IRS SUPPLEMENTS INTEREST RATE SCHEDULES USED IN COMPUTING INSURANCE RESERVES.

Rev. Rul. 95-4

For purposes of section 807(d)(4) of the Internal Revenue Code, for taxable years beginning after December 31, 1993, this ruling supplements the schedules of prevailing state assumed interest rates set forth in Rev. Rul. 92-19, 1992-1 C.B. 227. This information is to be used by insurance companies in computing their reserves for (1) life insurance and supplementary total and permanent disability benefits, (2) individual annuities and pure endowments, and (3) group annuities and pure endowments. As section 807(d)(2)(B) requires that the interest rate used to compute these reserves be the greater of (1) the applicable federal interest rate, or (2) the prevailing state assumed interest rate, the table of applicable federal interest rates in Rev. Rul. 92-19 is also supplemented.

Following are supplements to schedules A, B, C, and D to Part III of Rev. Rul. 92-19, providing prevailing state assumed interest rates for insurance products with different features issued in 1994 and 1995, and a supplement to the table in Part IV of Rev. Rul. 92-19, providing the applicable federal interest rate under section 807(d)(4)(A) for 1995. This ruling does not supplement Parts I and II of Rev. Rul. 92-19.

This is the third supplement to the interest rates provided in Rev. Rul. 92-19. Earlier supplements were published in Rev. Rul. 93-58, 1993-2 C.B. 241 (interest rates for insurance products issued in 1992 and 1993) and Rev. Rul. 94-11, 1994-1 C.B. 196 (1993 and 1994).

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Part III. Prevailing State Assumed Interest Rates -- Products Issued in Years After 1982. *

Schedule A

                  STATUTORY VALUATION INTEREST RATES

* The terms used in the schedules in this ruling and in Part III of Rev. Rul. 92-19 are those used in the Standard Valuation Law; the terms are defined in Rev. Rul. 92-19.

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Part III, Schedule B

                 STATUTORY VALUATION INTEREST RATES

      Calendar Year of Issue              Valuation Interest Rate

* The applicable federal interest rates for 1988 and later years must be used in computing reserves under section 807 if they exceed the prevailing state assumed interest rates specified in this schedule. See applicable federal interest rates set forth in Part IV of Rev. Rul. 92-19, as supplemented.

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Part III, Schedule C12 - 1994

                 STATUTORY VALUATION INTEREST RATES

   Cash       Future                           Valuation Interest Rate

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Part III, Schedule D12 - 1994

                 STATUTORY VALUATION INTEREST RATES

   Cash       Future                           Valuation Interest Rate

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Part IV. Applicable Federal Interest Rates.

                               TABLE OF

Rev. Rul. 92-19 is supplemented by the addition to Part III of that ruling of prevailing state assumed interest rates under section 807 for certain insurance products issued in 1994 and 1995 and is further supplemented by an addition to the table in Part IV of Rev. Rul. 92-19 listing applicable federal interest rates. Parts I and II of Rev. Rul. 92-19 are not affected by this ruling.

DRAFTING INFORMATION

The principal author of this revenue ruling is Ann H. Logan of the Office of Assistant Chief Counsel (Financial Institutions and Products). For further information regarding this revenue ruling contact her on (202) 622-3970 (not a toll-free call).