(a) Except as otherwise provided by Sections 425.065 and 425.068 and subject to Subsection (b), for the life insurance and endowment benefits of a policy that provides for a uniform amount of insurance and that requires the payment of uniform premiums, the reserve according to the commissioners reserve valuation method is the difference, if greater than zero, of the present value on the date of valuation of those future guaranteed benefits, minus the present value on that date of any future modified net premiums for a policy described by this subsection. The modified net premiums for a policy described by this subsection are a uniform percentage of the respective contract premiums for those benefits, so that the present value on the policy’s issue date of all the modified net premiums is equal to the sum of:
(1) the present value on that date of those benefits; and
(2) the difference, if greater than zero, between:
(A) a net level annual premium equal to the present value on the policy’s issue date of the benefits provided for after the first policy year, divided by the present value on the policy’s issue date of an annuity of one per year, payable on the first policy anniversary and on each subsequent policy anniversary on which a premium becomes due; and
(B) a net one-year term premium for the benefits provided for in the first policy year.
(b) A net level annual premium under Subsection (a)(2)(A) may not exceed the net level annual premium on the 19-year premium whole life plan for insurance of the same amount at an age that is one year older than the age on the policy’s issue date.

(c) This subsection applies only to a life insurance policy issued on or after January 1, 1985, for which the contract premium for the first policy year exceeds the contract premium for the second year, for which a comparable additional benefit is not provided in the first year for the excess premium, and that provides an endowment benefit, a cash surrender value, or a combination of an endowment benefit and cash surrender value, in an amount greater than the excess premium. For purposes of this subsection, the “assumed ending date” is the first policy anniversary on which the sum of any endowment benefit and any cash surrender value available on that date is greater than the excess premium. The reserve according to the commissioners reserve valuation method for a policy to which this subsection applies as of any policy anniversary occurring on or before the assumed ending date is, except as otherwise provided by § 425.068, the greater of:
(1) the reserve as of the policy anniversary computed as prescribed by Subsection (a); or
(2) the reserve as of the policy anniversary computed as prescribed by Subsection (a) but with:
(A) the value prescribed by Subsection (a)(2)(A) reduced by 15 percent of the amount of the excess first-year premium;
(B) each present value of a benefit or premium determined without reference to a premium or benefit provided under the policy after the assumed ending date;
(C) the policy assumed to mature on the assumed ending date as an endowment; and
(D) the cash surrender value provided on the assumed ending date considered to be an endowment benefit.
(d) In making the comparison required by Subsection (c), the mortality tables and interest bases described by Sections 425.058, 425.061, 425.062, and 425.063 must be used.
(e) Reserves according to the commissioners reserve valuation method for the following policies, contracts, and benefits must be computed by a method consistent with the principles of this section:
(1) a life insurance policy that provides for a varying amount of insurance or that requires the payment of varying premiums;
(2) a group annuity or pure endowment contract purchased under a retirement or deferred compensation plan established or maintained by an employer, including a partnership or sole proprietorship, by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408, Internal Revenue Code of 1986, and that section’s subsequent amendments;
(3) disability or accidental death benefits in a policy or contract; and
(4) all other benefits, other than life insurance and endowment benefits in a life insurance policy or benefits provided by any other annuity or pure endowment contract.