NORTH CAROLINA GENERAL ASSEMBLY
1975 SESSION

CHAPTER 603
HOUSE BILL 814

AN ACT TO AMEND CHAPTER 58, ARTICLE 22, OF THE GENERAL STATUTES RELATING TO RESERVE VALUATION AND NONFORFEITURE BENEFITS OF LIFE INSURANCE POLICIES.

The General Assembly of North Carolina enacts:

Section 1.  Subsection (c) of G.S. 58-201.1, as the same appears in the 1965 Replacement Volume 2B, is hereby amended by rewriting the same to read as follows:
"(c)	(1)	Except as otherwise provided in subdivision (3) of this subsection, the minimum standard for the valuation of all such policies and contracts issued prior to the operative date of G.S. 58-201.2 shall be that provided by the laws in effect immediately prior to such date.
(2)	Except as otherwise provided in subdivision (3) of this subsection, the minimum standards for the valuation of all such policies and contracts issued on or after the operative date of G.S. 58-201.2 shall be the commissioner's reserve valuation method defined in subsection (d), three and one-half percent (3-1/2%) interest, or in the case of policies and contracts, other than annuity and pure endowment contracts, issued on or after July 1, 1975, and prior to January 1, 1986, four percent (4%) interest, and the following tables:
(i)	For all ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in such policies, the commissioner's 1941 Standard Ordinary Mortality Table for such policies issued prior to the operative date of subdivision (e)(2) of G.S. 58-201.2, and the commissioner's 1958 Standard Ordinary Mortality Table for such policies issued on or after such operative date; provided that for any category of such policies issued on female risks all modified net premiums and present values referred to in this section may be calculated according to an age not more than three years younger than the actual age of the insured.
(ii)	For all industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in such policies the 1941 Standard Industrial Mortality Table for such policies issued prior to the operative date of subdivision (e)(3) of G.S. 58-201.2, and the commissioner's 1961 Standard Industrial Mortality Table for such policies issued on or after such operative date.
(iii)	For individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies — the 1937 Standard Annuity Mortality Table or, at the option of the company, the Annuity Mortality Table for 1949, Ultimate, or any modification of either of these tables approved by the commissioner.
(iv)	For group annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies — the Group Annuity Mortality Table for 1951, any modification of such table approved by the commissioner, or, at the option of the company, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts.
(v)	For total and permanent disability benefits in or supplementary to ordinary policies or contracts — for policies or contracts issued on or after January 1, 1966, the tables of Period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 Disability Study of the Society of Actuaries, with due regard to the type of benefit; for policies or contracts issued on or after January 1, 1961, and prior to January 1, 1966, either such tables or, at the option of the company, the Class (3) Disability Table (1926); and for policies issued prior to January 1, 1961, the Class (3) Disability Table (1926). Any such table shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies.
(vi)	For accidental death benefits in or supplementary to policies — for policies issued on or after January 1, 1966, the 1959 Accidental Death Benefits Table; for policies issued on or after January 1, 1961, and prior to January 1, 1966, either such table or, at the option of the company, the Inter-Company Double Indemnity Mortality Table; and for policies issued prior to January 1, 1961, the Inter-Company Double Indemnity Mortality Table. Either table shall be combined with a mortality table permitted for calculating the reserves for life insurance policies.
(vii)	For group life insurance, life insurance issued on the substandard basis and other special benefits, such tables as may be approved by the commissioner.
(3)	The minimum standard for the valuation of all individual annuity and pure endowment contracts issued on or after the operative date of this subdivision (3), as defined herein, and for all annuities and pure endowments purchased on or after such operative date under group annuity and pure endowment contracts, shall be the commissioner's reserve valuation method defined in subsection (d) and the following tables and interest rates:
(i)	For individual annuity and pure endowment contracts issued prior to January 1, 1986, excluding any disability and accidental death benefits in such contracts — the 1971 Individual Annuity Mortality Table, or any modification of this table approved by the commissioner, and six percent (6%) interest for single premium immediate annuity contracts, and four percent (4%) interest for all other individual annuity and pure endowment contracts.
(ii)	For individual annuity and pure endowment contracts issued on or after January 1, 1986, excluding any disability and accidental death benefits in such contracts — the 1971 Individual Annuity Mortality Table, or any modification of this table approved by the commissioner, and three and one-half percent (3-1/2%) interest.
(iii)	For all annuities and pure endowments purchased prior to January 1, 1986, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts — the 1971 Group Annuity Mortality Table, or any modification of this table approved by the commissioner, and six percent (6%) interest.
(iv)	For all annuities and pure endowments purchased on or after January 1, 1986, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts — the 1971 Group Annuity Mortality Table, or any modification of this table approved by the commissioner, and three and one-half percent (3-1/2%) interest.
After July 1, 1975, any company may file with the commissioner a written notice of its election to comply with the provisions of this subdivision (3) after a specified date before January 1, 1979, which shall be the operative date of this subdivision for such company, provided that an insurer may elect a different operative date for individual annuity and pure endowment contracts from that elected for group annuity and pure endowment contracts. If a company makes no such election, the operative date of this subdivision for such company shall be January 1, 1979."
Sec. 2.  Subsection (e) of G.S. 58-201.2, as the same appears in the 1965 Replacement Volume 2B, is amended by striking out the words ", not exceeding three and one-half percent (3-1/2%) per annum," in the fifth and sixth lines of subdivision (2); and by inserting after the word "benefits" and before the comma in line 7 the following: "provided that such rate of interest shall not exceed three and one-half percent (3-1/2%) per annum except that a rate of interest not exceeding four percent (4%) per annum may be used for policies issued on or after July 1, 1975, and prior to January 1, 1986, and".
Sec. 3.  Subsection (e) of G.S. 58-201.2, as the same appears in the 1965 Replacement Volume 2B, is further amended by striking out the words ", not exceeding three and one-half percent (3-1/2%) per annum," in the fifth and sixth lines of subdivision (3); and by inserting after the word "benefits" and before the semicolon in line 7 the following: "provided that such rate of interest shall not exceed three and one-half percent (3-1/2%) per annum except that a rate of interest not exceeding four percent (4%) per annum may be used for policies issued on or after July 1, 1975, and prior to January 1, 1986".
Sec. 4.  All laws and clauses of laws in conflict with this act are hereby repealed.
Sec. 5.  This act shall become effective on July 1, 1975.
In the General Assembly read three times and ratified, this the 16th day of June, 1975.