                                 CODE OF VIRGINIA

SAME; CALCULATION OF ADJUSTED PREMIUMS (§ 38.2-3205)

A. The provisions of this section shall not apply to policies issued on or after
the operative date as defined in &#xA7; 38.2-3209. Except as provided in
subsection C of this section, the adjusted premium for any life insurance policy
issued on or after the operative date stated in &#xA7; 38.2-3214 shall be
calculated on an annual basis and shall be a uniform percentage of the
respective premiums specified in the policy for each policy year, excluding any
extra premiums charged because of impairments or special hazards, so that the
present value at the date of issue of the policy of all adjusted premiums is
equal to the sum of: (i) the then present value of the future guaranteed
benefits provided for by the policy; (ii) two percent of the amount of
insurance, if the insurance is uniform in amount, or of the equivalent uniform
amount as defined in subsection B of this section if the amount of insurance
varies with the duration of the policy; (iii) forty percent of the adjusted
premium for the first policy year; and (iv) twenty-five percent of either the
adjusted premium for the first policy year or the adjusted premium for a whole
life policy of the same uniform or equivalent uniform amount with uniform
premiums for the whole of life issued at the same age for the same amount of
insurance, whichever is less. However, in applying the percentages specified in
(iii) and (iv) of this subsection, no adjusted premium shall be deemed to exceed
four percent of the amount of insurance or level amount equivalent to the amount
of insurance. The date of issue of a policy for the purpose of this section
shall be the date as of which the rated age of the insured is determined.

B. The equivalent uniform amount of a policy providing an amount of insurance
varying with the duration of the policy is the level amount of insurance
provided by an otherwise similar policy, containing the same endowment benefit
or benefits, if any, issued at the same age and for the same term, the amount of
which does not vary with duration and the benefits under which have the same
present value at the date of issue as the benefits under the policy. However,
for a policy providing a varying amount of insurance issued on the life of a
child under age ten, the equivalent uniform amount may be computed as though the
amount of insurance provided by the policy prior to the attainment of age ten
were the amount provided by the policy at age ten.

C. The adjusted premiums for any policy providing term insurance benefits by a
rider or a supplemental policy provision shall equal (i) the adjusted premiums
for an otherwise similar policy issued at the same age without the term
insurance benefits, increased, during the period for which premiums for the term
insurance benefits are payable by (ii) the adjusted premiums for the term
insurance. Items (i) and (ii) of this subsection shall be calculated separately
and as specified in subsections A and B of this section. For the purposes of
items (ii), (iii), and (iv) of subsection A of this section, the amount of
insurance or equivalent uniform amount of insurance used in the calculation of
the adjusted premiums referred to in item (ii) of this subsection shall equal
the excess of the corresponding amount determined for the entire policy over the
amount used in the calculation of the adjusted premiums in item (i) of this
subsection.

HISTORY: Code 1950, § 38-379; 1952, c. 317, § 38.1-464; 1962, c. 562; 1982, c.
228; 1986, c. 562.