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IRS PROVIDES TABLES FOR USE IN COMPUTING LIFE INSURANCE RESERVES.

MAR. 30, 1992

Rev. Rul. 92-19; 1992-1 C.B. 227

DATED MAR. 30, 1992
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Code Sections
  • Subject Areas/Tax Topics
  • Index Terms
    insurance companies, life, reserves
  • Jurisdictions
  • Language
    English
  • Tax Analysts Electronic Citation
    92 TNT 68-23
Citations: Rev. Rul. 92-19; 1992-1 C.B. 227

Supplemented by Rev. Proc. 2018-13; Suplemented by Rev. Rul. 2016-2; Supplemented by Rev. Rul. 2015-2; Supplemented by Rev. Rul. 2012-6; Supplemented by Rev. Rul. 2011-23; Supplemented by Rev. Rul. 2010-7; Supplemented by Rev. Rul. 2009-3; Supplemented by Rev. Rul. 2008-19; Supplemented by Rev. Rul. 2007-10; Supplemented by Rev. Rul. 2006-25; Supplemented by Rev. Rul. 2005-29; Supplemented by Rev. Rul. 2004-14; Supplemented by Rev. Rul. 2003-24; Supplemented by Rev. Rul. 2002-12; Supplemented by Rev. Rul. 2001-38; Supplemented by Rev. Rul. 2000-17; Supplemented by Rev. Rul. 2001-11; Supplemented by Rev. Rul. 99-10; Supplemented by Rev. Rul. 98-2; Supplemented by Rev. Rul. 97-2; Supplemented by Rev. Rul. 96-2; Supplemented by Rev. Rul. 95-4; Supplemented by Rev. Rul. 94-11; Supplemented by Rev. Rul. 93-58

Rev. Rul. 92-19

For purposes of sections 807(d)(4) and 807(d)(5) of the Internal Revenue Code, for taxable years beginning after December 31, 1983, this ruling clarifies and supplements the schedule of prevailing state assumed interest rates and prevailing commissioners' standard tables of mortality and morbidity set forth in Rev. Rul. 87-26, 1987-1 C.B. 158. 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 endowment, and (3) group annuities and pure endowments for taxable years beginning after December 31, 1983. Beginning with policies issued in 1988, 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; accordingly, the applicable federal interest rates for 1988 through 1992 are also indicated in this ruling.

The Service anticipates that the prevailing state assumed interest rates will be updated annually and that the prevailing commissioners' standard tables of mortality and morbidity will be updated as needed.

Following are: (1) Part I, the schedule of prevailing commissioners' standard tables of mortality and morbidity for products issued in years 1948 through 1991, (2) Part II, the schedule of prevailing state assumed interest rates for products issued in years 1946 through 1982, (3) Part III, the schedules (A, B, C1 through C9, and D1 through D9) of prevailing state assumed interest rates for insurance products with different features issued in years 1983 through 1991, 1 and (4) Part IV, a table of the applicable federal interest rates under section 807(d)-(4)(A) for years 1988 through 1992.

1 Schedule A in Part III contains 1992 prevailing state assumed interest rates for life insurance contracts issued in 1992.

                           TABLE OF CONTENTS

 

 

 Part                                                            Page

 

 Part I. Prevailing Commissioners' Standard Tables--

 

   Products Issued in 1948-1991 Inclusive                         228

 

 Part II. Prevailing State Assumed Interest Rates--

 

   Products Issued in 1946-1982 Inclusive                         230

 

 Part III. Prevailing State Assumed Interest Rates--

 

   Products Issued in Years After 1982                            231

 

   Schedule A--1983-1992 Inclusive                                231

 

   Schedule B--1983-1991 Inclusive                                231

 

   Schedule C1--1983                                              232

 

   Schedule C2--1984                                              232

 

   Schedule C3--1985                                              233

 

   Schedule C4--1986                                              233

 

   Schedule C5--1987                                              234

 

   Schedule C6--1988                                              234

 

   Schedule C7--1989                                              235

 

   Schedule C8--1990                                              235

 

   Schedule C9--1991                                              236

 

   Schedule D1--1983                                              236

 

   Schedule D2--1984                                              237

 

   Schedule D3--1985                                              237

 

   Schedule D4--1986                                              237

 

   Schedule D5--1987                                              238

 

   Schedule D6--1988                                              238

 

   Schedule D7--1989                                              239

 

   Schedule D8--1990                                              239

 

   Schedule D9--1991                                              240

 

 Part IV. Applicable Federal Interest Rates--1988-1992 Inclusive  241

 

 

           Part I. Prevailing Commissioners' Standard Tables

 

                Products Issued In 1948-1991 Inclusive

 

 

                              TABLES 1

 

 

                   Life Insurance and         Individual    Group

 

                Supplementary Total and       Annuities   Annuities

 

                 Permanent Disability          and Pure    and Pure

 

                       Benefits               Endowments  Endowments

 

 

 Year 2    Ordinary Contracts   Industrial

 

             Life     Disability   Policies

 

 

 1948       CSO 41      C3DT 26      SI 41       SA 37       SA 37

 

 1949

 

 1950

 

 1951

 

 1952

 

 1953

 

 1954

 

 1955

 

 1956

 

 1957

 

 1958

 

 1959

 

 1960      CSO 58(a)

 

 1961

 

 1962                   P2DS 52                   A 49       GA 51

 

 1963                                CSI 61

 

 1964

 

 1965

 

 1966

 

 1967

 

 1968

 

 1969

 

 1970

 

 1971

 

 1972

 

 1973

 

 1974                                            IA 71       GA 71

 

 1975

 

 1976

 

 1977

 

 1978

 

 1979      CSO 58(b)

 

 1980

 

 1981

 

 1982       CSO 80

 

 1983

 

 1984

 

 1985                                           83 "a"      83 GAM

 

 1986        *** 3

 

 1987

 

 1988

 

 1989

 

 1990

 

 1991

 

 

     NOTES TO PART I, SCHEDULE OF PREVAILING COMMISSIONERS' TABLES

 

 

 1 Stated in the schedule is the most recent mortality table

 

     permitted as of January 1 of the year for valuation of policies of

 

     the specified type issued in that year under the valuation laws of

 

     at least 26 states. For policies issued prior to 1948, the

 

     mortality and morbidity table used in computing statutory reserves

 

     is to be used.

 

 

 The abbreviations used stand for the following mortality tables:

 

 

      CSO 41:  Commissioners' 1941 Standard Ordinary Mortality Table.

 

 

   CSO 58(a):  Commissioners' 1958 Standard Ordinary Mortality Table.

 

               For policies issued during the years specified in the

 

               schedule, female mortality rates under the CSO 58 Table

 

               are equal to those for males 3 years younger, with sex-

 

               distinct rates for ages below 15.

 

 

   CSO 58(b):  Commissioners' 1958 Standard Ordinary Mortality Table.

 

               For policies issued during the years specified in the

 

               schedule, female mortality rates under the CSO 58 Table

 

               are equal to those for males 6 years younger, with sex-

 

               distinct rates for ages below 20.

 

 

      CSO 80:  Commissioners' 1980 Standard Ordinary Mortality Table.

 

               In accordance with section 807(d)(5)(E), for purposes

 

               of section 807(d)(5), the commissioners' standard table

 

               is the male or female table, as appropriate, without

 

               select factors.

 

 

 CSO 80 S/NS:  Commissioners' 1980 Standard Ordinary Smokers and

 

               Nonsmokers Mortality Table. (See also note 3.)

 

               Developed from a separation of the mortality data of

 

               the CSO 80 Table into smoker and nonsmoker categories.

 

               Permitted to be used on an optional basis for policies

 

               which have separate rates for smokers and nonsmokers

 

               and nonforfeiture benefits satisfying minimum standards

 

               based on the CSO 80 S/NS Tables. The CSO 80 S/NS and

 

               the CSO 80 Tables give results that are approximately

 

               equivalent for such policies. Therefore, rates obtained

 

               from either table are acceptable for use under section

 

               807(d)(5) for such policies. However, the same table

 

               must be used for all policies issued under the same

 

               plan of insurance.

 

 

     C3DT 26:  Class (3) Disability Table (1926).

 

 

     P2DS 52:  The tables of Period 2 disablement rates and the 1930

 

               to 1950 termination rates of the 1952 Disability Study

 

               of the Society of Actuaries.

 

 

       SI 41:  1941 Standard Industrial Mortality Table.

 

 

      CSI 61:  Commissioners' 1961 Standard Industrial Mortality

 

               Table.

 

 

       SA 37:  The Standard Annuity Mortality Table.

 

               The SA 37 Table is a sex-distinct table where female

 

               mortality rates are equal to those for males five years

 

               younger.

 

 

        A 49:  Annuity Mortality Table for 1949 Ultimate.

 

               The A 49 Table is a sex-distinct table.

 

 

       IA 71:  1971 Individual Annuity Mortality Table.

 

               The IA 71 Table is a sex-distinct table.

 

 

       GA 51:  Group Annuity Mortality Table for 1951.

 

               The GA 51 Table is a sex-distinct table. The

 

               distinction by sex is made either through separate male

 

               and female tables or by use of the assumption that

 

               female mortality rates are equal to those for males

 

               five years younger. This assumption gives results

 

               approximately equivalent to those of using the separate

 

               female rates. Therefore, rates obtained by either

 

               method are acceptable for use under section 807(d)(5).

 

 

       GA 71:  1971 Group Annuity Mortality Table.

 

               The GA 71 Table is a sex-distinct table. The

 

               distinction by sex is made either through separate male

 

               and female tables or by use of the assumption that

 

               female mortality rates are equal to those for males six

 

               years younger. This assumption gives results

 

               approximately equivalent to those of using the separate

 

               female rates. Therefore, rates obtained by either

 

               method are acceptable for use under section 807(d)(5).

 

 

      83 "a":  1983 Table "a".

 

               The 83 "a" is an individual annuity mortality table and

 

               is a sex-distinct table.

 

 

      83 GAM:  1983 Group Annuity Mortality Table.

 

               The 83 GAM is a sex-distinct table. The distinction by

 

               sex is made either through separate male and female

 

               tables or by use of the assumption that female

 

               mortality rates are equal to those for males six years

 

               younger. This assumption gives results approximately

 

               equivalent to those of using the separate female rates.

 

               Therefore, rates obtained by either method are

 

               acceptable for use under section 807(d)(5).

 

 

2 The year indicated is the first year the table may be used for

 

    federal income tax purposes. Pursuant to section 807(d)(5)(A), the

 

    table specified may be used as the prevailing table from the

 

    beginning of the calendar year in which the table becomes

 

    prevailing. Also, section 807(d)(5)(B) permits the use of the

 

    former table as the prevailing table for that calendar year and

 

    three subsequent years. See Rev. Rul. 87-26.

 

 

3 In 1986 the Commissioners' 1980 Standard Ordinary Smokers and

 

    Nonsmokers Mortality Table (CSO 80 S/NS) became a prevailing

 

    commissioners' standard table for certain policies that

 

    distinguish between smokers and nonsmokers. See description of CSO

 

    80 S/NS in note 1 above.

 

 

           Part II. Prevailing State Assumed Interest Rates

 

              Products Issued in 1946-1982 Inclusive 1

 

 

                          INTEREST RATES 2

 

 

          Life Insurance

 

               and

 

          Supplementary             Individual               Group

 

              Total                 Annuities              Annuities

 

          and Permanent              and Pure               and Pure

 

            Disability              Endowments             Endowments

 

             Benefits

 

                             Single Premium        All

 

 Year 3                 Immediate   Deferred    Other

 

 1946 4       3.5         3.5         3.5        3.5        3.5

 

 1947

 

 1948

 

 1949

 

 1950

 

 1951

 

 1952

 

 1953

 

 1954

 

 1955

 

 1956

 

 1957

 

 1958

 

 1959

 

 1960

 

 1961

 

 1962

 

 1963

 

 1964

 

 1965

 

 1966

 

 1967

 

 1968

 

 1969

 

 1970

 

 1971

 

 1972

 

 1973

 

 1974

 

 1975           4.0         6.0         4.0        4.0        6.0

 

 1976

 

 1977

 

 1978

 

 1979

 

 1980           4.5         7.5         5.5        4.5        7.5

 

 1981

 

 1982           *** 5

 

 

                     NOTES TO PART II, SCHEDULE OF

 

                PREVAILING STATE ASSUMED INTEREST RATES

 

 

 1 Under the 1980 Amendments to the NAIC Standard Valuation Law, for

 

     products issued in years after 1982, prevailing state assumed

 

     interest rates vary by product feature as indicated in Schedules

 

     A, B, C1 through C9, and D1 through D9 in Part III of this ruling.

 

 

 2 The schedule indicates the highest prevailing state assumed

 

     interest rate permitted as of January 1 of the year for valuation

 

     of policies of the specified type issued in that year, under the

 

     valuation laws of at least 26 states.

 

 

     Prior to 1988, pursuant to section 807(d)(4)(A) as then in effect,

 

     there was no prevailing state assumed interest rates for

 

     non-cancellable accident and health insurance policies. Therefore,

 

     in accordance with section 807(d)(4)(D), as then in effect,

 

     prevailing state assumed interest rates to be used in calculating

 

     non-cancellable accident and health insurance reserves were those

 

     applicable to whole life insurance policies.

 

 

     The rates indicated for life insurance are the prevailing state

 

     assumed interest rates for all life insurance, including ordinary,

 

     industrial, group, and credit policies.

 

 

 3 The year indicated is the first year the respective interest rate

 

     may be used for federal income tax purposes.

 

 

 4 For policies issued prior to 1946, the prevailing state assumed

 

     interest rate is 4 percent.

 

 

 5 For 1982 only, 5.5 percent is the prevailing state assumed

 

     interest rate for single premium life insurance.

 

 

          Part III. Prevailing State Assumed Interest Rates--

 

               Products Issued in Years After 1982. /*/

 

 

            Part III, Schedule A--1983-1992 Inclusive /**/

 

 

         STATUTORY VALUATION INTEREST RATES BASED ON THE 1980

 

             AMENDMENTS TO THE NAIC STANDARD VALUATION LAW

 

 

 A. Life insurance 1 valuation:

 

 

 Guarantee Duration

 

      (years)                   Calendar Year of Issue

 

                     1983 2  1984 2  1985 2  1986 2  1987 2

 

 

   10 or fewer       7.25      7.25      7.25      7.25      6.50

 

 

   More than 10 but

 

    not more than 20 6.75      6.75      6.75      6.75      6.00

 

 

   More than 20      6.00      6.00      6.00      6.00      5.50

 

 

 Guarantee Duration

 

      (years)                   Calendar Year of Issue

 

                     1988 3  1989 3  1990 3  1991 3  1992 3

 

 

   10 or fewer       6.00      6.00      6.00      6.00      6.00

 

 

   More than 10 but

 

    not more than 20 6.00      6.00      6.00      6.00      6.00

 

 

   More than 20      5.50      5.50      5.50      5.50      5.50

 

 

 Source: (1) Rates for 1983 from National Association of Insurance

 

             Commissioners ("NAIC"), NAIC Proceedings, 1983 Vol. I, at

 

             353ff.

 

 

         (2) Rates for 1984 and later years calculated from the

 

             monthly averages, ending June 30 of the preceding year,

 

             of Moody's Corporate Bond Yield Average--Monthly Average

 

             Corporates.

 

 

 /*/ The terms used in the schedules in Part III of this ruling are

 

     those used in the Standard Valuation Law and are defined at the

 

     conclusion of Part III. All changes from the precise wording of

 

     that law have been made only for clarity and are not intended to

 

     have substantive effect.

 

 

 /**/ These are the only products in Part III for which 1992 prevailing

 

      state assumed interest rates are provided.

 

 

                     NOTES TO PART III, SCHEDULE A

 

 

 1 Prior to 1988, pursuant to section 807(d)(4)(A) as then in effect,

 

     there were no prevailing state assumed interest rates for

 

     non-cancellable accident and health insurance policies. Therefore,

 

     in accordance with section 807(d)(4)(D), as then in effect,

 

     prevailing state assumed interest rates used in calculating

 

     non-cancellable accident and health insurance reserves are those

 

     applicable to whole life policies.

 

 

 2 Prior to 1988, pursuant to section 807(d)(4)(C) as then in effect,

 

     the issuer of a nonannuity contract could elect to determine the

 

     prevailing state assumed rate of interest as of the beginning of

 

     the calendar year preceding the calendar year in which the

 

     contract was issued.

 

 

 3 Beginning in 1988, pursuant to section 807(d)(2)(B), the interest

 

     rate used in computing reserves is the greater of (1) the

 

     applicable federal interest rate, or (2) the prevailing state

 

     assumed interest rate. As the applicable federal interest rates

 

     for 1988 through 1992 exceed the prevailing state assumed interest

 

     rates for those years as shown in this schedule, the interest

 

     rates to be used for this product for section 807 purposes are the

 

     applicable federal interest rates shown in the table in Part IV of

 

     this ruling. Note, however, that section 807(d)(4)(A)(ii) permits

 

     an election to recompute the applicable federal interest rate if

 

     certain conditions are satisfied.

 

 

               Part III, Schedule B--1983-1991 Inclusive

 

 

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

               VALUATION LAW FOR CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 B. Single premium immediate annuities and annuity benefits involving

 

 life contingencies arising from other annuities with cash settlement

 

 options and from guaranteed interest contracts with cash settlement

 

 options:

 

 

      Calendar Year of Issue                 Valuation Interest Rate

 

              1983                                    11.25

 

              1984                                    11.25

 

              1985                                    11.00

 

              1986                                     9.25

 

              1987                                     8.00

 

              1988                                     8.75 /*/

 

              1989                                     8.75 /*/

 

              1990                                     8.25 /*/

 

              1991                                     8.25 /*/

 

 

 /*/ 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 this ruling.

 

 

                      Part III, Schedule C1--1983

 

 

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1983 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 C. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are valued on an issue year basis:

 

 

    Cash       Future                         Valuation Interest Rate

 

 Settlement   Interest   Guarantee Duration        For Plan Type

 

  Options?   Guarantee?       (years)           A        B        C

 

 

     Yes         Yes     5 or fewer          11.25      9.25     8.25

 

                         More than 5, but    10.75      9.25     8.25

 

                         not more than 10

 

                         More than 10, but    8.25      7.00     6.75

 

                         not more than 20

 

                         More than 20         6.75      5.75     5.75

 

 

     Yes         No      5 or fewer          11.75      9.75     8.75

 

                         More than 5, but    11.25      9.75     8.75

 

                         not more than 10

 

                         More than 10, but    8.75      7.50     7.00

 

                         not more than 20

 

                         More than 20         7.00      6.25     6.25

 

 

     No      Yes or No   5 or fewer          11.25

 

                         More than 5, but    10.75     NOT APPLICABLE

 

                         not more than 10

 

                         More than 10, but    9.75

 

                         not more than 20

 

                         More than 20         7.75

 

 

 Source: Rates for 1983 calculated from the monthly averages ending

 

 June 30, 1983, of Moody's Corporate Bond Yield Average--Monthly

 

 Average Corporates.

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

                      Part III, Schedule C2--1984

 

 

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1984 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 C. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are valued on an issue year basis:

 

 

    Cash       Future                         Valuation Interest Rate

 

 Settlement   Interest   Guarantee Duration        For Plan Type

 

  Options?   Guarantee?       (years)           A        B        C

 

 

     Yes         Yes     5 or fewer          11.25      9.25     8.00

 

                         More than 5, but    10.75      9.25     8.00

 

                         not more than 10

 

                         More than 10, but    8.25      7.00     6.75

 

                         not more than 20

 

                         More than 20         6.75      5.75     5.75

 

 

     Yes         No      5 or fewer          11.75      9.75     8.50

 

                         More than 5, but    11.25      9.75     8.50

 

                         not more than 10

 

                         More than 10, but    8.75      7.50     7.00

 

                         not more than 20

 

                         More than 20         7.00      6.25     6.25

 

 

     No      Yes or No   5 or fewer          11.25

 

                         More than 5, but    10.75     NOT APPLICABLE

 

                         not more than 10

 

                         More than 10, but    9.75

 

                         not more than 20

 

                         More than 20         7.50

 

 

 Source: Rates for 1984 calculated from the monthly averages ending

 

 June 30, 1984, of Moody's Corporate Bond Yield Average--Monthly

 

 Average Corporates.

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

                      Part III, Schedule C3--1985

 

 

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1985 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 C. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are valued on an issue year basis:

 

 

    Cash       Future                         Valuation Interest Rate

 

 Settlement   Interest   Guarantee Duration        For Plan Type

 

  Options?   Guarantee?       (years)           A        B        C

 

 

     Yes         Yes     5 or fewer          11.00      9.00     8.00

 

                         More than 5, but    10.50      9.00     8.00

 

                         not more than 10

 

                         More than 10, but    8.25      7.00     6.50

 

                         not more than 20

 

                         More than 20         6.50      5.75     5.75

 

 

     Yes         No      5 or fewer          11.50      9.50     8.50

 

                         More than 5, but    11.00      9.50     8.50

 

                         not more than 10

 

                         More than 10, but    8.50      7.50     7.00

 

                         not more than 20

 

                         More than 20         7.00      6.25     6.25

 

 

     No      Yes or No   5 or fewer          11.00

 

                         More than 5, but    10.50     NOT APPLICABLE

 

                         not more than 10

 

                         More than 10, but    9.50

 

                         not more than 20

 

                         More than 20         7.50

 

 

 Source: Rates for 1985 calculated from the monthly averages ending

 

 June 30, 1985, of Moody's Corporate Bond Yield Average--Monthly

 

 Average Corporates.

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

                      Part III, Schedule C4--1986

 

 

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1986 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 C. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are valued on an issue year basis:

 

 

    Cash       Future                         Valuation Interest Rate

 

 Settlement   Interest   Guarantee Duration        For Plan Type

 

  Options?   Guarantee?       (years)           A        B        C

 

 

     Yes         Yes     5 or fewer           9.25      7.75     6.75

 

                         More than 5, but     8.75      7.75     6.75

 

                         not more than 10

 

                         More than 10, but    7.50      6.50     6.00

 

                         not more than 20

 

                         More than 20         6.00      5.50     5.50

 

 

     Yes         No      5 or fewer           9.50      8.00     7.25

 

                         More than 5, but     9.25      8.00     7.25

 

                         not more than 10

 

                         More than 10, but    7.75      6.75     6.50

 

                         not more than 20

 

                         More than 20         6.50      5.75     5.75

 

 

     No      Yes or No   5 or fewer           9.25

 

                         More than 5, but     8.75     NOT APPLICABLE

 

                         not more than 10

 

                         More than 10, but    8.00

 

                         not more than 20

 

                         More than 20         6.50

 

 

 Source: Rates for 1986 calculated from the monthly averages ending

 

 June 30, 1986, of Moody's Corporate Bond Yield Average--Monthly

 

 Average Corporates.

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

                      Part III, Schedule C5--1987

 

 

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1987 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 C. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are valued on an issue year basis:

 

 

    Cash       Future                         Valuation Interest Rate

 

 Settlement   Interest   Guarantee Duration        For Plan Type

 

  Options?   Guarantee?       (years)           A        B        C

 

 

     Yes         Yes     5 or fewer           8.00      6.75     6.25

 

                         More than 5, but     7.75      6.75     6.25

 

                         not more than 10

 

                         More than 10, but    7.00      6.00     5.75

 

                         not more than 20

 

                         More than 20         5.75      5.25     5.25

 

 

     Yes         No      5 or fewer           8.50      7.25     6.50

 

                         More than 5, but     8.00      7.25     6.50

 

                         not more than 10

 

                         More than 10, but    7.25      6.50     6.00

 

                         not more than 20

 

                         More than 20         6.00      5.50     5.50

 

 

     No      Yes or No   5 or fewer           8.00

 

                         More than 5, but     7.75     NOT APPLICABLE

 

                         not more than 10

 

                         More than 10, but    7.25

 

                         not more than 20

 

                         More than 20         6.00

 

 

 Source: Rates for 1987 calculated from the monthly averages ending

 

 June 30, 1987, of Moody's Corporate Bond Yield Average--Monthly

 

 Average Corporates.

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

                      Part III, Schedule C6--1988

 

 

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1988 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 C. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are valued on an issue year basis:

 

 

    Cash      Future                         Valuation Interest Rate

 

 Settlement  Interest  Guarantee Duration         For Plan Type

 

  Options?  Guarantee?      (years)            A        B        C

 

 

    Yes         Yes    5 or fewer           8.75     7.50 /*/ 6.75 /*/

 

                       More than 5, but     8.50     7.50 /*/ 6.75 /*/

 

                       not more than 10

 

                       More than 10, but    7.25 /*/ 6.25 /*/ 6.00 /*/

 

                       not more than 20

 

                       More than 20         6.00 /*/ 5.25 /*/ 5.25 /*/

 

 

    Yes         No     5 or fewer           9.25     7.75 /*/ 7.00 /*/

 

                       More than 5, but     8.75     7.75 /*/ 7.00 /*/

 

                       not more than 10

 

                       More than 10, but    7.50 /*/ 6.50 /*/ 6.25 /*/

 

                       not more than 20

 

                       More than 20         6.25 /*/ 5.75 /*/ 5.75 /*/

 

 

    No      Yes or No  5 or fewer           8.75

 

                       More than 5, but     8.50      NOT APPLICABLE

 

                       not more than 10

 

                       More than 10, but    7.75 /*/

 

                       not more than 20

 

                       More than 20         6.25 /*/

 

 

 Source: Rates for 1988 calculated from the monthly averages ending

 

 June 30, 1988, of Moody's Corporate Bond Yield Average--Monthly

 

 Average Corporates.

 

 

 /*/ As the applicable federal interest rate for 1988 of 7.77 percent

 

 exceeds this prevailing state assumed interest rate, the interest

 

 rate to be used for this product under section 807 is 7.77 percent.

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

                      Part III, Schedule C7--1989

 

 

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1989 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 C. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are valued on an issue year basis:

 

 

   Cash       Future                          Valuation Interest

 

 Settlement  Interest    Guarantee                 Rate

 

 Options?   Guarantee?   Duration              For Plan Type

 

                          (years)            A         B         C

 

 

    Yes          Yes     5 or fewer       8.75      7.25 /*/  6.50 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10          8.25      7.25 /*/  6.50 /*/

 

 

                         More than 10,

 

                         but not more

 

                         than 20          7.25 /*/  6.25 /*/  6.00 /*/

 

                         More than 20     6.00 /*/  5.25 /*/  5.25 /*/

 

 

    Yes          No      5 or fewer       9.00      7.50 /*/  7.00 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10          8.75      7.50 /*/  7.00 /*/

 

                         More than 10,

 

                         but not more

 

                         than 20          7.50 /*/  6.50 /*/  6.25 /*/

 

                         More than 20     6.25 /*/  5.50 /*/  5.50 /*/

 

 

    No        Yes or No  5 or fewer       8.75

 

                         More than 5,

 

                         but not more

 

                         than 10          8.25       NOT APPLICABLE

 

                         More than 10,

 

                         but not more

 

                         than 20          7.50 /*/

 

                         More than 20     6.25 /*/

 

 

 Source: Rates for 1989 calculated from the monthly averages ending

 

 June 30, 1989, of Moody's Corporate Bond Yield Average--Monthly

 

 Average Corporates.

 

 

 /*/ As the applicable federal interest rate for 1989 of 8.16 percent

 

 exceeds this prevailing state assumed interest rate, the interest

 

 rate to be used for this product under section 807 is 8.16 percent.

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

                      Part III, Schedule C8--1990

 

 

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1990 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 C. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are valued on an issue year basis:

 

 

   Cash       Future                          Valuation Interest

 

 Settlement  Interest    Guarantee                 Rate

 

 Options?   Guarantee?   Duration              For Plan Type

 

                          (years)            A         B         C

 

 

    Yes        Yes       5 or fewer       8.25 /*/  7.00 /*/  6.25 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10          8.00 /*/  7.00 /*/  6.25 /*/

 

                         More than 10,

 

                         but not more

 

                         than 20          7.00 /*/  6.25 /*/  5.75 /*/

 

                         More than 20     5.75 /*/  5.25 /*/  5.25 /*/

 

 

    Yes        No        5 or fewer       8.50      7.25 /*/  6.50 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10          8.25 /*/  7.25 /*/  6.50 /*/

 

                         More than 10,

 

                         but not more

 

                         than 20          7.50 /*/  6.50 /*/  6.25 /*/

 

                         More than 20     6.25 /*/  5.50 /*/  5.50 /*/

 

 

    No      Yes or No    5 or fewer       8.25 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10          8.00 /*/     NOT APPLICABLE

 

                         More than 10,

 

                         but not more

 

                         than 20          7.25 /*/

 

                         More than 20     6.00 /*/

 

 

 Source: Rates for 1990 calculated from the monthly averages ending

 

 June 30, 1990, of Moody's Corporate Bond Yield Average--Monthly

 

 Average Corporates.

 

 

 /*/ As the applicable federal interest rate for 1990 of 8.37 percent

 

 exceeds this prevailing state assumed interest rate, the interest

 

 rate to be used for this product under section 807 is 8.37 percent.

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

Part III, Schedule C9--1991

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1991 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 C. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are valued on an issue year basis:

 

 

   Cash       Future                          Valuation Interest

 

 Settlement  Interest    Guarantee                 Rate

 

 Options?   Guarantee?   Duration              For Plan Type

 

                          (years)            A         B         C

 

 

   Yes        Yes        5 or fewer       8.25 /*/  7.00 /*/  6.25 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10          8.00 /*/  7.00 /*/  6.25 /*/

 

                         More than 10,

 

                         but not more

 

                         than 20          7.00 /*/  6.25 /*/  5.75 /*/

 

                         More than 20     5.75 /*/  5.25 /*/  5.25 /*/

 

 

    Yes       No         5 or fewer       8.75      7.25 /*/  6.75 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10          8.25 /*/  7.25 /*/  6.75 /*/

 

                         More than 10,

 

                         but not more

 

                         than 20          7.50 /*/  6.50 /*/  6.25 /*/

 

                         More than 20     6.25 /*/  5.50 /*/  5.50 /*/

 

 

    No     Yes or No     5 or fewer       8.25 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10          8.00 /*/     NOT APPLICABLE

 

                         More than 10,

 

                         but not more

 

                         than 20          7.25 /*/

 

                         More than 20     6.00 /*/

 

 

 Source: Rates for 1991 calculated from the monthly averages ending

 

 June 30, 1991, of Moody's Corporate Bond Yield Average--Monthly

 

 Average Corporates.

 

 

 /*/ As the applicable federal interest rate for 1991 of 8.42 percent

 

 exceeds this prevailing state assumed interest rate, the interest

 

 rate to be used for this product under section 807 is 8.42 percent.

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

Part III, Schedule D1--1983

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1983 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 D. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are contracts with cash settlement options

 

 and that are valued on a change in fund basis:

 

 

   Cash       Future                          Valuation Interest

 

 Settlement  Interest    Guarantee                 Rate

 

 Options?   Guarantee?   Duration              For Plan Type

 

                          (years)            A         B         C

 

 

    Yes       Yes        5 or fewer      12.75     11.75      8.75

 

                         More than 5,

 

                         but not more

 

                         than 10         12.25     11.75      8.75

 

                         More than 10,

 

                         but not more

 

                         than 20         11.25     10.75      8.25

 

                         More than 20     9.25      9.25      7.25

 

 

    Yes       No         5 or fewer      13.50     12.25      9.25

 

                         More than 5,

 

                         but not more

 

                         than 10         12.75     12.25      9.25

 

                         More than 10,

 

                         but not more

 

                         than 20         11.75     11.25      8.75

 

                         More than 20     9.75      9.75      7.75

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

Part III, Schedule D2--1984

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1984 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 D. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are contracts with cash settlement options

 

 and that are valued on a change in fund basis:

 

 

   Cash       Future                          Valuation Interest

 

 Settlement  Interest    Guarantee                 Rate

 

 Options?   Guarantee?   Duration              For Plan Type

 

                          (years)            A         B         C

 

 

    Yes       Yes        5 or fewer      12.75     11.75      8.50

 

                         More than 5,

 

                         but not more

 

                         than 10         12.25     11.75      8.50

 

                         More than 10,

 

                         but not more

 

                         than 20         11.25     10.75      8.00

 

                         More than 20     9.25      9.25      7.00

 

 

    Yes       No         5 or fewer      13.25     12.25      9.25

 

                         More than 5,

 

                         but not more

 

                         than 10         12.75     12.25      9.25

 

                         More than 10,

 

                         but not more

 

                         than 20         11.75     11.25      8.50

 

                         More than 20     9.75      9.75      7.50

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

Part III, Schedule D3--1985

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1985 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 D. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are contracts with cash settlement options

 

 and that are valued on a change in fund basis:

 

 

   Cash       Future                          Valuation Interest

 

 Settlement  Interest    Guarantee                 Rate

 

 Options?   Guarantee?   Duration              For Plan Type

 

                          (years)            A         B         C

 

 

    Yes       Yes        5 or fewer      12.50     11.50      8.50

 

                         More than 5,

 

                         but not more

 

                         than 10         12.00     11.50      8.50

 

                         More than 10,

 

                         but not more

 

                         than 20         11.00     10.50      8.00

 

                         More than 20     9.00      9.00      7.00

 

 

    Yes       No         5 or fewer      13.00     12.00      9.00

 

                         More than 5,

 

                         but not more

 

                         than 10         12.50     12.00      9.00

 

                         More than 10,

 

                         but not more

 

                         than 20         11.50     11.00      8.50

 

                         More than 20     9.50      9.50      7.50

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

Part III, Schedule D4--1986

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1986 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 D. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are contracts with cash settlement options

 

 and that are valued on a change in fund basis:

 

 

   Cash       Future                          Valuation Interest

 

 Settlement  Interest    Guarantee                 Rate

 

 Options?   Guarantee?   Duration              For Plan Type

 

                          (years)            A         B         C

 

 

    Yes       Yes        5 or fewer      10.25      9.50      7.25

 

                         More than 5,

 

                         but not more

 

                         than 10         10.00      9.50      7.25

 

                         More than 10,

 

                         but not more

 

                         than 20          9.25      8.75      6.75

 

                         More than 20     7.75      7.75      6.00

 

 

    Yes       No         5 or fewer      10.75     10.00      7.75

 

                         More than 5,

 

                         but not more

 

                         than 10         10.25     10.00      7.75

 

                         More than 10,

 

                         but not more

 

                         than 20          9.50      9.25      7.25

 

                         More than 20     8.00      8.00      6.50

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

Part III, Schedule D5--1987

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1987 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 D. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are contracts with cash settlement options

 

 and that are valued on a change in fund basis:

 

 

   Cash       Future                          Valuation Interest

 

 Settlement  Interest    Guarantee                 Rate

 

 Options?   Guarantee?   Duration              For Plan Type

 

                          (years)            A         B         C

 

 

    Yes       Yes        5 or fewer       9.00      8.50      6.50

 

                         More than 5,

 

                         but not more

 

                         than 10          8.75      8.50      6.50

 

                         More than 10,

 

                         but not more

 

                         than 20          8.00      7.75      6.25

 

                         More than 20     6.75      6.75      5.50

 

 

    Yes       No         5 or fewer       9.50      8.75      6.75

 

                         More than 5,

 

                         but not more

 

                         than 10          9.00      8.75      6.75

 

                         More than 10,

 

                         but not more

 

                         than 20          8.50      8.00      6.50

 

                         More than 20     7.25      7.25      6.00

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

Part III, Schedule D6--1988

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1988 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 D. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are contracts with cash settlement options

 

 and that are valued on a change in fund basis:

 

 

   Cash       Future                          Valuation Interest

 

 Settlement  Interest    Guarantee                 Rate

 

 Options?   Guarantee?   Duration              For Plan Type

 

                          (years)            A         B         C

 

 

    Yes       Yes        5 or fewer      10.00      9.25      7.00 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10          9.50      9.25      7.00 /*/

 

                         More than 10,

 

                         but not more

 

                         than 20          8.75      8.50      6.75 /*/

 

                         More than 20     7.50 /*/  7.50 /*/  6.00 /*/

 

 

    Yes       No         5 or fewer      10.25      9.50      7.50 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10         10.00      9.50      7.50 /*/

 

                         More than 10,

 

                         but not more

 

                         than 20          9.25      8.75      7.00 /*/

 

                         More than 20     7.75 /*/  7.75 /*/  6.25 /*/

 

 

      /*/ As the applicable federal interest rate for 1988 of 7.77

 

 percent exceeds this prevailing state assumed interest rate, the

 

 interest rate to be used for this product under section 807 is 7.77

 

 percent.

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

Part III, Schedule D7--1989

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1989 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 D. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are contracts with cash settlement options

 

 and that are valued on a change in fund basis:

 

 

   Cash       Future                          Valuation Interest

 

 Settlement  Interest    Guarantee                 Rate

 

 Options?   Guarantee?   Duration              For Plan Type

 

                          (years)            A         B         C

 

 

    Yes       Yes        5 or fewer       9.75      9.00      7.00 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10          9.50      9.00      7.00 /*/

 

                         More than 10,

 

                         but not more

 

                         than 20          8.75      8.25      6.50 /*/

 

                         More than 20     7.25 /*/  7.25 /*/  5.75 /*/

 

 

    Yes       No         5 or fewer      10.00      9.50      7.25 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10          9.75      9.50      7.25 /*/

 

                         More than 10,

 

                         but not more

 

                         than 20          9.00      8.75      7.00 /*/

 

                         More than 20     7.50 /*/  7.50 /*/  6.25 /*/

 

 

 /*/ As the applicable federal interest rate for 1989 of 8.16 percent

 

 exceeds this prevailing state assumed interest rate, the interest

 

 rate to be used for this product under section 807 is 8.16 percent.

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

Part III, Schedule D8--1990

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1990 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 D. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are contracts with cash settlement options

 

 and that are valued on a change in fund basis:

 

 

   Cash       Future                          Valuation Interest

 

 Settlement  Interest    Guarantee                 Rate

 

 Options?   Guarantee?   Duration              For Plan Type

 

                          (years)            A         B         C

 

 

    Yes       Yes        5 or fewer       9.25      8.50      6.50 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10          8.75      8.50      6.50 /*/

 

                         More than 10,

 

                         but not more

 

                         than 20          8.25 /*/  8.00 /*/  6.25 /*/

 

                         More than 20     7.00 /*/  7.00 /*/  5.50 /*/

 

 

    Yes       No         5 or fewer       9.50      8.75      7.00 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10          9.25      8.75      7.00 /*/

 

                         More than 10,

 

                         but not more

 

                         than 20          8.50      8.25 /*/  6.50 /*/

 

                         More than 20     7.25 /*/  7.25 /*/  6.00 /*/

 

 

 /*/ As the applicable federal interest rate for 1990 of 8.37 percent

 

 exceeds this prevailing state assumed interest rate, the interest

 

 rate to be used for this product under section 807 is 8.37 percent.

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

Part III, Schedule D9--1991

       STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD

 

             VALUATION LAW FOR 1991 CALENDAR YEAR BUSINESS

 

                    GOVERNED BY THE 1980 AMENDMENTS

 

 

 D. Valuation interest rates for other annuities and guaranteed

 

 interest contracts that are contracts with cash settlement options

 

 and that are valued on a change in fund basis:

 

 

   Cash       Future                          Valuation Interest

 

 Settlement  Interest    Guarantee                 Rate

 

 Options?   Guarantee?   Duration              For Plan Type

 

                          (years)            A         B         C

 

 

    Yes       Yes        5 or fewer       9.25      8.75      6.75 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10          9.00      8.75      6.75 /*/

 

                         More than 10,

 

                         but not more

 

                         than 20          8.25 /*/  8.00 /*/  6.25 /*/

 

                         More than 20     7.00 /*/  7.00 /*/  5.75 /*/

 

 

    Yes       No         5 or fewer       9.75      9.00      7.00 /*/

 

                         More than 5,

 

                         but not more

 

                         than 10          9.25      9.00      7.00 /*/

 

                         More than 10,

 

                         but not more

 

                         than 20          8.75      8.25 /*/  6.75 /*/

 

                         More than 20     7.25 /*/  7.25 /*/  6.00 /*/

 

 

      /*/ As the applicable federal interest rate for 1991 of 8.42

 

 percent exceeds this prevailing state assumed interest rate, the

 

 interest rate to be used for this product under section 807 is 8.42

 

 percent.

 

 

 See material at the end of Part III for definition of issue year

 

 basis, change in fund basis, cash settlement options, future interest

 

 guarantee, guarantee duration, and plan types.

 

 

DEFINITION OF TERMS IN SCHEDULES IN PART III /*/

/*/ The terms used in the schedules in Part III of this ruling are those used in the Standard Valuation Law. All changes from the precise wording of that law have been made only for clarity and are not intended to have substantive effect.

Issue Year Basis

An issue year basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract.

Change in Fund Basis

The change in fund basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund.

Cash Settlement Options

The distinction is between an annuity or guaranteed interest contract that provides a cash settlement option and an annuity or guaranteed interest contract that does not provide a cash settlement option. For example, a deferred annuity that provides a lump sum option at the end of the deferred period provides a cash settlement option. A deferred annuity with no options other than the annuity payments does not provide a cash settlement option.

Future Interest Guarantee

In the case of annuities or guaranteed interest contracts valued on an issue year basis, the distinction is between an annuity or guaranteed interest contract that guarantees interest on considerations received more than one year after issue or purchase and an annuity or guaranteed interest contract that does not include that guarantee. In the case of contracts valued on a change in fund basis, the distinction is between contracts that guarantee interest rates on considerations received more than 12 months beyond the valuation date and those contracts that do not include that guarantee.

Guarantee Duration

 

 

Life Insurance:

 

 

      For life insurance, the guarantee duration is the maximum

 

      number of years the life insurance can remain in force, either

 

      on a basis guaranteed in the policy, or under options to

 

      convert to plans of life insurance with premium rates or

 

      nonforfeiture values (or both) that are guaranteed in the

 

      original policy.

 

 

Annuities and Guaranteed Interest Contracts with Cash Settlement

 

Options:

 

 

      For annuities and guaranteed interest contracts with cash

 

      settlement options, the guarantee duration is the number of

 

      years for which the contract guarantees interest rates in

 

      excess of the calendar year statutory valuation interest rate

 

      for life insurance policies with guarantee durations in excess

 

      of twenty years.

 

 

Annuities and Guaranteed Interest Contracts with No Cash Settlement

 

Options:

 

 

      For annuities and guaranteed interest contracts with no cash

 

      settlement options, the guarantee duration is the number of

 

      years from the date of issue or date of purchase to the date

 

      annuity benefits are scheduled to commence.

 

 

Plan Type

 

 

Plan Type A:

 

 

      At any time policyholder may withdraw funds only (1) with the

 

      adjustment to reflect changes in interest rates or asset values

 

      since receipt of the funds by the insurance company, or (2)

 

      without such adjustment but in installments over five years or

 

      more, or (3) as an immediate life annuity. Plan Type A also

 

      includes policies that do not permit withdrawals.

 

 

Plan Type B:

 

 

      Before expiration of the interest rate guarantee, policyholder

 

      may withdraw funds only (1) with adjustment to reflect changes

 

      in interest rates or asset values since receipt of the funds by

 

      the insurance company, or (2) without such adjustment but in

 

      installments over five years or more. Plan Type B also includes

 

      policies that do not permit withdrawals before expiration of

 

      the interest rate guarantee. At the end of the interest rate

 

      guarantee, funds may be withdrawn without adjustment in a

 

      single sum or installments over fewer than five years.

 

 

Plan Type C:

 

 

      Policyholder may withdraw funds before expiration of interest

 

      rate guarantee in a single sum or installments over fewer than

 

      five years either (1) without adjustment to reflect changes in

 

      interest rates or asset values since receipt of the funds by

 

      the insurance company, or (2) subject only to a fixed surrender

 

      charge stipulated in the contract as a percentage of the fund.

 

 

Part IV. Applicable Federal Interest Rates--1988-1992 Inclusive.

            TABLE OF APPLICABLE FEDERAL INTEREST RATES FOR

 

                        PURPOSES OF SECTION 807

 

 

               Year                      Interest Rate

 

               1988                           7.77

 

               1989                           8.16

 

               1990                           8.37

 

               1991                           8.42

 

               1992                           8.40

 

 

Source: For 1988, Rev. Rul. 88-16, 1988-1 C.B. 266; for 1989, Rev. Rul. 88-101A, 1988-2 C.B. 136; for 1990, Rev. Rul. 89-127, 1989-2 C.B. 215; for 1991, Rev. Rul. 90-99, 1990-2 C.B. 199; and for 1992, Rev. Rul. 91-62, 1991-2 C.B. 357.

EFFECT ON OTHER REVENUE RULINGS

Rev. Rul. 87-26 is supplemented by the addition of a table listing the applicable federal interest rates under section 807 for 1988 through 1992. Rev. Rul. 87-26 is clarified with respect to the schedules of prevailing state assumed interest rates and prevailing commissioners' standard tables of mortality and morbidity for years before 1984, and is supplemented with respect to the schedules for years beginning after December 31, 1983. As so clarified and supplemented, Rev. Rul. 87-26 is superseded with respect to the schedules. The holdings in Rev. Rul. 87-26 with respect to Issues (1) to (4) are not superseded.

DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Code Sections
  • Subject Areas/Tax Topics
  • Index Terms
    insurance companies, life, reserves
  • Jurisdictions
  • Language
    English
  • Tax Analysts Electronic Citation
    92 TNT 68-23
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