Life Insurance
In the U.S. life insurance industry, statutory reserves are most commonly computed using the Commissioner's reserve valuation method, or CRVM, the method prescribed by law for computing minimum required reserves.
The size of a CRVM reserve is affected by the age and sex of the insured person, how long the policy for which it is computed has been in force, the plan of insurance offered by the policy, the rate of interest used in the calculation, and the mortality table with which the actuarial present values are computed.
The Commissioner's reserve valuation method was itself established by the Standard Valuation Law (SVL), which was created by the NAIC and adopted by the several states shortly after World War II. The first mortality table prescribed by the SVL was the 1941 CSO (Commissioner's Standard Ordinary} table, at a maximum interest rate of 3½%. Subsequent amendments to the Standard Valuation Law have permitted the use of more modern mortality tables and higher rates of interest. The effect of these changes has in general been to reduce the amount of the reserves which life insurance companies are legally required to hold.
Read more about this topic: Statutory Reserve
Famous quotes containing the words life and/or insurance:
“Human life itself may be almost pure chaos, but the work of the artist—the only thing he’s good for—is to take these handfuls of confusion and disparate things, things that seem to be irreconcilable, and put them together in a frame to give them some kind of shape and meaning. Even if it’s only his view of a meaning. That’s what he’s for—to give his view of life.”
—Katherine Anne Porter (1890–1980)
“... business training in early life should not be regarded solely as insurance against destitution in the case of an emergency. For from business experience women can gain, too, knowledge of the world and of human beings, which should be of immeasurable value to their marriage careers. Self-discipline, co-operation, adaptability, efficiency, economic management,—if she learns these in her business life she is liable for many less heartbreaks and disappointments in her married life.”
—Hortense Odlum (1892–?)