(a) For statement purposes as defined in Article 10 (commencing with Section 900), for insolvency calculations as defined in Article 13 (commencing with Section 980), and for the valuation of the liabilities of insurers for all other purposes, every admitted insurer shall maintain an active life reserve which shall place a sound value on its liabilities under all disability policies and which shall not be less than the reserve according to the standards set forth in regulations issued by the commissioner and, in no event, less in the aggregate than the pro rata gross unearned premium reserve for the policies. The promulgation of the regulations by the commissioner or any changes or amendments thereof shall be in accordance with the procedure provided in Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. Subdivisions (b), (c), and (d) shall control the amounts of reserves and liabilities, other than for specific claim losses, upon all individual disability policies until the effective date of regulations issued by the commissioner as provided in the next preceding paragraph. The regulations, in lieu of subdivisions (b), (c), and (d), shall control the amounts of the reserves and liabilities during the time the regulations continue in force. In the event the regulations shall cease to be in effect, the reserves and liabilities again shall be controlled by subdivisions (b), (c), and (d) during the time no such regulations shall be in force. (b) Every admitted insurer which issues one or more of the following three types of individual disability policies shall maintain a reserve not less than the minimum reserve required under this subdivision: (1) Policies which are guaranteed renewable for life or to a specified age at guaranteed premium rates. (2) Policies which are guaranteed renewable for life or to a specified age but under which the insurer has reserved the right to change the scale of premiums. (3) Policies, other than those described in paragraph (1) of subdivision (c), in which the insurer has reserved the right to cancel or to refuse renewal for one or more reasons, but has agreed implicitly or explicitly that, prior to a specified time or age, it will not cancel or decline renewal solely because of deterioration of health after issue. During the period within which the renewability of the policy is guaranteed or the insurerâs right to cancel the policy or to refuse renewal thereof is limited, the minimum reserve shall be an amount computed on the basis of two-year preliminary term tabular mean reserves employing the following assumptions: Mortality and Interest: those assumptions specified in Article 3 (commencing with Section 10478) and Article 3a (commencing with Section 10489.1) of Chapter 5 of Part 2 of Division 2, for the determination of minimum policy reserve liabilities for ordinary life insurance. Morbidity or other contingency: any tables adopted by the National Association of Insurance Commissioners, or its successor, that is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for use in valuing individual disability insurance policies, or any modification of these tables approved by the commissioner, or any tables based upon individual insurerâs own experience and approved by the commissioner. For each benefit, each company shall establish reserves that place a sound value on the liabilities for the benefit. These mean reserves shall be diminished or offset by appropriate credit for the valuation net deferred premiums. In no event, however, shall the aggregate reserves for all policies valued on the mean reserve basis, diminished by any credit for deferred premiums, be less than the gross pro rata unearned premiums under the policies. Negative reserves for any benefit may be offset against positive reserves for other benefits in the same individual or family policy, but if all benefits of the
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