J. MILLARD TAWES, Governor                       1185

section shall become operative with respect to the ordinary policies
thereafter issued by such insurer. If an insurer makes no such elec-
tion, the operative date of this subsection for such insurer shall be
January 1, 1966.

(k) In the case of industrial policies issued on or after the opera-
tive date of this subsection as defined herein, all adjusted premiums
and present values referred to in this section shall be calculated on
the basis of the Commissioners 1961 Standard Industrial Mortality
Table and the rate of interest, not exceeding three and one-half per-
cent (31/2%) per annum, specified in the policy for calculating cash
surrender values and paid-up nonforfeiture benefits. Provided, how-
ever, that in calculating the present value of any paid-up term insur-
ance with accompanying pure endowment, if any, offered as a non-
forfeiture benefit, the rates of mortality assumed may be not more
than those shown in the Commissioners 1961 Industrial Extended
Term Insurance Table. Provided, further, that for insurance issued
on a substandard basis, the calculations of any such adjusted pre-
miums and present values may be based on such other table of mor-
tality as may be specified by the insurer and approved by the
Commissioner.

After the effective date of this Act, any insurer may file with the
Commissioner a written notice of its election to comply with the
provisions of this subsection after a specified date before January 1,
1968. After the filing of such notice, then upon such specified date
(which shall be the operative date of this subsection for such
insurer), this subsection shall become operative with respect to the
industrial policies thereafter issued by such insurer. If an insurer
makes no such election, the operative date of this subsection for
such insurer shall be January 1,1968.

(1) Any cash surrender value and any paid-up nonforfeiture
benefit, available under the policy in the event of default in a pre-
mium payment due at any time other than on the policy anniversary,
shall be calculated with allowance for the lapse of time and the pay-
ment of fractional premiums beyond the last preceding policy anni-
versary. All values referred to in subsections (d), (e), (f), (g), (h),
(i), (j), and (k) of this section may be calculated upon the assump-
tion that any death benefit is payable at the end of the policy year of
death. The net value of any paid-up additions, other than paid-up
term additions, shall be not less than the dividends used to provide
such additions. Notwithstanding the provisions of subsection (d) of
this section, additional benefits payable:

(1)   In the event of death by accident or accidental means, or of
dismemberment or loss of sight,

(2)   In the event of total and permanent disability,

(3)   As reversionary annuity or deferred reversionary annuity
benefits,

(4)   As term insurance benefits provided by a rider or supplemen-
tal policy provision to which, if issued as a separate policy, this
section would not apply,

(5)   As term insurance on the life of a child or on the lives of
children provided in a policy on the life of a parent of the child, if
such term insurance expires before the child's age is twenty-six, is