HB85 Summary

• Establishes Standard Nonforfeiture Law for Life Insurance (Article 3, Chapter 15) requiring minimum cash values and paid-up nonforfeiture benefits for life insurance policies issued after January 1, 1972, with consistent standards across different policy types.

• Creates Standard Valuation Law (Chapter 36A) setting minimum reserve requirements for life insurance companies, replacing outdated valuation methods with modern approaches aligned with National Association of Insurance Commissioners (NAIC) standards.

• Introduces principle-based valuation for certain policies allowing insurers to use their own assumptions and methods while meeting prescribed conservatism levels and incorporating company experience, risk analysis, and financial models.

• Removes exemption for group life insurance from nonforfeiture benefit requirements and provides more appropriate acquisition expense allowances (1-1.25% vs. previous allowances).

• Becomes effective January 1 following passage, with specific operative dates for the valuation manual tied to NAIC adoption by states representing 75% of direct premiums written and at least 42 of 55 jurisdictions.