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U.S. Code as of:
01/03/05
Section 8712. Annual accounting; special contingency reserve
A policy purchased under this chapter shall provide for an
accounting to the Office of Personnel Management not later than 90
days after the end of each policy year. The accounting shall set
forth, in a form approved by the Office -
(1) the amounts of premiums actually accrued under the policy
from its date of issue to the end of the policy year;
(2) the total of all mortality and other claim charges incurred
for that period; and
(3) the amounts of the insurers' expense and risk charges for
that period.
An excess of the total of paragraph (1) of this section over the
sum of paragraphs (2) and (3) of this section shall be held by the
company issuing the policy as a special contingency reserve to be
used by the company only for charges under the policy. The reserve
shall bear interest at a rate determined in advance of each policy
year by the company and approved by the Office as being consistent
with the rate generally used by the company for similar funds held
under other group life insurance policies. When the Office
determines that the special contingency reserve has attained an
amount estimated by it to make satisfactory provision for adverse
fluctuations in future charges under the policy, any further excess
shall be deposited in the Treasury of the United States to the
credit of the Employees' Life Insurance Fund. When a policy is
discontinued, any balance remaining in the special contingency
reserve after all charges have been made shall be deposited in the
Treasury to the credit of the Fund. The company may make the
deposit in equal monthly installments over a period of not more
than 2 years.
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