ninsurer will grant, upon proper request not later than sixty (60)\n\ndays after the due date of the premium in default, a paid-up\n\nnonforfeiture benefit on a plan stipulated in the policy, effective\n\nas of such due date, of such amount as may be hereinafter specified.\n\nIn lieu of such stipulated paid-up nonforfeiture benefit, the\n\ninsurer may substitute, upon proper request not later than sixty\n\n(60) days after the due date of the premium in default, an\n\nactuarially equivalent alternative paid-up nonforfeiture benefit\n\nwhich provides a greater amount or longer period of death benefits\n\nor, if applicable, a greater amount or earlier payment of endowment\n\nbenefits.\n\n2. That upon surrender of the policy within sixty (60) days\n\nafter the due date of any premium payment in default after premiums\n\nhave been paid for at least three (3) full years in the case of\n\nordinary insurance, or five (5) full years in the case of industrial\n\ninsurance, the insurer will pay, in lieu of any paid-up\n\nnonforfeiture benefit, a cash surrender value of such amount as may\n\nbe hereinafter specified.\n\n3. That a specified paid-up nonforfeiture benefit shall become\n\neffective as specified in the policy unless the person entitled to\n\nmake such election elects another available option not later than\n\nsixty (60) days after the due date of the premium in default.\n\n4. That if the policy shall have become paid up by completion\n\nof all premium payments, or if it is continued under any paid-up\n\nnonforfeiture benefit which became effective on or after the third\n\npolicy anniversary in the case of ordinary insurance, or the fifth\n\npolicy anniversary in the case of industrial insurance, the insurer\n\nwill pay, upon surrender of the policy within thirty (30) days after\n\nany policy anniversary, a cash surrender value of such amount as may\n\nbe hereinafter specified.\n\n5. In the case of policies which cause, on a basis guaranteed\n\nin the policy, unscheduled changes in benefits or premiums, or which\n\nprovide an option for changes in benefits or premiums other than a\n\nchange to a new policy, a statement of the mortality table, interest\n\nrate and method used in calculating cash surrender values and the\n\npaid-up nonforfeiture benefits available under the policy. In the\n\ncase of all other policies, a statement of the mortality table and\n\ninterest rate used in calculating the cash surrender values and the\n\npaid-up nonforfeiture benefits available under the policy, together\n\nwith a table showing the cash surrender value, if any, and paid-up\n\nnonforfeiture benefit, if any, available under the policy on each\n\npolicy anniversary, either during the first twenty (20) policy years\n\nor during the term of the policy, whichever is shorter, such values\n\nand benefits to be calculated upon the assumption that there are no\n\ndividends or paid-up additions credited to the policy and that there\n\nis no indebtedness to the insurer on the policy.\n\n6. An explanation of the manner in which the cash surrender\n\nvalues and the paid-up nonforfeiture benefits are altered by the\n\nexistence of any paid-up additions credited to the policy or any\norter, such values\n\nand benefits to be calculated upon the assumption that there are no\n\ndividends or paid-up additions credited to the policy and that there\n\nis no indebtedness to the insurer on the policy.\n\n6. An explanation of the manner in which the cash surrender\n\nvalues and the paid-up nonforfeiture benefits are altered by the\n\nexistence of any paid-up additions credited to the policy or any\n\nindebtedness to the insurer on the policy; if a detailed statement\n\nof the method of computation of the values and benefits shown in the\n\npolicy is not stated therein, a statement that such method of\n\ncomputation has been filed with the insurance supervisory official\n\nof the state in which the policy is delivered; and a statement of\n\nthe method to be used in calculating the cash surrender value and\n\npaid-up nonforfeiture benefit available under the policy on any\n\npolicy anniversary beyond the last anniversary for which such values\n\nand benefits are consecutively shown in the policy.\n\nC. Any of the provisions or portions thereof set forth in\n\nparagraphs 1 through 6 of subsection B of this section which are not\n\napplicable by reason of the plan of insurance may, to the extent\n\ninapplicable, be omitted from the policy. The insurer shall reserve\n\nthe right to defer the payment of any cash surrender value for a\n\nperiod of six (6) months after demand therefor with surrender of the\n\npolicy.\n\nD. Cash surrender value: The policy must comply with the\n\nrequirements of one of the following paragraphs:\n\n1. Any cash surrender value available under the policy in the\n\nevent of default in the premium payment due on any policy\n\nanniversary, whether or not required by subsection B of this\n\nsection, shall be at least equal to the reserve on the policy at\n\ndate of default and on any paid-up additions thereto, less a sum of\n\nnot more than two and one-half percent (2 1/2%) of the amount\n\ninsured by the policy and of the paid-up additions thereto, if any,\n\nand less any existing indebtedness to the company on or secured by\n\nthe policy; the reserve on such policy to be computed in accordance\n\nwith the mortality table and the rate of interest specified in the\n\npolicy for the calculation of the cash value and by the net level\n\npremium method of valuation unless a modified net premium method of\n\nvaluation be specified in the policy. No cash surrender value shall\n\nbe required in policies of term insurance of twenty (20) years or\n\nless.\n\n2. Any cash surrender value available under the policy in the\n\nevent of default in the premium payment due on any policy\n\nanniversary, whether or not required by subsection B of this\n\nsection, shall be an amount not less than the excess, if any, of the\n\npresent value on such anniversary of the future guaranteed benefits\n\nwhich would have been provided for by the policy, including any\n\nexisting paid-up additions if there had been no default over the sum\n\nof (i) the then present value of the adjusted premiums as defined in\n\nsubsections G, H and I of this section, corresponding to premiums\n\nwhich would have fallen due on and after such anniversary, and (ii)\n\nthe amount of any indebtedness to the insurer on account of or\n\nsecured by the policy.\n\n3. Provided, however, that for any policy issued on or after\n\nthe operative date of paragraph 4 of subsection I of this section as\n\ndefined therein, which provides supplemental life insurance or\n\nannuity benefits at the option of the insured and for an\n\nidentifiable additional premium by rider or supplemental policy\n\nprovision, the cash surrender value referred to in paragraph 2 of\n\nthis subsection shall be an amount not less than the sum of the cash\n\nsurrender value as defined in such paragraph for an otherwise\n\nsimilar policy issued at the same age without such rider or\n\nsupplemental policy provision and the cash surrender value as\nder or supplemental policy\n\nprovision, the cash surrender value referred to in paragraph 2 of\n\nthis subsection shall be an amount not less than the sum of the cash\n\nsurrender value as defined in such paragraph for an otherwise\n\nsimilar policy issued at the same age without such rider or\n\nsupplemental policy provision and the cash surrender value as\n\ndefined in such paragraph for a policy which provides only the\n\nbenefits otherwise provided by such rider or supplemental policy\n\nprovision.\n\n4. Provided, further, that for any family policy issued on or\n\nafter the operative date of paragraph 4 of subsection I of this\n\nsection as defined therein, which defines a primary insured and\n\nprovides term insurance on the life of the spouse of the primary\n\ninsured expiring before the spouse's age seventy-one (71) years, the\n\ncash surrender value referred to in paragraph 2 of this subsection\n\nshall be an amount not less than the sum of the cash surrender value\n\nas defined in such paragraph for an otherwise similar policy issued\n\nat the same age without such term insurance on the life of the\n\nspouse and the cash surrender value as defined in such paragraph for\n\na policy which provides only the benefits otherwise provided by such\n\nterm insurance on the life of the spouse.\n\n5. Any cash surrender value available within thirty (30) days\n\nafter any policy anniversary under any policy paid up by completion\n\nof all premium payments, or any policy continued under any paid-up\n\nnonforfeiture benefits, whether or not required by subsection B,\n\nshall be an amount not less than the present value, on such\n\nanniversary, of the future guaranteed benefits provided for by the\n\npolicy including any existing paid-up additions, decreased by any\n\nindebtedness to the insurer on account of or secured by the policy.\n\nThe method described in paragraphs 2, 3, 4 and 5 of this subsection\n\nmay be referred to as the Standard Nonforfeiture Value Method.\n\nE. Notification to policyholder of cash surrender value:\n\nWithin three (3) months after default of any premium payment on any\n\nlife insurance policy which has a cash surrender value, the insurer\n\nshall notify the policyholder in writing of the cash surrender value\n\nand of the policyholder's options as to the application of the cash\n\nsurrender value as provided in the policy.\n\nF. Paid-up nonforfeiture benefits: Any paid-up nonforfeiture\n\nbenefit available under the policy in the event of default in the\n\npremium payment due on any policy anniversary shall be such that its\n\npresent value as of such anniversary shall be at least equal to the\n\ncash surrender value then provided for by the policy, or, if none is\n\nprovided for, that cash surrender value which would have been\n\nrequired by this section in the absence of the condition that\n\npremiums shall have been paid for at least a specified period.\n\nG. The adjusted premium: This subsection shall not apply to\n\npolicies issued on or after the operative date of paragraph 4 of\n\nsubsection I of this section as defined therein. Except as provided\n\nin paragraph 2 of subsection H of this section, the adjusted\n\npremiums for any policy shall be calculated on an annual basis and\n\nshall be such uniform percentage of the respective premiums\n\nspecified in the policy for each policy year, excluding extra\n\npremiums on a substandard policy, that the present value, at the\n\ndate of issue of the policy, of all such adjusted premiums shall be\n\nequal to the sum of:\nd\n\npremiums for any policy shall be calculated on an annual basis and\n\nshall be such uniform percentage of the respective premiums\n\nspecified in the policy for each policy year, excluding extra\n\npremiums on a substandard policy, that the present value, at the\n\ndate of issue of the policy, of all such adjusted premiums shall be\n\nequal to the sum of:\n\n(i) the then present value of the future guaranteed\n\nbenefits provided for by the policy;\n\n(ii) two percent (2%) of the amount of the insurance if the\n\ninsurance be uniform in amount, or of the equivalent\n\nuniform amount, as hereinafter defined, if the amount\n\nof insurance varies with the duration of the policy;\n\n(iii) forty percent (40%) of the adjusted premium for the\n\nfirst policy year; and\n\n(iv) twenty-five percent (25%) of either the adjusted\n\npremium for the first policy year or the adjusted\n\npremium for a whole life policy of the same uniform or\n\nequivalent uniform amount with uniform premiums for\n\nthe whole of life issued at the same age for the same\n\namount of insurance, whichever is less, provided,\n\nhowever, that in applying the percentages specified in\n\nclauses (iii) and (iv) above, no adjusted premiums\n\nshall be deemed to exceed four percent (4%) of the\n\namount of insurance or uniform amount equivalent\n\nthereto.\n\nThe date of issue of a policy for the purpose of this section\n\nshall be the date as of which the rated age of the insured is\n\ndetermined.\n\nH. 1. This subsection shall not apply to policies issued on or\n\nafter the operative date of paragraph 4 of subsection I of this\n\nsection as defined therein. In the case of a policy providing an\n\namount of insurance varying with the duration of the policy, the\n\nequivalent uniform amount thereof for the purpose of subsection G of\n\nthis section shall be deemed to be the uniform amount of insurance\n\nprovided by an otherwise similar policy, containing the same\n\nendowment benefit or benefits, if any, issued at the same age and\n\nfor the same term, the amount of which does not vary with duration\n\nand the benefits under which have the same present value at the date\n\nof issue as the benefits under the policy, provided, however, that\n\nin the case of a policy providing a varying amount of insurance\n\nissued on the life of a child under age ten (10) years, the\n\nequivalent uniform amount may be computed as though the amount of\n\ninsurance provided by the policy prior to the attainment of age ten\n\n(10) years were the amount provided by such policy at age ten (10)\n\nyears.\n\n2. The adjusted premiums for any policy providing term\n\ninsurance benefits by rider or supplemental policy provision shall\n\nbe equal to (a) the adjusted premiums for an otherwise similar\n\npolicy issued at the same age without such term insurance benefits,\n\nincreased, during the period for which premiums for such term\n\ninsurance benefits are payable, by (b) the adjusted premiums for\n\nsuch term insurance, the foregoing items (a) and (b) being\n\ncalculated separately and as specified in subsection G of this\n\nsection and paragraph 1 of this subsection except that, for the\n\npurposes of clauses (ii), (iii) and (iv) of subsection G of this\n\nsection, the amount of insurance or equivalent uniform amount of\n\ninsurance used in the calculation of the adjusted premiums referred\n\nto in (b) shall be equal to the excess of the corresponding amount\n\ndetermined for the entire policy over the amount used in the\n\ncalculation of the adjusted premiums in (a).\n\nI. 1. This paragraph shall not apply to policies issued on or\n\nafter the operative date of paragraph 4 of this subsection as\n\ndefined therein. For policies which comply with the requirements of\n\nparagraph 2 of subsection D of this section and except as otherwise\n\nprovided in paragraphs 2 and 3 of this subsection, all adjusted\n\npremiums and present values referred to in this section shall for\n(a).\n\nI. 1. This paragraph shall not apply to policies issued on or\n\nafter the operative date of paragraph 4 of this subsection as\n\ndefined therein. For policies which comply with the requirements of\n\nparagraph 2 of subsection D of this section and except as otherwise\n\nprovided in paragraphs 2 and 3 of this subsection, all adjusted\n\npremiums and present values referred to in this section shall for\n\npolicies of ordinary insurance be calculated on the basis of the\n\nCommissioners 1941 Standard Ordinary Mortality Table, provided that\n\nfor any category of ordinary insurance issued on female risks,\n\nadjusted premiums and present values may be calculated according to\n\nan age not more than three (3) years younger than the actual age of\n\nthe insured, and such calculations for all policies of industrial\n\ninsurance shall be made on the basis of the 1941 Standard Industrial\n\nMortality Table. All calculations shall be made on the basis of the\n\nrate of interest, not exceeding three and one-half percent (3 1/2%)\n\nper annum, specified in the policy for calculating cash surrender\n\nvalues and paid-up nonforfeiture benefits, provided, however, that\n\nin calculating the present value of any paid-up term insurance with\n\naccompanying pure endowment, if any, offered as a nonforfeiture\n\nbenefit, the rates of mortality assumed may be not more than one\n\nhundred thirty percent (130%) of the rates of mortality according to\n\nsuch applicable table, provided further that for insurance issued on\n\na substandard basis, the calculation of any such adjusted premiums\n\nand present values may be based on such other table of mortality as\n\nmay be specified by the insurer and approved by the Insurance\n\nCommissioner.\n\n2. This paragraph shall not apply to ordinary policies issued\n\non or after the operative date of paragraph 4 of this subsection as\n\ndefined therein. In the case of ordinary policies which comply with\n\nthe requirements of paragraph 2 of subsection D of this section\n\nissued on or after July 1, 1962, all adjusted premiums and present\n\nvalues referred to in this section may be calculated on the basis of\n\nthe Commissioners 1958 Standard Ordinary Mortality Table and the\n\nrate of interest specified in the policy for calculating cash\n\nsurrender values and paid-up nonforfeiture benefits, provided that\n\nsuch rate of interest shall not exceed three and one-half percent (3\n\n1/2%) per annum except that a rate of interest not exceeding four\n\npercent (4%) per annum may be used for policies issued on or after\n\nApril 11, 1974, and prior to March 17, 1978, and rate of interest\n\nnot exceeding five and one-half percent (5 1/2%) per annum may be\n\nused for policies issued on or after March 17, 1978, and provided\n\nthat for any category of ordinary insurance issued on female risks,\n\nadjusted premiums and present values may be calculated according to\n\nan age not more than six (6) years younger than the actual age of\n\nthe insured. Provided, however, that in calculating the present\n\nvalue of any paid-up term insurance with accompanying pure\n\nendowment, if any, offered as a nonforfeiture benefit, the rates of\n\nmortality assumed may be not more than those shown in the\n\nCommissioners 1958 Extended Term Insurance Table. Provided,\n\nfurther, that for insurance issued on a substandard basis, the\n\ncalculation of any such adjusted premiums and present values may be\n\nbased on such other table of mortality as may be specified by the\n\ncompany and approved by the Commissioner.\n\n3. This paragraph shall not apply to industrial policies issued\n\non or after the operative date of paragraph 4 of this subsection as\n\ndefined therein. In the case of industrial policies, which comply\n\nwith the requirements of paragraph 2 of subsection D of this\n\nsection, all adjusted premiums and present values referred to in\n\nthis section may be calculated on the basis of the Commissioners\n\n1961 Standard Industrial Mortality Table and the rate of interest\nued\n\non or after the operative date of paragraph 4 of this subsection as\n\ndefined therein. In the case of industrial policies, which comply\n\nwith the requirements of paragraph 2 of subsection D of this\n\nsection, all adjusted premiums and present values referred to in\n\nthis section may be calculated on the basis of the Commissioners\n\n1961 Standard Industrial Mortality Table and the rate of interest\n\nspecified in the policy for calculating cash surrender values and\n\npaid-up nonforfeiture benefits provided that such rate of interest\n\nshall not exceed three and one-half percent (3 1/2%) per annum\n\nexcept that a rate of interest not exceeding four percent (4%) per\n\nannum may be used for policies issued on or after April 11, 1974,\n\nand prior to March 17, 1978, and a rate of interest not exceeding\n\nfive and one-half percent (5 1/2%) per annum may be used for\n\npolicies issued on or after March 17, 1978. Provided, however, that\n\nin calculating the present value of any paid-up term insurance with\n\naccompanying pure endowment, if any, offered as a nonforfeiture\n\nbenefit, the rates of mortality assumed may be not more than those\n\nshown in the Commissioners 1961 Industrial Extended Term Insurance\n\nTable. Provided, further, that for insurance issued on a\n\nsubstandard basis, the calculation of any such adjusted premiums and\n\npresent values may be based on such other table of mortality as may\n\nbe specified by the company and approved by the Commissioner.\n\n4. (a) This paragraph shall apply to all policies issued on\n\nor after the operative date of this paragraph as\n\ndefined herein. Except as provided in subparagraph\n\n(g) of this paragraph, the adjusted premiums for any\n\npolicy shall be calculated on an annual basis and\n\nshall be such uniform percentage of the respective\n\npremiums specified in the policy for each policy year,\n\nexcluding amounts payable as extra premiums to cover\n\nimpairments or special hazards and also excluding any\n\nuniform annual contract charge or policy fee specified\n\nin the policy in a statement of the method to be used\n\nin calculating the cash surrender values and paid-up\n\nnonforfeiture benefits, that the present value, at the\n\ndate of issue of the policy, of all adjusted premiums\n\nshall be equal to the sum of (i) the then present\n\nvalue of the future guaranteed benefits provided for\n\nby the policy; (ii) one percent (1%) of either the\n\namount of insurance, if the insurance be uniform in\n\namount, or the average amount of insurance at the\n\nbeginning of each of the first ten (10) policy years;\n\nand (iii) one hundred twenty-five percent (125%) of\n\nthe nonforfeiture net level premium as hereinafter\n\ndefined. Provided, however, that in applying the\n\npercentage specified in (iii) above no nonforfeiture\n\nnet level premium shall be deemed to exceed four\n\npercent (4%) of either the amount of insurance, if the\n\ninsurance be uniform in amount, or the average amount\n\nof insurance at the beginning of each of the first ten\n\n(10) policy years. The date of issue of a policy for\n\nthe purpose of this paragraph shall be the date as of\n\nwhich the rated age of the insured is determined.\n\n(b) The nonforfeiture net level premium shall be equal to\n\nthe present value, at the date of issue of the policy,\n\nof the guaranteed benefits provided for by the policy\n\ndivided by the present value, at the date of issue of\n\nthe policy, of an annuity of one per annum payable on\n\nthe date of issue of the policy and on each\n\nanniversary of such policy on which a premium falls\n\ndue.\nd is determined.\n\n(b) The nonforfeiture net level premium shall be equal to\n\nthe present value, at the date of issue of the policy,\n\nof the guaranteed benefits provided for by the policy\n\ndivided by the present value, at the date of issue of\n\nthe policy, of an annuity of one per annum payable on\n\nthe date of issue of the policy and on each\n\nanniversary of such policy on which a premium falls\n\ndue.\n\n(c) In the case of policies which cause on a basis\n\nguaranteed in the policy unscheduled changes in\n\nbenefits or premiums, or which provide an option for\n\nchanges in benefits or premiums other than a change to\n\na new policy, the adjusted premiums and present values\n\nshall initially be calculated on the assumption that\n\nfuture benefits and premiums do not change from those\n\nstipulated at the date of issue of the policy. At the\n\ntime of any such change in the benefits or premiums\n\nthe future adjusted premiums, nonforfeiture net level\n\npremiums and present values shall be recalculated on\n\nthe assumption that future benefits and premiums do\n\nnot change from those stipulated by the policy\n\nimmediately after the change.\n\n(d) Except as otherwise provided in subparagraph (g) of\n\nthis paragraph, the recalculated future adjusted\n\npremiums for any such policy shall be such uniform\n\npercentage of the respective future premiums specified\n\nin the policy for each policy year, excluding amounts\n\npayable as extra premiums to cover impairments and\n\nspecial hazards, and also excluding any uniform annual\n\ncontract charge or policy fee specified in the policy\n\nin a statement of the method to be used in calculating\n\nthe cash surrender values and paid-up nonforfeiture\n\nbenefits, that the present value, at the time of\n\nchange to the newly defined benefits or premiums, of\n\nall such future adjusted premiums shall be equal to\n\nthe excess of\n\n(A) the sum of\n\n(i) the then present value of the then future\n\nguaranteed benefits provided for by the\n\npolicy and\n\n(ii) the additional expense allowance, if any,\n\nover\n\n(B) the then cash surrender value, if any, or present\n\nvalue of any paid-up nonforfeiture benefit under\n\nthe policy.\n\n(e) The additional expense allowance, at the time of the\n\nchange to the newly defined benefits or premiums,\n\nshall be the sum of\n\n(i) one percent (1%) of the excess, if positive, of\n\nthe average amount of insurance at the beginning\n\nof each of the first ten (10) policy years\n\nsubsequent to the change over the average amount\n\nof insurance prior to the change at the beginning\n\nof each of the first ten (10) policy years\n\nsubsequent to the time of the most recent\n\nprevious change, or, if there has been no\n\nprevious change, the date of issue of the policy;\n\nand\n\n(ii) one hundred twenty-five percent (125%) of the\n\nincrease, if positive, in the nonforfeiture net\n\nlevel premium.\n\n(f) The recalculated nonforfeiture net level premium shall\n\nbe equal to the result obtained by dividing (A) by (B)\n\nwhere\n\n(A) equals the sum of\n\n(i) the nonforfeiture net level premium\n\napplicable prior to the change times the\n\npresent value of an annuity of one per annum\n\npayable on each anniversary of the policy on\n\nor subsequent to the date of the change on\n\nwhich a premium would have fallen due had\n\nthe change not occurred, and\n\n(ii) the present value of the increase in future\n\nguaranteed benefits provided for by the\n\npolicy, and\n\n(B) equals the present value of an annuity of one per\n\nannum payable on each anniversary of the policy\n\non or subsequent to the date of change on which a\n\npremium falls due.\n844\n\nor subsequent to the date of the change on\n\nwhich a premium would have fallen due had\n\nthe change not occurred, and\n\n(ii) the present value of the increase in future\n\nguaranteed benefits provided for by the\n\npolicy, and\n\n(B) equals the present value of an annuity of one per\n\nannum payable on each anniversary of the policy\n\non or subsequent to the date of change on which a\n\npremium falls due.\n\n(g) Notwithstanding any other provisions of this paragraph\n\nto the contrary, in the case of a policy issued on a\n\nsubstandard basis which provides reduced graded\n\namounts of insurance so that, in each policy year,\n\nsuch policy has the same tabular mortality cost as an\n\notherwise similar policy issued on the standard basis\n\nwhich provides higher uniform amounts of insurance,\n\nadjusted premiums and present values for such\n\nsubstandard policy may be calculated as if it were\n\nissued to provide such higher uniform amounts of\n\ninsurance on the standard basis.\n\n(h) All adjusted premiums and present values referred to\n\nin this section shall for all policies of ordinary\n\ninsurance be calculated on the basis of (i) the\n\nCommissioners 1980 Standard Ordinary Mortality Table\n\nor (ii) at the election of the insurer for any one or\n\nmore specified plans of life insurance, the\n\nCommissioners 1980 Standard Ordinary Mortality Table\n\nwith Ten-Year Select Mortality Factors; shall for all\n\npolicies of industrial insurance be calculated on the\n\nbasis of the Commissioners 1961 Standard Industrial\n\nMortality Table; and shall for all policies issued in\n\na particular calendar year be calculated on the basis\n\nof a rate of interest not exceeding the nonforfeiture\n\ninterest rate as defined in this paragraph for\n\npolicies issued in that calendar year. Provided,\n\nhowever, that:\n\n(i) At the option of the insurer, calculations for\n\nall policies issued in a particular calendar year\n\nmay be made on the basis of a rate of interest\n\nnot exceeding the nonforfeiture interest rate, as\n\ndefined in this paragraph, for policies issued in\n\nthe immediately preceding calendar year.\n\n(ii) Under any paid-up nonforfeiture benefit,\n\nincluding any paid-up dividend additions, any\n\ncash surrender value available, whether or not\n\nrequired by subsection B of this section, shall\n\nbe calculated on the basis of the mortality table\n\nand rate of interest used in determining the\n\namount of such paid-up nonforfeiture benefit and\n\npaid-up dividend additions, if any.\n\n(iii) An insurer may calculate the amount of any\n\nguaranteed paid-up nonforfeiture benefit\n\nincluding any paid-up additions under the policy\n\non the basis of an interest rate no lower than\n\nthat specified in the policy for calculating cash\n\nsurrender values.\n\n(iv) In calculating the present value of any paid-up\n\nterm insurance with accompanying pure endowment,\n\nif any, offered as a nonforfeiture benefit, the\n\nrates of mortality assumed may be not more than\n\nthose shown in the Commissioners 1980 Extended\n\nTerm Insurance Table for policies of ordinary\n\ninsurance and not more than the Commissioners\n\n1961 Industrial Extended Term Insurance Table for\n\npolicies of industrial insurance.\nent value of any paid-up\n\nterm insurance with accompanying pure endowment,\n\nif any, offered as a nonforfeiture benefit, the\n\nrates of mortality assumed may be not more than\n\nthose shown in the Commissioners 1980 Extended\n\nTerm Insurance Table for policies of ordinary\n\ninsurance and not more than the Commissioners\n\n1961 Industrial Extended Term Insurance Table for\n\npolicies of industrial insurance.\n\n(v) For insurance issued on a substandard basis, the\n\ncalculation of any such adjusted premiums and\n\npresent values may be based on appropriate\n\nmodifications of the aforementioned tables.\n\n(vi) For policies issued prior to the operative date\n\nof the valuation manual, any Commissioners\n\nStandard mortality tables, adopted after 1980 by\n\nthe National Association of Insurance\n\nCommissioners, that are approved by regulation\n\npromulgated by the Commissioner for use in\n\ndetermining the minimum nonforfeiture standard\n\nmay be substituted for the Commissioners 1980\n\nStandard Ordinary Mortality Table with or without\n\nTen-Year Select Mortality Factors or for the\n\nCommissioners 1980 Extended Term Insurance Table.\n\nFor policies issued on or after the operative\n\ndate of the valuation manual, the valuation\n\nmanual shall provide the Commissioners Standard\n\nmortality table for use in determining the\n\nminimum nonforfeiture standard that may be\n\nsubstituted for the Commissioners 1980 Standard\n\nOrdinary Mortality Table with or without Ten-Year\n\nSelect Mortality Factors or for the Commissioners\n\n1980 Extended Term Insurance Table. If the\n\ncommissioner approves by rule any Commissioners\n\nStandard mortality table adopted by the National\n\nAssociation of Insurance Commissioners for use in\n\ndetermining the minimum nonforfeiture standard\n\nfor policies issued on or after the operative\n\ndate of the valuation manual then that minimum\n\nnonforfeiture standard supersedes the minimum\n\nnonforfeiture standard provided by the valuation\n\nmanual, and\n\n(vii) For policies issued prior to the operative date\n\nof the valuation manual, any Commissioners\n\nStandard industrial mortality tables, adopted\n\nafter 1980 by the National Association of\n\nInsurance Commissioners, that are approved by\n\nregulation promulgated by the Commissioner for\n\nuse in determining the minimum nonforfeiture\n\nstandard may be substituted for the Commissioners\n\n1961 Standard Industrial Mortality Table or the\n\nCommissioners 1961 Industrial Extended Term\n\nInsurance Table.\n\nFor policies issued on or after the operative\n\ndate of the valuation manual the valuation manual\n\nshall provide the Commissioner's Standard\n\nmortality table for use in determining the\n\nminimum nonforfeiture standard that may be\n\nsubstituted for the Commissioners 1961 Standard\n\nIndustrial Mortality Table or the Commissioners\n\n1961 Industrial Extended Term Insurance Table.\n\nIf the commissioner approves by regulation any\n\nCommissioner's Standard industrial mortality\n\ntable adopted by the National Association of\n\nInsurance Commissioners for use in determining\n\nthe minimum nonforfeiture standard for policies\n\nissued on or after the operative date of the\n\nvaluation manual then that minimum nonforfeiture\n\nstandard supersedes the minimum nonforfeiture\n\nstandard provided by the valuation manual.\n\n(i) The nonforfeiture interest rate is defined below:\ntrial mortality\n\ntable adopted by the National Association of\n\nInsurance Commissioners for use in determining\n\nthe minimum nonforfeiture standard for policies\n\nissued on or after the operative date of the\n\nvaluation manual then that minimum nonforfeiture\n\nstandard supersedes the minimum nonforfeiture\n\nstandard provided by the valuation manual.\n\n(i) The nonforfeiture interest rate is defined below:\n\n(i) For policies issued prior to the operative date\n\nof valuation manual, the nonforfeiture interest\n\nrate per annum for any policy issued in a\n\nparticular calendar year shall be equal to one\n\nhundred twenty-five percent (125%) of the\n\ncalendar year statutory valuation interest rate\n\nfor such policy as defined in the Standard\n\nValuation Law, rounded to the nearest one-fourth\n\nof one percent (1/4 of 1%); provided, however,\n\nthat the nonforfeiture interest rate shall not be\n\nless than four percent (4%), and\n\n(ii) For policies issued on and after the operative\n\ndate of the valuation manual the nonforfeiture\n\ninterest rate per annum for any policy issued in\n\na particular calendar year shall be provided by\n\nthe valuation manual.\n\n(j) Notwithstanding any other provision in this code to\n\nthe contrary, any refiling of nonforfeiture values or\n\ntheir methods of computation for any previously\n\napproved policy form which involves only a change in\n\nthe interest rate or mortality table used to compute\n\nnonforfeiture values shall not require refiling of any\n\nother provisions of that policy form.\n\n(k) Any insurer may file with the Commissioner a written\n\nnotice of its election to comply with the provisions\n\nof this paragraph after a specified date before\n\nJanuary 1, 1989, which specified date shall be the\n\noperative date of this paragraph for such insurer. If\n\nan insurer makes no such election, the operative date\n\nof this paragraph for such insurer shall be January 1,\n\n1989.\n\nJ. In the case of any plan of life insurance which provides for\n\nfuture premium determination, the amounts of which are to be\n\ndetermined by the insurer based on then estimates of future\n\nexperience, or in the case of any plan of life insurance which is of\n\nsuch a nature that minimum values cannot be determined by the\n\nmethods described in subsections B through I of this section:\n\n1. The Commissioner must be satisfied that the benefits\n\nprovided under the plan are substantially as favorable to\n\npolicyholders and insureds as the minimum benefits otherwise\n\nrequired by subsections B through I of this section;\n\n2. The Commissioner must be satisfied that the benefits and the\n\npattern of premiums of that plan are not such as to mislead\n\nprospective policyholders or insureds;\n\n3. The cash surrender values and paid-up nonforfeiture benefits\n\nprovided by such plan must not be less than the minimum values and\n\nbenefits required for the plan computed by a method consistent with\n\nthe principles of this Standard Nonforfeiture Law for Life\n\nInsurance, as determined by regulations promulgated by the\n\nCommissioner.\n\nK. Calculation of Values: Any cash surrender value and any\n\npaid-up nonforfeiture benefit available under the policy in the\n\nevent of default in a premium payment due at any time other than on\n\nthe policy anniversary shall be calculated with allowance for the\n\nlapse of time and the payment of fractional premiums beyond the last\n\npreceding policy anniversary, except in the case of industrial\n\ninsurance proportionate increases in value may be calculated on the\n\nbasis of quarter-year payments. All values referred to in\n\nsubsections D, F, G, H and I of this section may be calculated upon\n\nthe assumption that any death benefit is payable at the end of the\n\npolicy year of death. The net value of any paid-up additions, other\n\nthan paid-up term additions, shall be not less than the amounts used\n\nto provide such additions. Notwithstanding the provisions of\nferred to in\n\nsubsections D, F, G, H and I of this section may be calculated upon\n\nthe assumption that any death benefit is payable at the end of the\n\npolicy year of death. The net value of any paid-up additions, other\n\nthan paid-up term additions, shall be not less than the amounts used\n\nto provide such additions. Notwithstanding the provisions of\n\nsubsection D of this section, additional benefits payable (1) in the\n\nevent of death or dismemberment by accident or accidental means, (2)\n\nin the event of total and permanent disability, (3) as reversionary\n\nannuity or deferred reversionary annuity benefits, (4) as term\n\ninsurance benefits provided by a rider or supplemental policy\n\nprovision to which, if issued as a separate policy, this section\n\nwould not apply, (5) as term insurance on the life of a child or on\n\nthe lives of children provided in a policy on the life of a parent\n\nof the child, if such term insurance expires before the child's age\n\nis twenty-six (26) years, is uniform in amount after the child's age\n\nis one (1) year, and has not become paid up by reason of the death\n\nof a parent of the child, and (6) as other policy benefits\n\nadditional to life insurance and endorsement benefits, and premiums\n\nfor all such additional benefits, shall be disregarded in\n\nascertaining cash surrender values and nonforfeiture benefits\n\nrequired by this section, and no such additional benefits shall be\n\nrequired to be included in any paid-up nonforfeiture benefits.\n\nL. This subsection, in addition to all other applicable\n\nsubsections of this section, shall apply to all policies issued on\n\nor after January 1, 1986. Any cash surrender value available under\n\nthe policy in the event of default in a premium payment due on any\n\npolicy anniversary, shall be in an amount which does not differ by\n\nmore than two-tenths of one percent (2/10 of 1%) of either the\n\namount of insurance, if the insurance be uniform in amount, or the\n\naverage amount of insurance at the beginning of each of the first\n\nten (10) policy years, from the sum of (a) the greater of zero and\n\nthe basic cash value hereinafter specified and (b) the present value\n\nof any existing paid-up additions less the amount of any\n\nindebtedness to the insurer under the policy.\n\nThe basic cash value shall be equal to the present value, on\n\nsuch anniversary, of the future guaranteed benefits which would have\n\nbeen provided for by the policy, excluding any existing paid-up\n\nadditions and before deduction of any indebtedness to the insurer,\n\nif there had been no default, less the then present value of the\n\nnonforfeiture factors, as hereinafter defined, corresponding to\n\npremiums which would have fallen due on and after such anniversary.\n\nProvided, however, that the effects on the basic cash value of\n\nsupplemental life insurance or annuity benefits or of family\n\ncoverage, as described in subsection D or H of this section,\n\nwhichever is applicable, shall be the same as are the effects\n\nspecified in subsection D or H of this section, whichever is\n\napplicable on the cash surrender values defined in that subsection.\n\nThe nonforfeiture factor for each policy year shall be an amount\n\nequal to a percentage of the adjusted premium for the policy year,\n\nas defined in subsection G or I of this section, whichever is\n\napplicable. Except as is required by the next succeeding sentence\n\nof this paragraph, such percentage:\n\n1. Must be the same percentage for each policy year between the\n\nsecond policy anniversary and the later of (i) the fifth policy\n\nanniversary and (ii) the first policy anniversary at which there is\n\navailable under the policy a cash surrender value in an amount,\n\nbefore including any paid-up additions and before deducting any\n\nindebtedness, of at least two-tenths of one percent (2/10 of 1%) of\n\neither the amount of insurance, if the insurance be uniform in\nthe\n\nsecond policy anniversary and the later of (i) the fifth policy\n\nanniversary and (ii) the first policy anniversary at which there is\n\navailable under the policy a cash surrender value in an amount,\n\nbefore including any paid-up additions and before deducting any\n\nindebtedness, of at least two-tenths of one percent (2/10 of 1%) of\n\neither the amount of insurance, if the insurance be uniform in\n\namount, or the average amount of insurance at the beginning of each\n\nof the first ten (10) policy years; and\n\n2. Must be such that no percentage after the later of the two\n\npolicy anniversaries specified in the preceding paragraph 1 may\n\napply to fewer than five (5) consecutive policy years.\n\nProvided, that no basic cash value may be less than the value\n\nwhich would be obtained if the adjusted premiums for the policy, as\n\ndefined in subsection G or I of this section, whichever is\n\napplicable, were substituted for the nonforfeiture factors in the\n\ncalculation of the basic cash value.\n\nAll adjusted premiums and present values referred to in this\n\nsection shall for a particular policy be calculated on the same\n\nmortality and interest bases as are used in demonstrating the\n\npolicy's compliance with the other subsections of this section. The\n\ncash surrender values referred to in this subsection shall include\n\nany endowment benefits provided for by the policy.\n\nAny cash surrender value available other than in the event of\n\ndefault in a premium payment due on a policy anniversary, and the\n\namount of any paid-up nonforfeiture benefit available under the\n\npolicy in the event of default in a premium payment shall be\n\ndetermined in manners consistent with the manners specified for\n\ndetermining the analogous minimum amounts in subsections B, C, D and\n\nK and paragraph 4 of subsection I of this section. The amounts of\n\nany cash surrender values and of any paid-up nonforfeiture benefits\n\ngranted in connection with additional benefits such as those listed\n\nas items (1) through (6) in subsection K of this section shall\n\nconform with the principles of this subsection.\n\nM. 1. This section shall not apply to any of the following:\n\na. reinsurance,\n\nb. group insurance,\n\nc. pure endowment,\n\nd. annuity or reversionary annuity contract,\n\ne. except as provided in paragraph 1 of subsection D of\n\nthis section, term policy of uniform amount, which\n\nprovides no guaranteed nonforfeiture or endowment\n\nbenefits, or renewal thereof, of twenty (20) years or\n\nless expiring before age seventy-one (71) years, for\n\nwhich uniform premiums are payable during the entire\n\nterm of the policy,\n\nf. except as provided in paragraph 1 of subsection D of\n\nthis section, term policy of decreasing amount which\n\nprovides no guaranteed nonforfeiture or endowment\n\nbenefits, on which each adjusted premium, calculated\n\nas specified in subsections G, H and I of this\n\nsection, is less than the adjusted premium so\n\ncalculated on a term policy of uniform amount, or\n\nrenewal thereof, which provides no guaranteed\n\nnonforfeiture or endowment benefits, issued at the\n\nsame age and for the same initial amount of insurance\n\nfor a term defined as follows: For ages at issue\n\nfifty (50) years and under the term shall be twenty\n\n(20) years. Thereafter the term shall decrease one\n\n(1) year for each year of increase in the age at issue\n\nbeyond age fifty (50) years; and\n\ng. policy, which provides no guaranteed nonforfeiture or\n\nendowment benefits, for which no cash surrender value,\n\nif any, or present value of any paid-up nonforfeiture\n\nbenefit at the beginning of any policy year,\n\ncalculated as specified in subsections D, F, G, H and\n\nI of this section, exceeds two and one-half percent (2\n\n1/2%) of the amount of insurance at the beginning of\n\nthe same policy year.\n\n2. For purposes of determining the applicability of this act,\n\nthe age at expiry for a joint term life insurance policy shall be\n\nthe age at expiry of the oldest life.","path":["OK Code","Title 36"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os36.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"bd16f0f900415f53c45211120acf668e46ef073726bb8a146641ba8c46ac06d9","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-36-36-4028","next":"us-ok/okla.-stat.-tit.-36-36-403"},"notice":"GroundRules: Original legal text. Not legal advice."}