§764.  Reserves--noncancellable health and accident insurance

A.  The legal minimum standard for computing the active life reserve, including the unearned premium reserve, of noncancellable health and accident policies shall be based on Conference Modification of Class III Disability Experience with interest at not to exceed three and one-half percent per annum on the full preliminary term basis.

B.  For policies with a waiting period of less than three months or providing benefits at ages beyond the limits of Conference Modification of Class III Disability Experience, the tables shall be extended to cover the provisions of such policies on such basis as the commissioner of insurance may approve.

C.  The reserve for losses under noncancellable disability policies shall be based on Conference Modification of Class III Disability Experience, except that for claims of less than twenty-seven months' duration the reserve may be taken as equivalent to the prospective claim payments for three and one-half times the elapsed period of disability; but in no case shall the reserve be less than the equivalent of seven weeks' claim payments.

D.  For a point of service policy,  reserves shall be required for the indemnity exposure only and may be based on an insurer's actual experience or, in the case of an insurer in business for less than five years, may be based on industry standards.

E.  The commissioner of insurance shall modify the application of the tables and requirements prescribed in this Section to policies or to claims arising under policies in accordance with the waiting period contained in such policies and in accordance with any limitation as to the time for which indemnity is payable.

Acts 1958, No. 125; Acts 1999, No. 878, §1, eff. July 2, 1999; Redesignated from R.S. 22:893 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.

NOTE:  Former R.S. 22:764 redesignated as R.S. 22:96 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.