5 U.S.C. § 8712 — Annual accounting; special contingency reserve
submitted 60 years ago by Pub. L. 89-554 to r/title-5-GOVERNMENT-ORGANIZATION-AND-EMPLOYEES · 284 words · no verdicts yet
Each policy must be financially accounted for within 90 days after each policy year. Excess premiums first form a special reserve, and later amounts must be paid into the Employees’ Life Insurance Fund under the stated conditions.
A policy purchased under this chapter must provide an accounting to the Office of Personnel Management within 90 days after each policy year ends. In the Office-approved form, it must show (1) premiums actually accrued from issue through that year’s end, (2) all mortality and other claim charges incurred during that period, and (3) the insurer’s expense and risk charges. The insurer must hold premiums exceeding the paragraph (2) and (3) total as a special contingency reserve, used only for charges under the policy. The reserve earns interest at a rate the company sets before each policy year and the Office approves as consistent with its rates for similar group-life-insurance funds. When the Office decides the reserve is large enough to protect against unfavorable future charge changes, later excess must be deposited in the Treasury for the Employees’ Life Insurance Fund. When the policy ends, any reserve balance left after all charges must likewise be deposited for the Fund. The company may make that deposit in equal monthly payments over no more than two years.
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—
the amounts of premiums actually accrued under the policy from its date of issue to the end of the policy year;
the total of all mortality and other claim charges incurred for that period; and
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 rates 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.
Source credit: (Pub. L. 89–554, Sept. 6, 1966, 80 Stat. 598; Pub. L. 95–454, title IX, § 906(a)(2), (3), Oct. 13, 1978, 92 Stat. 1224.)
- 1966Enacted · Pub. L. 89-554 · 80 Stat. 598
- 1978Amended · Pub. L. 95-454 · 92 Stat. 1224
A history note hasn’t been published yet. The record shows enactment by Pub. L. 89-554 on 1966-09-06.
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