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Life Health > Health Insurance

How The New CSO Table Came To Be

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The new CSO Table is an extension of the 2001 Valuation Basic Table, developed by the Society of Actuaries, Schaumburg, Ill.

Designed to replace the earlier 1980 CSO Table, the new 2001 Table is based on 1990-to-1995 inter-company experience gathered by the SOA between 1990 and 1995. Other sources were used to supplement scarcity of data at younger and older issue ages.

Mortality was projected to 2001 for improvement, and then graduated for smoothness. The Valuation Basic Table was then loaded to obtain the 2001 CSO Table. The overall load is about 15%.

A total of six sub-tables comprise the Table, and they vary by gender and smoking status (nonsmoker, smoker, and aggregate). The new 2001 Table has a 25-year select period compared to the 10-year select period in the 1980 CSO Table and the 19-year select period created by Triple X. (A select period is the period of years immediately following underwriting, where the insured shows better mortality than an individual of the same age who did not have to prove his good health.)

It is considered by the NAIC as the minimum mortality standard for life insurance valuation purposes.

Dont expect the new tables to accommodate multiple underwriting classes. Like earlier versions, the tables are “one-size-fits-all.”

St?phane Julien

Reproduced from National Underwriter Life & Health/Financial Services Edition, August 26, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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