# Title 45 — Insurance, Commissioner of

## Article 45-04 — Life Insurance

## Chapter 45-04-07.3 — Pre-Need Life Insurance Minimum Standards for Determining Reserve Liabilities and Nonforfeiture Values

### § 45-04-07.3-01. Definitions.

1. "2001 CSO mortality table" means that mortality table, consisting of separate rates of mortality
for male and female lives, developed by the American academy of actuaries CSO task force
from the valuation basic mortality table developed by the society of actuaries individual life
insurance valuation mortality task force, and adopted by the national association of insurance
commissioners in December 2002. The 2001 CSO mortality table is included in the
proceedings of the national association of insurance commissioners (second quarter 2002).
Unless the context indicates otherwise, the "2001 CSO mortality table" includes both the
ultimate form of that table and the select and ultimate form of that table and includes both the
smoker and nonsmoker mortality tables and the composite mortality tables. It also includes
both the age-nearest-birthday and age-last-birthday bases of the mortality tables.
2. "Ultimate 1980 CSO" means the commissioners' 1980 standard ordinary life valuation
mortality tables (1980 CSO) without ten-year selection factors, incorporated into the 1980
amendments to the national association of insurance commissioners standard valuation law
approved in December 1983.
3. For the purposes of this chapter, pre-need life insurance is any life insurance policy or
certificate that is issued in combination with, in support of, with an assignment to, or as a
guarantee for a prearrangement agreement for goods and services to be provided at the time
of and immediately following the death of the insured. Goods and services may include
embalming, cremation, body preparation, viewing or visitation, coffin or urn, memorial stone,
and transportation of the deceased. The status of the policy or contract as pre-need life
insurance is determined at the time of issue in accordance with the policy form filing.
History: Effective January 1, 2009.
General Authority: NDCC 28-32-02
Law Implemented: NDCC 26.1-35-02
### § 45-04-07.3-02. Minimum valuation mortality standards.

The minimum mortality standard for pre-need life insurance contracts for determining reserve
liabilities and nonforfeiture values for both male and female insureds shall be the ultimate 1980 CSO.
History: Effective January 1, 2009.
General Authority: NDCC 28-32-02
Law Implemented: NDCC 26.1-35-02
### § 45-04-07.3-03. Minimum valuation interest rate standards.

1. The interest rates used in determining the minimum standard for valuation of pre-need life
insurance shall be the calendar year statutory valuation interest rates as defined in North
Dakota Century Code section 26.1-35-04.

2. The interest rates used in determining the minimum standard for nonforfeiture values for
pre-need life insurance shall be the calendar year statutory nonforfeiture interest rates as
defined in North Dakota Century Code section 26.1-33-27.
History: Effective January 1, 2009.
General Authority: NDCC 28-32-02
Law Implemented: NDCC 26.1-35-02
### § 45-04-07.3-04. Minimum valuation method standards.

1. The method used in determining the standard for the minimum valuation of reserves of
pre-need life insurance shall be the method defined in North Dakota Century Code section
26.1-35-02.
2. The method used in determining the standard for the minimum nonforfeiture values for
pre-need life insurance shall be the method defined in North Dakota Century Code section
26.1-33-27.
History: Effective January 1, 2009.
General Authority: NDCC 28-32-02
Law Implemented: NDCC 26.1-35-02
### § 45-04-07.3-05. Transition rules.

1. For pre-need life insurance policies issued on or after the effective date of this chapter and
before January 1, 2012, the 2001 CSO may be used as the minimum standard for reserves
and minimum standard for nonforfeiture benefits for both male and female insureds.
2. If an insurer elects to use the 2001 CSO as a minimum standard for any policy issued on or
after the effective date of this chapter and before January 1, 2012, the insurer shall provide, as
a part of the actuarial opinion memorandum submitted in support of the company's asset
adequacy testing, an annual written notification to the domiciliary commissioner. The
notification shall include:
a. A complete list of all pre-need life insurance policy forms that use the 2001 CSO as a
minimum standard;
b. A certification signed by the appointed actuary stating that the reserve methodology
employed by the company in determining reserves for the pre-need life insurance
policies issued after the effective date and using the 2001 CSO as a minimum standard,
develops adequate reserves. For the purposes of this certification, the pre-need life
insurance policies using the 2001 CSO as a minimum standard cannot be aggregated
with any other policies; and
c. Supporting information regarding the adequacy of reserves for pre-need life insurance
policies issued after the effective date of this chapter and using the 2001 CSO as a
minimum standard for reserves.
3. Pre-need life insurance policies issued on or after January 1, 2012, must use the ultimate
1980 CSO in the calculation of minimum nonforfeiture values and minimum reserves.
History: Effective January 1, 2009.
General Authority: NDCC 28-32-02
Law Implemented: NDCC 26.1-35-02

### § 45-04-07.3-06. Effective date.

This chapter is applicable to pre-need life insurance policies and certificates and similar contracts
and certificates issued on or after January 1, 2009.
History: Effective January 1, 2009.
General Authority: NDCC 28-32-02
Law Implemented: NDCC 26.1-35-02
