Pennsylvania § 7124 - Minimum standard for accident and health insurance contracts.

§ 7124. Minimum standard for accident and health insurance contracts.

(a) Annual valuation of reserve liabilities.--On an annual basis as of the December 31 of the preceding year, the commissioner shall value or cause to be valued, or require the insurer to value or cause to be valued the reserve liabilities of each company doing business in this Commonwealth, with respect to all the accident and health insurance contracts of the company.

(b) Issuances after operative date of valuation manual.--For accident and health insurance contracts issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual shall be the minimum standard of valuation required under section 7112 (relating to reserve valuation for policies and contracts issued on or after operative date of valuation manual).

(c) Issuances prior to operative date of valuation manual.--For accident and health insurance contracts issued on or after May 17, 1921, and prior to the operative date of the valuation manual, the following shall apply:

(1) The minimum standard of valuation shall be the standard adopted by the commissioner by regulation.

(2) The company shall maintain a claim reserve for incurred but unpaid claims and an active life reserve that shall:

(i) place a sound value on its liabilities under these contracts; and

(ii) be not less than the reserve according to appropriate standards as prescribed by regulation.

(3) The active life reserve shall not be less in the aggregate than the pro rata gross unearned premiums for the contracts.

(d) Foreign or alien insurers.--For a foreign or alien insurer, the commissioner may accept a like valuation of the insurance supervising official of the state, province or foreign country in which that insurer is domiciled, if that valuation is made upon a basis and according to standards producing an aggregate reserve not less than contained in this chapter.

(e) Applicability.--This section shall not apply to total and permanent disability benefits supplementary to life insurance or annuity policies or contracts.

Cross References. Section 7124 is referred to in sections 7103, 7112, 7115, 7118 of this title.