Froogle | Glossary | 'Basic Reserve'

1. reserves that are calculated in accordance with Section 5 of the model NAIC Standard Valuation Law.

2. reserves calculated in accordance with the Standard Valuation Law

fundamentally speaking, the basic reserve (V) is as follows:

V = PV[Benefits] – PV[Premiums]

the basic reserve takes into consideration:

• common actuarial assumptions (eg, mortality; interest; etc.);

• modified net premiums;

• net-level annual premiums;

• 19-year premium whole life plans;

• 1-year age increases;

• endowment benefits;

• cash surrender values; and

• more

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