Sec.38a-433-27. Reserve liabilities

Reserve liabilities for Modified Guaranteed Life Insurance Policies shall be established in accordance with actuarial procedures that recognize: (1) that assets of the separate account are based on market value; (2) the variable nature of the benefits provided; and (3) any mortality guarantees.

As a minimum, the separate account liability will equal the surrender value based upon the market value adjustment formula contained in the policy. If that liability is greater than the market value of the assets, a transfer of assets will be made into the separate account so that the market value of the assets at least equals that of the liabilities. Any additional reserve that is needed to cover future guaranteed benefits shall be established.

The market value adjustment formula, the interest guarantees, and the degree to which projected cash flow of assets and liabilities are matched must also be considered. Each year the statement of actuarial opinion accompanying the annual statement shall include an opinion on whether the assets in the separate account are adequate to provide all future guaranteed benefits.

Reserve liabilities for all fixed incidental insurance benefits and any guarantees associated with variable incidental insurance benefits shall be maintained in the general account.

(Effective September 25, 1992)