Okla. Stat. tit. 36, § 36-4029

provisions - Life insurance.

A. Definitions. The term "operative date of the valuation

manual" means the January 1 of the first calendar year that the

valuation manual, as defined in the Section 1510 of this title, is

effective.

B. No policy of life insurance, except as set forth in

subsection M of this section, shall be delivered or issued for

delivery in this state unless it shall contain in substance the

following provisions, or corresponding provisions which are at least

as favorable to the defaulting or surrendering policyholder as are

the minimum requirements hereinafter specified and are essentially

in compliance with subsection L of this section:

1. That in the event of default in any premium payment, after

premiums have been paid for at least three (3) full years, the

insurer will grant, upon proper request not later than sixty (60)

days after the due date of the premium in default, a paid-up

nonforfeiture benefit on a plan stipulated in the policy, effective

as of such due date, of such amount as may be hereinafter specified.

In lieu of such stipulated paid-up nonforfeiture benefit, the

insurer may substitute, upon proper request not later than sixty

(60) days after the due date of the premium in default, an

Oklahoma Statutes - Title 36. Insurance Page 836

actuarially equivalent alternative paid-up nonforfeiture benefit

which provides a greater amount or longer period of death benefits

or, if applicable, a greater amount or earlier payment of endowment

benefits.

2. That upon surrender of the policy within sixty (60) days

after the due date of any premium payment in default after premiums

have been paid for at least three (3) full years in the case of

ordinary insurance, or five (5) full years in the case of industrial

insurance, the insurer will pay, in lieu of any paid-up

nonforfeiture benefit, a cash surrender value of such amount as may

be hereinafter specified.

3. That a specified paid-up nonforfeiture benefit shall become

effective as specified in the policy unless the person entitled to

make such election elects another available option not later than

sixty (60) days after the due date of the premium in default.

4. That if the policy shall have become paid up by completion

of all premium payments, or if it is continued under any paid-up

nonforfeiture benefit which became effective on or after the third

policy anniversary in the case of ordinary insurance, or the fifth

policy anniversary in the case of industrial insurance, the insurer

will pay, upon surrender of the policy within thirty (30) days after

any policy anniversary, a cash surrender value of such amount as may

be hereinafter specified.

5. In the case of policies which cause, on a basis guaranteed

in the policy, unscheduled changes in benefits or premiums, or which

provide an option for changes in benefits or premiums other than a

change to a new policy, a statement of the mortality table, interest

rate and method used in calculating cash surrender values and the

paid-up nonforfeiture benefits available under the policy. In the

case of all other policies, a statement of the mortality table and

interest rate used in calculating the cash surrender values and the

paid-up nonforfeiture benefits available under the policy, together

with a table showing the cash surrender value, if any, and paid-up

nonforfeiture benefit, if any, available under the policy on each

policy anniversary, either during the first twenty (20) policy years

or during the term of the policy, whichever is shorter, such values

and benefits to be calculated upon the assumption that there are no

dividends or paid-up additions credited to the policy and that there

is no indebtedness to the insurer on the policy.

6. An explanation of the manner in which the cash surrender

values and the paid-up nonforfeiture benefits are altered by the

existence of any paid-up additions credited to the policy or any
orter, such values

and benefits to be calculated upon the assumption that there are no

dividends or paid-up additions credited to the policy and that there

is no indebtedness to the insurer on the policy.

6. An explanation of the manner in which the cash surrender

values and the paid-up nonforfeiture benefits are altered by the

existence of any paid-up additions credited to the policy or any

indebtedness to the insurer on the policy; if a detailed statement

of the method of computation of the values and benefits shown in the

policy is not stated therein, a statement that such method of

computation has been filed with the insurance supervisory official

of the state in which the policy is delivered; and a statement of

Oklahoma Statutes - Title 36. Insurance Page 837

the method to be used in calculating the cash surrender value and

paid-up nonforfeiture benefit available under the policy on any

policy anniversary beyond the last anniversary for which such values

and benefits are consecutively shown in the policy.

C. Any of the provisions or portions thereof set forth in

paragraphs 1 through 6 of subsection B of this section which are not

applicable by reason of the plan of insurance may, to the extent

inapplicable, be omitted from the policy. The insurer shall reserve

the right to defer the payment of any cash surrender value for a

period of six (6) months after demand therefor with surrender of the

policy.

D. Cash surrender value: The policy must comply with the

requirements of one of the following paragraphs:

1. Any cash surrender value available under the policy in the

event of default in the premium payment due on any policy

anniversary, whether or not required by subsection B of this

section, shall be at least equal to the reserve on the policy at

date of default and on any paid-up additions thereto, less a sum of

not more than two and one-half percent (2 1/2%) of the amount

insured by the policy and of the paid-up additions thereto, if any,

and less any existing indebtedness to the company on or secured by

the policy; the reserve on such policy to be computed in accordance

with the mortality table and the rate of interest specified in the

policy for the calculation of the cash value and by the net level

premium method of valuation unless a modified net premium method of

valuation be specified in the policy. No cash surrender value shall

be required in policies of term insurance of twenty (20) years or

less.

2. Any cash surrender value available under the policy in the

event of default in the premium payment due on any policy

anniversary, whether or not required by subsection B of this

section, shall be an amount not less than the excess, if any, of the

present value on such anniversary of the future guaranteed benefits

which would have been provided for by the policy, including any

existing paid-up additions if there had been no default over the sum

of (i) the then present value of the adjusted premiums as defined in

subsections G, H and I of this section, corresponding to premiums

which would have fallen due on and after such anniversary, and (ii)

the amount of any indebtedness to the insurer on account of or

secured by the policy.

3. Provided, however, that for any policy issued on or after

the operative date of paragraph 4 of subsection I of this section as

defined therein, which provides supplemental life insurance or

annuity benefits at the option of the insured and for an

identifiable additional premium by rider or supplemental policy

provision, the cash surrender value referred to in paragraph 2 of

this subsection shall be an amount not less than the sum of the cash

Oklahoma Statutes - Title 36. Insurance Page 838

surrender value as defined in such paragraph for an otherwise

similar policy issued at the same age without such rider or

supplemental policy provision and the cash surrender value as
der or supplemental policy

provision, the cash surrender value referred to in paragraph 2 of

this subsection shall be an amount not less than the sum of the cash

Oklahoma Statutes - Title 36. Insurance Page 838

surrender value as defined in such paragraph for an otherwise

similar policy issued at the same age without such rider or

supplemental policy provision and the cash surrender value as

defined in such paragraph for a policy which provides only the

benefits otherwise provided by such rider or supplemental policy

provision.

4. Provided, further, that for any family policy issued on or

after the operative date of paragraph 4 of subsection I of this

section as defined therein, which defines a primary insured and

provides term insurance on the life of the spouse of the primary

insured expiring before the spouse's age seventy-one (71) years, the

cash surrender value referred to in paragraph 2 of this subsection

shall be an amount not less than the sum of the cash surrender value

as defined in such paragraph for an otherwise similar policy issued

at the same age without such term insurance on the life of the

spouse and the cash surrender value as defined in such paragraph for

a policy which provides only the benefits otherwise provided by such

term insurance on the life of the spouse.

5. Any cash surrender value available within thirty (30) days

after any policy anniversary under any policy paid up by completion

of all premium payments, or any policy continued under any paid-up

nonforfeiture benefits, whether or not required by subsection B,

shall be an amount not less than the present value, on such

anniversary, of the future guaranteed benefits provided for by the

policy including any existing paid-up additions, decreased by any

indebtedness to the insurer on account of or secured by the policy.

The method described in paragraphs 2, 3, 4 and 5 of this subsection

may be referred to as the Standard Nonforfeiture Value Method.

E. Notification to policyholder of cash surrender value:

Within three (3) months after default of any premium payment on any

life insurance policy which has a cash surrender value, the insurer

shall notify the policyholder in writing of the cash surrender value

and of the policyholder's options as to the application of the cash

surrender value as provided in the policy.

F. Paid-up nonforfeiture benefits: Any paid-up nonforfeiture

benefit available under the policy in the event of default in the

premium payment due on any policy anniversary shall be such that its

present value as of such anniversary shall be at least equal to the

cash surrender value then provided for by the policy, or, if none is

provided for, that cash surrender value which would have been

required by this section in the absence of the condition that

premiums shall have been paid for at least a specified period.

G. The adjusted premium: This subsection shall not apply to

policies issued on or after the operative date of paragraph 4 of

subsection I of this section as defined therein. Except as provided

in paragraph 2 of subsection H of this section, the adjusted

premiums for any policy shall be calculated on an annual basis and

Oklahoma Statutes - Title 36. Insurance Page 839

shall be such uniform percentage of the respective premiums

specified in the policy for each policy year, excluding extra

premiums on a substandard policy, that the present value, at the

date of issue of the policy, of all such adjusted premiums shall be

equal to the sum of:
d

premiums for any policy shall be calculated on an annual basis and

Oklahoma Statutes - Title 36. Insurance Page 839

shall be such uniform percentage of the respective premiums

specified in the policy for each policy year, excluding extra

premiums on a substandard policy, that the present value, at the

date of issue of the policy, of all such adjusted premiums shall be

equal to the sum of:

(i) the then present value of the future guaranteed

benefits provided for by the policy;

(ii) two percent (2%) of the amount of the insurance if the

insurance be uniform in amount, or of the equivalent

uniform amount, as hereinafter defined, if the amount

of insurance varies with the duration of the policy;

(iii) forty percent (40%) of the adjusted premium for the

first policy year; and

(iv) twenty-five percent (25%) of either the adjusted

premium for the first policy year or the adjusted

premium for a whole life policy of the same uniform or

equivalent uniform amount with uniform premiums for

the whole of life issued at the same age for the same

amount of insurance, whichever is less, provided,

however, that in applying the percentages specified in

clauses (iii) and (iv) above, no adjusted premiums

shall be deemed to exceed four percent (4%) of the

amount of insurance or uniform amount equivalent

thereto.

The date of issue of a policy for the purpose of this section

shall be the date as of which the rated age of the insured is

determined.

H. 1. This subsection shall not apply to policies issued on or

after the operative date of paragraph 4 of subsection I of this

section as defined therein. In the case of a policy providing an

amount of insurance varying with the duration of the policy, the

equivalent uniform amount thereof for the purpose of subsection G of

this section shall be deemed to be the uniform amount of insurance

provided by an otherwise similar policy, containing the same

endowment benefit or benefits, if any, issued at the same age and

for the same term, the amount of which does not vary with duration

and the benefits under which have the same present value at the date

of issue as the benefits under the policy, provided, however, that

in the case of a policy providing a varying amount of insurance

issued on the life of a child under age ten (10) years, the

equivalent uniform amount may be computed as though the amount of

insurance provided by the policy prior to the attainment of age ten

(10) years were the amount provided by such policy at age ten (10)

years.

2. The adjusted premiums for any policy providing term

insurance benefits by rider or supplemental policy provision shall

be equal to (a) the adjusted premiums for an otherwise similar

Oklahoma Statutes - Title 36. Insurance Page 840

policy issued at the same age without such term insurance benefits,

increased, during the period for which premiums for such term

insurance benefits are payable, by (b) the adjusted premiums for

such term insurance, the foregoing items (a) and (b) being

calculated separately and as specified in subsection G of this

section and paragraph 1 of this subsection except that, for the

purposes of clauses (ii), (iii) and (iv) of subsection G of this

section, the amount of insurance or equivalent uniform amount of

insurance used in the calculation of the adjusted premiums referred

to in (b) shall be equal to the excess of the corresponding amount

determined for the entire policy over the amount used in the

calculation of the adjusted premiums in (a).

I. 1. This paragraph shall not apply to policies issued on or

after the operative date of paragraph 4 of this subsection as

defined therein. For policies which comply with the requirements of

paragraph 2 of subsection D of this section and except as otherwise

provided in paragraphs 2 and 3 of this subsection, all adjusted

premiums and present values referred to in this section shall for
(a).

I. 1. This paragraph shall not apply to policies issued on or

after the operative date of paragraph 4 of this subsection as

defined therein. For policies which comply with the requirements of

paragraph 2 of subsection D of this section and except as otherwise

provided in paragraphs 2 and 3 of this subsection, all adjusted

premiums and present values referred to in this section shall for

policies of ordinary insurance be calculated on the basis of the

Commissioners 1941 Standard Ordinary Mortality Table, provided that

for any category of ordinary insurance issued on female risks,

adjusted premiums and present values may be calculated according to

an age not more than three (3) years younger than the actual age of

the insured, and such calculations for all policies of industrial

insurance shall be made on the basis of the 1941 Standard Industrial

Mortality Table. All calculations shall be made on the basis of the

rate of interest, not exceeding three and one-half percent (3 1/2%)

per annum, specified in the policy for calculating cash surrender

values and paid-up nonforfeiture benefits, provided, however, that

in calculating the present value of any paid-up term insurance with

accompanying pure endowment, if any, offered as a nonforfeiture

benefit, the rates of mortality assumed may be not more than one

hundred thirty percent (130%) of the rates of mortality according to

such applicable table, provided further that for insurance issued on

a substandard basis, the calculation of any such adjusted premiums

and present values may be based on such other table of mortality as

may be specified by the insurer and approved by the Insurance

Commissioner.

2. This paragraph shall not apply to ordinary policies issued

on or after the operative date of paragraph 4 of this subsection as

defined therein. In the case of ordinary policies which comply with

the requirements of paragraph 2 of subsection D of this section

issued on or after July 1, 1962, all adjusted premiums and present

values referred to in this section may be calculated on the basis of

the Commissioners 1958 Standard Ordinary Mortality Table and the

rate of interest specified in the policy for calculating cash

surrender values and paid-up nonforfeiture benefits, provided that

Oklahoma Statutes - Title 36. Insurance Page 841

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

April 11, 1974, and prior to March 17, 1978, and rate of interest

not exceeding five and one-half percent (5 1/2%) per annum may be

used for policies issued on or after March 17, 1978, and provided

that for any category of ordinary insurance issued on female risks,

adjusted premiums and present values may be calculated according to

an age not more than six (6) years younger than the actual age of

the insured. Provided, however, that in calculating the present

value of any paid-up term insurance with accompanying pure

endowment, if any, offered as a nonforfeiture benefit, the rates of

mortality assumed may be not more than those shown in the

Commissioners 1958 Extended Term Insurance Table. Provided,

further, that for insurance issued on a substandard basis, the

calculation of any such adjusted premiums and present values may be

based on such other table of mortality as may be specified by the

company and approved by the Commissioner.

3. This paragraph shall not apply to industrial policies issued

on or after the operative date of paragraph 4 of this subsection as

defined therein. In the case of industrial policies, which comply

with the requirements of paragraph 2 of subsection D of this

section, all adjusted premiums and present values referred to in

this section may be calculated on the basis of the Commissioners

1961 Standard Industrial Mortality Table and the rate of interest
ued

on or after the operative date of paragraph 4 of this subsection as

defined therein. In the case of industrial policies, which comply

with the requirements of paragraph 2 of subsection D of this

section, all adjusted premiums and present values referred to in

this section may be calculated on the basis of the Commissioners

1961 Standard Industrial Mortality Table and the rate of interest

specified in the policy for calculating cash surrender values and

paid-up nonforfeiture benefits 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 April 11, 1974,

and prior to March 17, 1978, and a rate of interest not exceeding

five and one-half percent (5 1/2%) per annum may be used for

policies issued on or after March 17, 1978. Provided, however, that

in calculating the present value of any paid-up term insurance with

accompanying pure endowment, if any, offered as a nonforfeiture

benefit, the rates of mortality assumed may be not more than those

shown in the Commissioners 1961 Industrial Extended Term Insurance

Table. Provided, further, that for insurance issued on a

substandard basis, the calculation of any such adjusted premiums and

present values may be based on such other table of mortality as may

be specified by the company and approved by the Commissioner.

4. (a) This paragraph shall apply to all policies issued on

or after the operative date of this paragraph as

defined herein. Except as provided in subparagraph

(g) of this paragraph, the adjusted premiums for any

policy shall be calculated on an annual basis and

shall be such uniform percentage of the respective

Oklahoma Statutes - Title 36. Insurance Page 842

premiums specified in the policy for each policy year,

excluding amounts payable as extra premiums to cover

impairments or special hazards and also excluding any

uniform annual contract charge or policy fee specified

in the policy in a statement of the method to be used

in calculating the cash surrender values and paid-up

nonforfeiture benefits, that the present value, at the

date of issue of the policy, of all adjusted premiums

shall be equal to the sum of (i) the then present

value of the future guaranteed benefits provided for

by the policy; (ii) one percent (1%) of either the

amount of insurance, if the insurance be uniform in

amount, or the average amount of insurance at the

beginning of each of the first ten (10) policy years;

and (iii) one hundred twenty-five percent (125%) of

the nonforfeiture net level premium as hereinafter

defined. Provided, however, that in applying the

percentage specified in (iii) above no nonforfeiture

net level premium shall be deemed to exceed four

percent (4%) of either the amount of insurance, if the

insurance be uniform in amount, or the average amount

of insurance at the beginning of each of the first ten

(10) policy years. The date of issue of a policy for

the purpose of this paragraph shall be the date as of

which the rated age of the insured is determined.

(b) The nonforfeiture net level premium shall be equal to

the present value, at the date of issue of the policy,

of the guaranteed benefits provided for by the policy

divided by the present value, at the date of issue of

the policy, of an annuity of one per annum payable on

the date of issue of the policy and on each

anniversary of such policy on which a premium falls

due.
d is determined.

(b) The nonforfeiture net level premium shall be equal to

the present value, at the date of issue of the policy,

of the guaranteed benefits provided for by the policy

divided by the present value, at the date of issue of

the policy, of an annuity of one per annum payable on

the date of issue of the policy and on each

anniversary of such policy on which a premium falls

due.

(c) In the case of policies which cause on a basis

guaranteed in the policy unscheduled changes in

benefits or premiums, or which provide an option for

changes in benefits or premiums other than a change to

a new policy, the adjusted premiums and present values

shall initially be calculated on the assumption that

future benefits and premiums do not change from those

stipulated at the date of issue of the policy. At the

time of any such change in the benefits or premiums

the future adjusted premiums, nonforfeiture net level

premiums and present values shall be recalculated on

the assumption that future benefits and premiums do

not change from those stipulated by the policy

immediately after the change.

Oklahoma Statutes - Title 36. Insurance Page 843

(d) Except as otherwise provided in subparagraph (g) of

this paragraph, the recalculated future adjusted

premiums for any such policy shall be such uniform

percentage of the respective future premiums specified

in the policy for each policy year, excluding amounts

payable as extra premiums to cover impairments and

special hazards, and also excluding any uniform annual

contract charge or policy fee specified in the policy

in a statement of the method to be used in calculating

the cash surrender values and paid-up nonforfeiture

benefits, that the present value, at the time of

change to the newly defined benefits or premiums, of

all such future adjusted premiums shall be equal to

the excess of

(A) the sum of

(i) the then present value of the then future

guaranteed benefits provided for by the

policy and

(ii) the additional expense allowance, if any,

over

(B) the then cash surrender value, if any, or present

value of any paid-up nonforfeiture benefit under

the policy.

(e) The additional expense allowance, at the time of the

change to the newly defined benefits or premiums,

shall be the sum of

(i) one percent (1%) of the excess, if positive, of

the average amount of insurance at the beginning

of each of the first ten (10) policy years

subsequent to the change over the average amount

of insurance prior to the change at the beginning

of each of the first ten (10) policy years

subsequent to the time of the most recent

previous change, or, if there has been no

previous change, the date of issue of the policy;

and

(ii) one hundred twenty-five percent (125%) of the

increase, if positive, in the nonforfeiture net

level premium.

(f) The recalculated nonforfeiture net level premium shall

be equal to the result obtained by dividing (A) by (B)

where

(A) equals the sum of

(i) the nonforfeiture net level premium

applicable prior to the change times the

present value of an annuity of one per annum

payable on each anniversary of the policy on

Oklahoma Statutes - Title 36. Insurance Page 844

or subsequent to the date of the change on

which a premium would have fallen due had

the change not occurred, and

(ii) the present value of the increase in future

guaranteed benefits provided for by the

policy, and

(B) equals the present value of an annuity of one per

annum payable on each anniversary of the policy

on or subsequent to the date of change on which a

premium falls due.
844

or subsequent to the date of the change on

which a premium would have fallen due had

the change not occurred, and

(ii) the present value of the increase in future

guaranteed benefits provided for by the

policy, and

(B) equals the present value of an annuity of one per

annum payable on each anniversary of the policy

on or subsequent to the date of change on which a

premium falls due.

(g) Notwithstanding any other provisions of this paragraph

to the contrary, in the case of a policy issued on a

substandard basis which provides reduced graded

amounts of insurance so that, in each policy year,

such policy has the same tabular mortality cost as an

otherwise similar policy issued on the standard basis

which provides higher uniform amounts of insurance,

adjusted premiums and present values for such

substandard policy may be calculated as if it were

issued to provide such higher uniform amounts of

insurance on the standard basis.

(h) All adjusted premiums and present values referred to

in this section shall for all policies of ordinary

insurance be calculated on the basis of (i) the

Commissioners 1980 Standard Ordinary Mortality Table

or (ii) at the election of the insurer for any one or

more specified plans of life insurance, the

Commissioners 1980 Standard Ordinary Mortality Table

with Ten-Year Select Mortality Factors; shall for all

policies of industrial insurance be calculated on the

basis of the Commissioners 1961 Standard Industrial

Mortality Table; and shall for all policies issued in

a particular calendar year be calculated on the basis

of a rate of interest not exceeding the nonforfeiture

interest rate as defined in this paragraph for

policies issued in that calendar year. Provided,

however, that:

(i) At the option of the insurer, calculations for

all policies issued in a particular calendar year

may be made on the basis of a rate of interest

not exceeding the nonforfeiture interest rate, as

defined in this paragraph, for policies issued in

the immediately preceding calendar year.

(ii) Under any paid-up nonforfeiture benefit,

including any paid-up dividend additions, any

cash surrender value available, whether or not

required by subsection B of this section, shall

Oklahoma Statutes - Title 36. Insurance Page 845

be calculated on the basis of the mortality table

and rate of interest used in determining the

amount of such paid-up nonforfeiture benefit and

paid-up dividend additions, if any.

(iii) An insurer may calculate the amount of any

guaranteed paid-up nonforfeiture benefit

including any paid-up additions under the policy

on the basis of an interest rate no lower than

that specified in the policy for calculating cash

surrender values.

(iv) In calculating the present value of any paid-up

term insurance with accompanying pure endowment,

if any, offered as a nonforfeiture benefit, the

rates of mortality assumed may be not more than

those shown in the Commissioners 1980 Extended

Term Insurance Table for policies of ordinary

insurance and not more than the Commissioners

1961 Industrial Extended Term Insurance Table for

policies of industrial insurance.
ent value of any paid-up

term insurance with accompanying pure endowment,

if any, offered as a nonforfeiture benefit, the

rates of mortality assumed may be not more than

those shown in the Commissioners 1980 Extended

Term Insurance Table for policies of ordinary

insurance and not more than the Commissioners

1961 Industrial Extended Term Insurance Table for

policies of industrial insurance.

(v) For insurance issued on a substandard basis, the

calculation of any such adjusted premiums and

present values may be based on appropriate

modifications of the aforementioned tables.

(vi) For policies issued prior to the operative date

of the valuation manual, any Commissioners

Standard mortality tables, adopted after 1980 by

the National Association of Insurance

Commissioners, that are approved by regulation

promulgated by the Commissioner for use in

determining the minimum nonforfeiture standard

may be substituted for the Commissioners 1980

Standard Ordinary Mortality Table with or without

Ten-Year Select Mortality Factors or for the

Commissioners 1980 Extended Term Insurance Table.

For policies issued on or after the operative

date of the valuation manual, the valuation

manual shall provide the Commissioners Standard

mortality table for use in determining the

minimum nonforfeiture standard that may be

substituted for the Commissioners 1980 Standard

Ordinary Mortality Table with or without Ten-Year

Select Mortality Factors or for the Commissioners

1980 Extended Term Insurance Table. If the

commissioner approves by rule any Commissioners

Standard mortality table adopted by the National

Association of Insurance Commissioners for use in

determining the minimum nonforfeiture standard

Oklahoma Statutes - Title 36. Insurance Page 846

for policies issued on or after the operative

date of the valuation manual then that minimum

nonforfeiture standard supersedes the minimum

nonforfeiture standard provided by the valuation

manual, and

(vii) For policies issued prior to the operative date

of the valuation manual, any Commissioners

Standard industrial mortality tables, adopted

after 1980 by the National Association of

Insurance Commissioners, that are approved by

regulation promulgated by the Commissioner for

use in determining the minimum nonforfeiture

standard may be substituted for the Commissioners

1961 Standard Industrial Mortality Table or the

Commissioners 1961 Industrial Extended Term

Insurance Table.

For policies issued on or after the operative

date of the valuation manual the valuation manual

shall provide the Commissioner's Standard

mortality table for use in determining the

minimum nonforfeiture standard that may be

substituted for the Commissioners 1961 Standard

Industrial Mortality Table or the Commissioners

1961 Industrial Extended Term Insurance Table.

If the commissioner approves by regulation any

Commissioner's Standard industrial mortality

table adopted by the National Association of

Insurance Commissioners for use in determining

the minimum nonforfeiture standard for policies

issued on or after the operative date of the

valuation manual then that minimum nonforfeiture

standard supersedes the minimum nonforfeiture

standard provided by the valuation manual.

(i) The nonforfeiture interest rate is defined below:
trial mortality

table adopted by the National Association of

Insurance Commissioners for use in determining

the minimum nonforfeiture standard for policies

issued on or after the operative date of the

valuation manual then that minimum nonforfeiture

standard supersedes the minimum nonforfeiture

standard provided by the valuation manual.

(i) The nonforfeiture interest rate is defined below:

(i) For policies issued prior to the operative date

of valuation manual, the nonforfeiture interest

rate per annum for any policy issued in a

particular calendar year shall be equal to one

hundred twenty-five percent (125%) of the

calendar year statutory valuation interest rate

for such policy as defined in the Standard

Valuation Law, rounded to the nearest one-fourth

of one percent (1/4 of 1%); provided, however,

that the nonforfeiture interest rate shall not be

less than four percent (4%), and

(ii) For policies issued on and after the operative

date of the valuation manual the nonforfeiture

Oklahoma Statutes - Title 36. Insurance Page 847

interest rate per annum for any policy issued in

a particular calendar year shall be provided by

the valuation manual.

(j) Notwithstanding any other provision in this code to

the contrary, any refiling of nonforfeiture values or

their methods of computation for any previously

approved policy form which involves only a change in

the interest rate or mortality table used to compute

nonforfeiture values shall not require refiling of any

other provisions of that policy form.

(k) Any insurer may file with the Commissioner a written

notice of its election to comply with the provisions

of this paragraph after a specified date before

January 1, 1989, which specified date shall be the

operative date of this paragraph for such insurer. If

an insurer makes no such election, the operative date

of this paragraph for such insurer shall be January 1,

1989.

J. In the case of any plan of life insurance which provides for

future premium determination, the amounts of which are to be

determined by the insurer based on then estimates of future

experience, or in the case of any plan of life insurance which is of

such a nature that minimum values cannot be determined by the

methods described in subsections B through I of this section:

1. The Commissioner must be satisfied that the benefits

provided under the plan are substantially as favorable to

policyholders and insureds as the minimum benefits otherwise

required by subsections B through I of this section;

2. The Commissioner must be satisfied that the benefits and the

pattern of premiums of that plan are not such as to mislead

prospective policyholders or insureds;

3. The cash surrender values and paid-up nonforfeiture benefits

provided by such plan must not be less than the minimum values and

benefits required for the plan computed by a method consistent with

the principles of this Standard Nonforfeiture Law for Life

Insurance, as determined by regulations promulgated by the

Commissioner.

K. Calculation of Values: Any cash surrender value and any

paid-up nonforfeiture benefit available under the policy in the

event of default in a premium payment due at any time other than on

the policy anniversary shall be calculated with allowance for the

lapse of time and the payment of fractional premiums beyond the last

preceding policy anniversary, except in the case of industrial

insurance proportionate increases in value may be calculated on the

basis of quarter-year payments. All values referred to in

subsections D, F, G, H and I of this section may be calculated upon

the assumption that any death benefit is payable at the end of the

Oklahoma Statutes - Title 36. Insurance Page 848

policy year of death. The net value of any paid-up additions, other

than paid-up term additions, shall be not less than the amounts used

to provide such additions. Notwithstanding the provisions of
ferred to in

subsections D, F, G, H and I of this section may be calculated upon

the assumption that any death benefit is payable at the end of the

Oklahoma Statutes - Title 36. Insurance Page 848

policy year of death. The net value of any paid-up additions, other

than paid-up term additions, shall be not less than the amounts used

to provide such additions. Notwithstanding the provisions of

subsection D of this section, additional benefits payable (1) in the

event of death or dismemberment by accident or accidental means, (2)

in the event of total and permanent disability, (3) as reversionary

annuity or deferred reversionary annuity benefits, (4) as term

insurance benefits provided by a rider or supplemental policy

provision to which, if issued as a separate policy, this section

would not apply, (5) as term insurance on the life of a child or on

the lives of children provided in a policy on the life of a parent

of the child, if such term insurance expires before the child's age

is twenty-six (26) years, is uniform in amount after the child's age

is one (1) year, and has not become paid up by reason of the death

of a parent of the child, and (6) as other policy benefits

additional to life insurance and endorsement benefits, and premiums

for all such additional benefits, shall be disregarded in

ascertaining cash surrender values and nonforfeiture benefits

required by this section, and no such additional benefits shall be

required to be included in any paid-up nonforfeiture benefits.

L. This subsection, in addition to all other applicable

subsections of this section, shall apply to all policies issued on

or after January 1, 1986. Any cash surrender value available under

the policy in the event of default in a premium payment due on any

policy anniversary, shall be in an amount which does not differ by

more than two-tenths of one percent (2/10 of 1%) of either the

amount of insurance, if the insurance be uniform in amount, or the

average amount of insurance at the beginning of each of the first

ten (10) policy years, from the sum of (a) the greater of zero and

the basic cash value hereinafter specified and (b) the present value

of any existing paid-up additions less the amount of any

indebtedness to the insurer under the policy.

The basic cash value shall be equal to the present value, on

such anniversary, of the future guaranteed benefits which would have

been provided for by the policy, excluding any existing paid-up

additions and before deduction of any indebtedness to the insurer,

if there had been no default, less the then present value of the

nonforfeiture factors, as hereinafter defined, corresponding to

premiums which would have fallen due on and after such anniversary.

Provided, however, that the effects on the basic cash value of

supplemental life insurance or annuity benefits or of family

coverage, as described in subsection D or H of this section,

whichever is applicable, shall be the same as are the effects

specified in subsection D or H of this section, whichever is

applicable on the cash surrender values defined in that subsection.

The nonforfeiture factor for each policy year shall be an amount

equal to a percentage of the adjusted premium for the policy year,

Oklahoma Statutes - Title 36. Insurance Page 849

as defined in subsection G or I of this section, whichever is

applicable. Except as is required by the next succeeding sentence

of this paragraph, such percentage:

1. Must be the same percentage for each policy year between the

second policy anniversary and the later of (i) the fifth policy

anniversary and (ii) the first policy anniversary at which there is

available under the policy a cash surrender value in an amount,

before including any paid-up additions and before deducting any

indebtedness, of at least two-tenths of one percent (2/10 of 1%) of

either the amount of insurance, if the insurance be uniform in
the

second policy anniversary and the later of (i) the fifth policy

anniversary and (ii) the first policy anniversary at which there is

available under the policy a cash surrender value in an amount,

before including any paid-up additions and before deducting any

indebtedness, of at least two-tenths of one percent (2/10 of 1%) of

either the amount of insurance, if the insurance be uniform in

amount, or the average amount of insurance at the beginning of each

of the first ten (10) policy years; and

2. Must be such that no percentage after the later of the two

policy anniversaries specified in the preceding paragraph 1 may

apply to fewer than five (5) consecutive policy years.

Provided, that no basic cash value may be less than the value

which would be obtained if the adjusted premiums for the policy, as

defined in subsection G or I of this section, whichever is

applicable, were substituted for the nonforfeiture factors in the

calculation of the basic cash value.

All adjusted premiums and present values referred to in this

section shall for a particular policy be calculated on the same

mortality and interest bases as are used in demonstrating the

policy's compliance with the other subsections of this section. The

cash surrender values referred to in this subsection shall include

any endowment benefits provided for by the policy.

Any cash surrender value available other than in the event of

default in a premium payment due on a policy anniversary, and the

amount of any paid-up nonforfeiture benefit available under the

policy in the event of default in a premium payment shall be

determined in manners consistent with the manners specified for

determining the analogous minimum amounts in subsections B, C, D and

K and paragraph 4 of subsection I of this section. The amounts of

any cash surrender values and of any paid-up nonforfeiture benefits

granted in connection with additional benefits such as those listed

as items (1) through (6) in subsection K of this section shall

conform with the principles of this subsection.

M. 1. This section shall not apply to any of the following:

a. reinsurance,

b. group insurance,

c. pure endowment,

d. annuity or reversionary annuity contract,

e. except as provided in paragraph 1 of subsection D of

this section, term policy of uniform amount, which

provides no guaranteed nonforfeiture or endowment

benefits, or renewal thereof, of twenty (20) years or

less expiring before age seventy-one (71) years, for

Oklahoma Statutes - Title 36. Insurance Page 850

which uniform premiums are payable during the entire

term of the policy,

f. except as provided in paragraph 1 of subsection D of

this section, term policy of decreasing amount which

provides no guaranteed nonforfeiture or endowment

benefits, on which each adjusted premium, calculated

as specified in subsections G, H and I of this

section, is less than the adjusted premium so

calculated on a term policy of uniform amount, or

renewal thereof, which provides no guaranteed

nonforfeiture or endowment benefits, issued at the

same age and for the same initial amount of insurance

for a term defined as follows: For ages at issue

fifty (50) years and under the term shall be twenty

(20) years. Thereafter the term shall decrease one

(1) year for each year of increase in the age at issue

beyond age fifty (50) years; and

g. policy, which provides no guaranteed nonforfeiture or

endowment benefits, for which no cash surrender value,

if any, or present value of any paid-up nonforfeiture

benefit at the beginning of any policy year,

calculated as specified in subsections D, F, G, H and

I of this section, exceeds two and one-half percent (2

1/2%) of the amount of insurance at the beginning of

the same policy year.

2. For purposes of determining the applicability of this act,

the age at expiry for a joint term life insurance policy shall be

the age at expiry of the oldest life.