Oregon Department of Consumer and Business Services, Insurance Regulation
Reserves for Waiver of Premium
Waiver of premium reserves involves several special considerations. First, the disability valuation tables promulgated by the NAIC are based on exposures that include contracts on premium waiver as in-force contracts. Hence, contract reserves based on these tables are not reserves on active lives but rather are reserves on contracts in force. This is true for the 1964 CDT and for both the 1985 CIDA and CIDB tables.
Reserves using any of the tables described in section (1) of this rule shall value reserves on the following basis:
Claim reserves must include reserves for premiums expected to be waived, valuing as a minimum the valuation net premium being waived;
Premium reserves must include contracts on premium waiver as in-force contracts, valuing as a minimum the unearned modal valuation net premium being waived; and
Contract reserves must include recognition of the waiver of premium benefit in addition to other contract benefits provided for, valuing as a minimum the valuation net premium to be waived.