Pennsylvania Code & Bulletin
COMMONWEALTH OF PENNSYLVANIA

• No statutes or acts will be found at this website.

The Pennsylvania Bulletin website includes the following: Rulemakings by State agencies; Proposed Rulemakings by State agencies; State agency notices; the Governor’s Proclamations and Executive Orders; Actions by the General Assembly; and Statewide and local court rules.

PA Bulletin, Doc. No. 11-139

RULES AND REGULATIONS

INSURANCE DEPARTMENT

[ 31 PA. CODE CH. 84d ]

Recognition of the 2001 CSO Mortality Table for Use in Determining Minimum Reserve Liabilities and Nonforfeiture Benefits and the 2001 CSO Preferred Class Structure Mortality Table for Use in Determining Minimum Reserve Liabilities

[41 Pa.B. 601]
[Saturday, January 29, 2011]

 The Insurance Department (Department) amends Chapter 84d (relating to recognition of the 2001 CSO Mortality Table for use in determining minimum reserve liabilities and nonforfeiture benefits and the 2001 CSO Preferred Class Structure Mortality Table for use in determining minimum reserve liabilities). This final-form rulemaking is made under the authority of sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. §§ 66, 186, 411 and 412), section 301(c)(1) of The Insurance Department Act of 1921 (40 P. S. § 71(c)(1)), section 410A(e)(8)(F) of The Insurance Company Law of 1921 (40 P. S. § 510.1(e)(8)(F)) and the Unfair Insurance Practices Act (40 P. S. §§ 1171.1—1171.15). See also § 84c.5(a) and (b) (relating to general requirements for basic reserves and premium deficiency reserves).

Purpose

 Section 301(c)(1) of The Insurance Department Act of 1921 authorizes the Insurance Commissioner (Commissioner) to promulgate regulations specifying new mortality tables adopted after 1980 by the National Association of Insurance Commissioners (NAIC) for use in determining minimum valuation standards. The purpose of this final-form rulemaking is to update Chapter 84d to include amendments made by the NAIC to Model Regulation 815, ''Model Regulation Permitting the Recognition of Preferred Mortality Tables for Use in Determining Minimum Reserve Liabilities.'' The model regulation recognizes, permits and prescribes the use of mortality tables that reflect differences in mortality between preferred and standards lives in determining minimum reserve liabilities.

Comments and Response

 Notice of proposed rulemaking was published at 40 Pa.B. 5067 (September 4, 2010) with a 30-day comment period. One comment in support of the amendments was received from the Insurance Federation of Pennsylvania, Inc. On November 3, 2010, the Independent Regulatory Review Commission (IRRC) indicated that it did not have comments, objections or recommendations regarding on this rulemaking.

Affected Parties

 This final-form rulemaking applies to insurers issuing life insurance coverage in this Commonwealth.

Fiscal Impact

State government

 There will not be an increase in cost to the Department due to the use of the new mortality table since the extent of the analysis performed by the Department is not affected by the mortality table used in the calculation of reserves.

General public

 It is possible that the cost of insurance will be reduced for consumers who purchase life insurance coverage due to improved mortality recognized by the 2001 CSO Preferred Class Structure Mortality Table.

Political subdivisions

 There will not be fiscal impact on political subdivisions as insurers will continue to maintain adequate reserves.

Private sector

 The use of the 2001 CSO Preferred Class Structure Mortality Table generally will reduce the reserve liabilities of an insurance company. In addition, the use of the table is optional.

Paperwork

 The adoption of this final-form rulemaking will not impose additional paperwork on the Department. An insurance company that elects to use the 2001 CSO Preferred Class Structure Mortality Table as the minimum valuation standard will be required to submit at election and annually thereafter a certification to the Commissioner that the conditions for use of the table are satisfied.

Effectiveness/Sunset Date

 The rulemaking will become effective March 30, 2011. The Department continues to monitor the effectiveness of regulations on a triennial basis; therefore, a sunset date has not been assigned.

Contact Person

 Questions regarding the final-form rulemaking should be directed to Peter J. Salvatore, Regulatory Coordina- tor, Insurance Department, 1326 Strawberry Square, Harrisburg, PA 17120, (717) 787-4429, fax (717) 705-3873, psalvatore@state.pa.us.

Regulatory Review

 Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on November 9, 2010, the Department submitted a copy of the notice of proposed rulemaking, published at 40 Pa.B. 5067 to IRRC and the Chairpersons of the Senate Banking and Insurance Committee and the House Insurance Committee for review and comment.

 Under section 5(c) of the Regulatory Review Act, IRRC and the House and Senate Committees were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Department has considered all comments from IRRC, the House and Senate Committees and the public.

 Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on December 15, 2010, the final-form rulemaking was deemed approved by the House and Senate Committees. Under section 5.1(e) of the Regulatory Review Act, IRRC met on December 16, 2010, and approved the final-form rulemaking.

Findings

 The Commissioner finds that:

 (1) Public notice of intention to adopt this final-form rulemaking was given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2.

 (2) The adoption of this final-form rulemaking in the manner provided in this order is necessary and appropriate for the administration and enforcement of the authorizing statutes.

Order

 The Commissioner, acting under the authorizing statutes, orders that:

 (a) The regulations of the Department, 31 Pa. Code Chapter 84d, are amended by amending § 84d.3a to read as set forth at 40 Pa.B. 5067.

 (b) The Department shall submit this order and 40 Pa.B. 5067 to the Office of General Counsel and Office of Attorney General for approval as to form and legality as required by law.

 (c) The Department shall certify this order and 40 Pa.B. 5067 and deposit them with the Legislative Reference Bureau as required by law.

 (d) The final-form rulemaking takes effect March 30, 2011.

ROBERT L. PRATTER, 
Acting Insurance Commissioner

 (Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 41 Pa.B. 118 (January 1, 2011).)

Fiscal Note: Fiscal Note 11-246 remains valid for the final adoption of the subject regulation.

[Pa.B. Doc. No. 11-139. Filed for public inspection January 28, 2011, 9:00 a.m.]



No part of the information on this site may be reproduced for profit or sold for profit.

This material has been drawn directly from the official Pennsylvania Bulletin full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.