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U.S. Code as of:
01/03/05
Section 8711. Basic tables of premium rates
(a) A policy purchased under this chapter shall include, for the
first policy year, basic tables of premium rates as follows:
(1) For group life insurance, a schedule of basic premium rates
by age which the Office of Personnel Management determines to be
consistent with the lowest schedule of basic premium rates
generally charged for new group life insurance policies issued to
large employers.
(2) For group accidental death and dismemberment insurance, a
basic premium rate which the Office determines is consistent with
the lowest rate generally charged for new group accidental death
and dismemberment policies issued to large employers.
The schedule for group life insurance, except as otherwise provided
by this section, shall be applied to the distribution by age of the
amounts of group life insurance under the policy at its date of
issuance to determine an average basic premium rate per $1,000 of
life insurance.
(b) The policy shall provide that the basic premium rates
determined for the first policy year continue for later policy
years except as readjusted for a later year based on experience
under the policy. The company issuing the policy may make the
readjustment on a basis that the Office determines in advance of
the policy year is consistent with the general practice of life
insurance companies under policies of group life and group
accidental death and dismemberment insurance issued to large
employers.
(c) The policy shall provide that if the Office determines that
ascertaining the actual age distribution of the amounts of group
life insurance in force at the date of issue of the policy or at
the end of the first or any later year of insurance thereunder
would not be possible except at a disproportionately high expense,
the Office may approve the determination of a tentative average
group life premium rate, for the first or any later policy year,
instead of using the actual age distribution. The Office, on
request by the company issuing the policy, shall redetermine the
tentative average premium rate during any policy year, if
experience indicates that the assumptions made in determining that
rate were incorrect for that year.
(d) The policy shall stipulate the maximum expense and risk
charges for the first policy year. The Office shall determine these
charges on a basis consistent with the general level of charges
made by life insurance companies under policies of group life and
accidental death and dismemberment insurance issued to large
employers. The maximum charges continue from year to year, except
that the Office may redetermine them for any year either by
agreement with the company issuing the policy or on written notice
given to the company at least 1 year before the beginning of the
year for which the redetermined maximum charges will be effective.
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