Common use of Actuarial Methodology Clause in Contracts

Actuarial Methodology. As described below, a model was developed from the in force data as of the Statement Date. Model cells were developed for representative plans, underwriting classes, issue years, issue ages, genders, loan rates and tax qualification status. Minor plans were mapped into major plans with similar characteristics. Policies with certain plan characteristics were also combined in determining model cells in those situations where small in force amounts warranted such consolidation. Model distinctions were maintained where both material differences in policy characteristics and material in force amounts were present. Historical and prospective projections of statutory contribution to surplus were developed employing the respective assumptions as outlined below. Historical surplus contributions were accumulated with interest to the Statement Date and prospective surplus contributions were discounted to the same date as described in Section II. The sum of each model cell's historical and prospective AC as of the Statement Date was divided by the model cell's in force amount as of the Statement Date to calculate that cell's AC factor. The in force amount was either the statutory policy reserve or the face Actuarial Contribution Memorandum Page 16 November 16, 1999 493 amount depending on the plan or rider benefit. Each eligible policy's AC was then determined from its actual in force amount as of the Statement Date and the AC factor for the appropriate model cell. These factors were interpolated and extrapolated (subject to limits, where appropriate, after which the same factor was used without further extrapolation) to establish factors for all existing issue year/issue age combinations.

Actuarial Methodology. As described below, a model was developed from the in force data as of the Statement Date. Model cells were developed for representative plans, underwriting classesclass, issue years, issue ages, genders, issue ages and loan rates and tax qualification statusrates. Minor plans were mapped into major plans with similar characteristics. Policies with certain plan characteristics were also combined in determining model cells in those situations where small in force amounts warranted such consolidation. Model distinctions were maintained where both material differences in policy characteristics and material in force amounts were present. Historical and prospective projections of statutory contribution to surplus were developed employing the respective assumptions as outlined below. Historical surplus contributions were Actuarial Contribution Memorandum Page 12 November 16, 1999 489 accumulated with interest to the Statement Date and prospective surplus contributions were discounted to the same date as described in Section II. The sum of each model cell's historical and prospective AC values as of the Statement Date was divided by the model cell's in force amount as of the Statement Date to calculate that cell's AC factor. Where model cells were differentiated on a finer basis than the differentiation used for dividend determination, model cell calculations were aggregated for the purpose of determining a single AC factor. The in force amount was either the statutory policy reserve or the face Actuarial Contribution Memorandum Page 16 November 16, 1999 493 amount depending on the plan or rider benefitbenefit and issue year. Each eligible policy's AC was then determined from its actual in force amount as of the Statement Date and the AC factor for the appropriate model cell. These factors were interpolated and extrapolated (subject to limits, limits where appropriate, after which the same factor was used without further extrapolation) to establish factors for all existing issue year/issue age combinations.

Actuarial Methodology. As described below, a model was developed from the in force data as of the Statement Date. Model cells were developed for representative plans, underwriting classes, issue years, issue ages, genders, loan rates premium rate blocks and tax qualification dividend paying status. Minor plans were mapped into major plans with similar characteristics. Policies with certain plan characteristics were also combined in determining model cells in those situations where small in force amounts warranted such consolidation. Model distinctions were maintained where both material differences in policy characteristics and material in force amounts were present. Historical and prospective projections of statutory contribution to surplus were developed employing the respective assumptions as outlined below. Historical surplus contributions were accumulated with interest to the Statement Date and prospective surplus contributions were discounted to the same date as described in Section II. The sum of each model cell's historical and prospective AC values as of the Statement Date was divided by the model cell's in force amount as of the Statement Date to calculate that cell's AC factor. Industrial Life model cells were generally not differentiated on a finer basis than the differentiation used for dividend determination. The in force amount was either the statutory policy reserve or the face Actuarial Contribution Memorandum Page 16 November 16, 1999 493 amount depending on the plan or rider benefitliberalization (described below). Each eligible policy's AC was then determined from its actual in force amount as of the Statement Date and the AC factor for the appropriate model cell. These factors were interpolated and extrapolated (subject to limits, where appropriate, after which the same factor was used without further extrapolation) to establish factors for all existing issue year/issue age combinations.its