{"data":{"id":"us-va/14vac5-320-70-1","jurisdiction":"us-va","citation":"14VAC5-320-70:1","heading":"APPENDIX A. SPECIFIC STANDARDS FOR MORBIDITY, INTEREST AND MORTALITY","body":"APPENDIX A. SPECIFIC STANDARDS FOR MORBIDITY, INTEREST AND MORTALITY.\n\nI. MORBIDITY\n\nA. Minimum morbidity standards for valuation of specified individual contract accident and sickness insurance benefits are as follows:\n\n1. Disability Income Benefits Due to Accident or Sickness.\n\na. Contract Reserves:\n\nContracts issued on or after January 1, 1965 and prior to January 1, 1986:\n\nThe 1964 Commissioners Disability Table (64 CDT).\n\nContracts issued on or after January 1, 1994:\n\nThe 1985 Commissioners Individual Disability Tables A (85CIDA):\n\nOr\n\nThe 1985 Commissioners Individual Disability Tables B (85CIDB).\n\nContracts issued during 1986 through 1993:\n\nOptional use of either the 64CDT or the appropriate 1985 tables (85CIDA and/or 85CIDB).\n\nEach company shall elect, with respect to all individual contracts issued in any one statement year, whether it will use Tables A or Tables B as the minimum standard. The company may, however, elect to use the other tables with respect to any subsequent statement year.\n\nb. Claim Reserves:\n\nThe minimum morbidity standard in effect for contract reserves on currently issued contracts, as of the date the claim is incurred.\n\n2. Hospital Benefits, Surgical Benefits and Maternity Benefits (Scheduled benefits or fixed time period benefits only).\n\na. Contract Reserves:\n\nContracts issued on or after January 1, 1955, and before January 1, 1982:\n\nThe 1956 Intercompany Hospital-Surgical Tables.\n\nContracts issued on or after January 1, 1982:\n\nThe 1974 Medical Expense Tables, Table A, Transactions of the Society of Actuaries, Volume XXX, pg. 63. Refer to the paper (in the same volume, pg. 9) to which this table is appended, including its discussions, for methods of adjustment for benefits not directly valued in Table A: \"Development of the 1974 Medical Expense Benefits,\" Houghton and Wolf.\n\nb. Claim Reserves:\n\nNo specific standard. See 5, below.\n\n3. Cancer Expense Benefits (Scheduled benefits or fixed time period benefits only).\n\na. Contract Reserves:\n\nContracts issued prior to January 1, 1986:\n\nAny tables established for reserve purposes by a qualified actuary and acceptable to the Commission provided, however that the 1974 Cancer Tables as published by Nelson \u0026 Warren, Inc. (74N\u0026W Tables) shall not be used unless:\n\n(1) A qualified actuary renders an opinion annually in writing indicating that the use of such tables is appropriate and produces reserves which are based on credible experience or other assumptions designed to place a sound value on the insurer's liabilities; or\n\n(2) An additional reserve is held in addition to the reserve calculated pursuant to the 74N\u0026W Tables, which additional reserve shall be based on the difference between the company's calculated reserve and the reservation which would be produced by use of the 1985 NAIC Cancer Claim Cost Tables (NAIC Tables) in an amount not less than the following:\n\n(a) As of 12/31/94: the additional reserve divided by three; and\n\n(b) As of 12/31/95: two times the additional reserve divided by three; and\n\n(c) As of 1/1/96 and all years thereafter: the full amount of reserve as required and calculated in accordance with the NAIC Tables.\n\nContracts issued on or after January 1, 1986:\n\nThe NAIC Tables\n\nb. Claim Reserves:\n\nNo Specific standard. See 5, below.\n\n4. Accidental Death Benefits.\n\na. Contract Reserves; Contracts issued on or after January 1, 1965:\n\nThe 1959 Accidental Death Benefits Table.\n\nb. Claim Reserves:\n\nActual amount incurred.\n\n5. Other Individual Contract Benefits.\n\na. Contract Reserves:\n\nFor all other individual contract benefits, morbidity assumptions are to be determined as provided in the reserve standards.\n\nb. Claim Reserves:\n\nFor all benefits other than disability, claim reserves are to be determined as provided in the standards.\n\nB. Minimum morbidity standards for valuation of specified group contract accident and sickness insurance benefits are as follows:\n\n1. Disability Income Benefits Due to Accident or Sickness.\n\na. Contract Reserves:\n\nContracts issued prior to January 1, 1994:\n\nThe same basis, if any, as that employed by the company as of December 31, 1993;\n\nContracts issued on or after January 1, 1994;\n\nThe 1987 Commissioners Group Disability Income Table (87CGDT).\n\nb. Claim Reserves:\n\nFor claims incurred on or after January 1, 1994;\n\nThe 1987 Commissioners Group Disability Income Table (87CGDT);\n\nFor claims incurred prior to January 1, 1994:\n\nUse of the 87CGDT is optional.\n\n2. Other Group Contract Benefits.\n\na. Contract Reserves:\n\nFor all other group contract benefits, morbidity assumptions are to be determined as provided in the reserve standards.\n\nb. Claim Reserves:\n\nFor all benefits other than disability, claim reserves are to be determined as provided in the standards.\n\nII. INTEREST\n\nA. For contract reserves the maximum interest rate is the maximum rate permitted by law in the valuation of whole life insurance issued on the same date as the accident and sickness insurance contract.\n\nB. For claim reserves on policies that require contract reserves, the maximum interest rate is the maximum rate permitted by law in the valuation of whole life insurance issued on the same date as the claim incurral date.\n\nC. For claim reserves on policies not requiring contract reserves, the maximum interest rate is the maximum rate permitted by law in the valuation of single premium immediate annuities issued on the same date as the claim incurral date, reduced by 100 basis points.\n\nIII. MORTALITY\n\nA. Except as provided in subsection B, the mortality basis used shall be according to a table (but without use of selection factors) permitted by law for the valuation of whole life insurance issued on the same date as the accident and sickness insurance contract.\n\nB. Other mortality tables adopted by the NAIC and promulgated by the Commission may be used in the calculation of the minimum reserve if appropriate for the type of benefits and if approved by the Commission. The request for such approval must include the proposed mortality table and the reason that the standard specified in subsection A is inappropriate.","path":["Title 14. Insurance","Agency 5. State Corporation Commission, Bureau of Insurance","Chapter 320. Rules Establishing Minimum Reserve Standards for Individual and Group Accident and Sickness Insurance Contracts"],"source_url":"https://law.lis.virginia.gov/admincode/title14/agency5/chapter320/section70:1/","current_through":"2026 Regular Session (effective July 1, 2026)","vintage":"","retrieved_at":"2026-09-14T04:51:58Z","sha256":"a71e9ab1e15370209c9e74eeaefd5d3daec4693d8d5e4e553fdb44de83e0f09b","source_id":"us-va-vac","stale":false,"prev":"us-va/14vac5-320-70","next":"us-va/14vac5-320-70-2"},"notice":"GroundRules: Original legal text. Not legal advice."}