The California Department of Insurance has changed its life reserve calculation rules.

The California department now will “permit the use of mortality tables that reflect differences in mortality between preferred and standard lives in determining minimum reserve liabilities,” California Insurance Commissioner Steve Poizner writes in Bulletin 2009-2.

Through the change, the California department is endorsing use of the 2001 Commissioners Standard Ordinary Preferred Class Structure Mortality Table adopted by the National Association of Insurance Commissioners, Kansas City, Mo., in September 2006.

An insurer that wants to use the preferred table must have an appointed actuary certify that the present value of the insurer’s death benefits should be less than the value that the preferred mortality table would predict, even if actual death rates fail to improve, Poizner writes.

A copy of the bulletin is available here. http://www.insurance.ca.gov