DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES

INSURANCE BUREAU

SMOKER AND NONSMOKER MORTALITY TABLES

(By authority conferred on the commissioner of insurance by sections 210, 834, and 4060

of Act No. 218 of the Public Acts of 1956, as amended, being SS500.210, 500.834, and

500.4060 of the Michigan Compiled Laws)

R 500.1281 Definitions.

Rule 1. As used in these rules:

(a) "1958 CET table" means that mortality table developed by the society of actuaries

special committee on new mortality tables which is incorporated in the NAIC model

standard nonforfeiture law for life insurance and which is referred to in that model as the

commissioners 1958 extended term insurance table.

(b) "1980 CET table" means that mortality table consisting of separate rates of mortality

for male and female lives which is developed by the society of actuaries committee to

recommend new mortality tables for valuation of standard individual ordinary life

insurance, which is incorporated in the 1980 NAIC amendments to

the

model

standard nonforfeiture law for life insurance, and which is referred to in those models as the

commissioners 1980 extended term insurance table.

(b), (d), and (e) of this rule as they were originally published with rates of mortality that do

not distinguish between smokers and nonsmokers.

(d) "1958 CSO table" means that mortality table developed by the society of actuaries

special committee on new mortality tables which is incorporated in the NAIC model

standard nonforfeiture law for life insurance and which is referred to in that model as the

commissioners 1958 standard ordinary mortality table.

(e) "1980 CSO table, with or without 10-year select mortality factors" means that

mortality table which consists of separate rates of mortality for male and female lives, which

is developed by the society of actuaries committee to recommend new mortality tables for

valuation of standard individual ordinary life insurance, which is incorporated in the 1980

NAIC amendments to the model standard valuation law, and standard nonforfeiture law for life

insurance, and which is referred to in those models as the commissioners 1980 standard

ordinary mortality table, with or without 10-year select mortality factors. The same select

factors shall be used for both smokers and nonsmokers tables.

(f) "NAIC" means national association of insurance commissioners.

(g) "Smoker and nonsmoker mortality tables" means the mortality tables with separate

rates of mortality for smokers and nonsmokers derived from the tables defined in subdivisions

(a), (b), (d), and (e) of this rule which were developed by the society of actuaries task force

on smoker and nonsmoker mortality and the California insurance department staff,

recommended by the NAIC technical staff actuarial group, and adopted by the national

association of insurance commissioners on December 8, 1983.

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History: 1986 AACS.

R 500.1282 Adoption by reference.

Rule 2. The 1980 CSO table, with or without 10-year select mortality factors, the 1958

CSO table, the 1980 CET table, the 1958 CET table, and the corresponding smoker and

nonsmoker mortality tables are adopted by reference and incorporated in these rules. A copy

of the tables may be obtained free of charge from the Michigan Insurance Bureau, P.O.

Box 30220, Lansing, Michigan 48909, or at a cost of 20 cents per page from the National

Association of Insurance Commissioners, 1125 Grand Avenue, Kansas City, Missouri 64106.

History: 1986 AACS.

R 500.1283 Utilization of the 1958 CSO and CET smoker and nonsmoker

mortality tables.

Rule 3. (1) In determining minimum cash surrender values, minimum amounts and

minimum periods of paid-up nonforfeiture benefits and minimum reserve liabilities, the 1958

CSO and CET smoker and nonsmoker mortality tables may only be used as set forth in this

rule. The requirements of this rule shall apply to any policy of insurance delivered or issued

for delivery in this state after the operative date of paragraphs 9 to 19 of section 4060(5) of

Act No. 218 of the Public Acts of 1956, as amended, being S500.4060(5), paragraphs 9 to

19, of the Michigan Compiled Laws, for that policy form, and before January 1, 1989. The

1958 CSO smoker and nonsmoker mortality tables may be substituted for the 1980 CSO

table, with or without 10-year select mortality factors, and the 1958 CET smoker and

nonsmoker mortality tables may be substituted for the 1980 CET table.

(2) For any category of insurance issued on female lives with minimum reserve

liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture

benefits determined using the 1958 CSO or 1958 CET smoker and nonsmoker mortality

tables, such minimum values may be calculated according to an age not more than 6 years

younger than the actual age of the insured.

(3) The 1958 CSO and CET smoker and nonsmoker mortality tables shall be utilized

only if they are applicable to every insurance policy corresponding to the policy form

for which the insurer has elected to use these tables.

History: 1986 AACS.

R 500.1284 Utilization of the 1980 CSO and CET smoker and nonsmoker

mortality tables.

Rule 4. (1) In determining minimum cash surrender values, minimum amounts and

minimum periods of paid-up nonforfeiture benefits and minimum reserve liabilities, the 1980

CSO and CET smoker and nonsmoker mortality tables may only be used as set forth in this

rule. The requirements of this rule shall apply to any policy of insurance delivered or issued

for delivery in this state after the operative date of paragraphs 9 to 19 of section 4060(5) of

Act No. 218 of the Public Acts of 1956, as amended, being S500.4060(5), paragraphs 9 to

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19, of the Michigan Compiled Laws, for that policy form, at the option of the company. The

1980 CSO smoker and nonsmoker mortality tables, with or without 10-year select

mortality factors, may be substituted for the 1980 CSO table, with or without 10-year

select mortality tables, and the 1980 CET smoker and nonsmoker mortality tables may be

substituted for the 1980 CET table.

(2) The 1980 CSO and CET smoker and nonsmoker mortality tables are sex-distinct

tables. They may be gender blended in accordance with the provisions of R 500.1221 to R

500.1224.

(3) The 1980 CSO and CET smoker and nonsmoker mortality tables shall be utilized only

if they are applicable to every insurance corresponding to the policy form for which the

insurer has elected to use these tables.

History: 1986 AACS.

R 500.1285 Insurance plan with separate rates for smokers and nonsmokers;

selection of method to determine issues of plan.

Rule 5. (1) For each plan of insurance with separate rates for smokers and nonsmokers

an insurer may select 1 of the following methods to apply to such plan:

(a) Use composite mortality tables to determine minimum

reserve liabilities,

minimum cash surrender values, and amounts of paid-up nonforfeiture benefits.

(b) Use smoker and nonsmoker mortality tables to determine the valuation net premiums

and additional minimum reserves, if any, required by section 834(6) of Act No. 218 of the

Public Acts of 1956, as amended, being S500.834(6) of the Michigan Compiled Laws, and

use composite mortality tables to determine the basic minimum reserves, minimum cash

surrender values, and amounts of paid-up nonforfeiture benefits.

liabilities, minimum cash surrender values, and amounts of paid-up nonforfeiture benefits.

(2) Once an insurer has selected 1 of the methods specified in subrule (1) of this rule to

apply with respect to a particular plan of insurance, such method shall not be changed

without the prior approval of the commissioner.

History: 1986 AACS.

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