<html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><title></title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal { text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.sc05d5d57-dc2e-4a43-8036-00de4d39c051000000 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000002 { color: #0000FF; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } </style></head><body><div><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont">    </span><span class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont">20:06:21:62.  Reserve standards.</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051000000"> </span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">    (1)  When long-term care benefits are provided through the acceleration of benefits under group or individual life policies or riders to such policies, policy reserves for the benefits shall be determined in accordance with accepted actuarial practices. Claim reserves shall also be established in the case when the policy or rider is in claim status.</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051000000"> </span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">    Reserves for policies and riders subject to this section must be based on the multiple decrement model utilizing all relevant decrements except for voluntary termination rates. Single decrement approximations are acceptable if the calculation produces essentially similar reserves, if the reserve is clearly more conservative, or if the reserve is immaterial. The calculations may take into account the reduction in life insurance benefits due to the payment of long-term care benefits. However, in no event may the reserves for the long-term care benefit and the life insurance benefit be less than the reserves for the life insurance benefit assuming no long-term care benefit.</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051000000"> </span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">    In the development and calculation of reserves for policies and riders subject to this section, due regard shall be given to the applicable policy provisions, marketing methods, administrative procedures, and all other considerations which have an impact on projected claim costs, including, but not limited to, the following:</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051000000"> </span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (a)    Definition of insured events;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (b)    Covered long-term care facilities;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (c)    Existence of home convalescence care coverage;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (d)    Definition of facilities;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (e)    Existence or absence of barriers to eligibility;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (f)    Premium waiver provision;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (g)    Renewability;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (h)    Ability to raise premiums;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (i)    Marketing method;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (j)    Underwriting procedures;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (k)    Claims adjustment procedures;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (l)    Waiting period;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (m)    Maximum benefit;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (n)    Availability of eligible facilities;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (o)    Margins in claim costs;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (p)    Optional nature of benefit;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (q)    Delay in eligibility for benefit;</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (r)    Inflation protection provisions; and</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">        (s)    Guaranteed insurability option.</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051000000"> </span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">    Any applicable valuation morbidity table shall be certified as appropriate as a statutory valuation table by a member of the American Academy of Actuaries.</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051000000"> </span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">    (2)  When long-term care benefits are provided other than as in subdivision (1) of this section, reserves shall be determined in accordance with SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-6-75"><span class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000002">58-6-75</span></a><span class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">.</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051000000"> </span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">    </span><span class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont">Source:</span><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001"> 28 SDR 157, effective </span><span class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">May 19, 2002.</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">    </span><span class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont">General Authority:</span><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001"> SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-17B-4"><span class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000002">58-17B-4</span></a><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">, </span><a href="https://sdlegislature.gov/Statutes?Statute=58-26-30"><span class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000002">58-26-30</span></a><span class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">.</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">    </span><span class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont">Law Implemented:</span><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001"> SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-6-75"><span class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000002">58-6-75</span></a><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">, </span><a href="https://sdlegislature.gov/Statutes?Statute=58-26-30"><span class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000002">58-26-30</span></a><span class="sc05d5d57-dc2e-4a43-8036-00de4d39c051DefaultParagraphFont-000001">.</span></p><p dir="ltr" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051Normal"><span xml:space="preserve" class="sc05d5d57-dc2e-4a43-8036-00de4d39c051000000"> </span></p></div></body></html>