{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/38.2-1371.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/38.2-1371.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/38.2-1371.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/38.2-1371.html"}],"law_id":76954,"edition_id":1,"section_id":76954,"structure_id":14262,"section_number":"38.2-1371","catch_line":"Computation of minimum standard by calendar year of issue","history":"2014, c. 571.","full_text":"A\n\nThe interest rates used in determining the minimum standard for the valuation of the following shall be the calendar year statutory valuation interest rates determined as provided in subsection B:1\n\nLife insurance policies issued in a particular calendar year on or after the operative date of § 38.2-3209;2\n\nIndividual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1983, except that an insurer may elect for this to apply to all individual annuity and pure endowment contracts issued after July 1, 1982;3\n\nAnnuities and pure endowments purchased in a particular calendar year on or after January 1, 1983, under group annuity and pure endowment contracts; and4\n\nThe net increase, if any, in a particular calendar year after January 1, 1983, in amounts held under guaranteed interest contracts.B\n\nThe calendar year statutory valuation interest rates, referred to in this section as “I,” shall be determined as follows and the results rounded to the nearer one-quarter of one percent:1\n\nFor life insurance:\n\t\t\t\tI =.03 + W(R1 -.03) + (W\/2)(R2 -.09);2\n\nFor single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options:\n\t\t\t\tI =.03 + W(R -.03).\n\t\t\t\tFor purposes of subdivisions 1 and 2:\n\t\t\t\tR1 is the lesser of R and.09;\n\t\t\t\tR2 is the greater of R and.09;\n\t\t\t\tR is the reference interest rate defined in this section; and\n\t\t\t\tW is the weighting factor defined in this section;3\n\nFor other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis, except as stated in subdivision 2, the formula for life insurance stated in subdivision 1 shall apply to annuities and guaranteed interest contracts with guarantee durations in excess of 10 years, and the formula for single premium immediate annuities stated in subdivision 2 shall apply to annuities and guaranteed interest contracts with guarantee duration of 10 years or less;4\n\nFor other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in subdivision 2 shall apply; and5\n\nFor other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in subdivision 2 shall apply.\n\t\t\t\tHowever, if the calendar year statutory valuation interest rate for a life insurance policy issued in any calendar year determined without reference to this sentence differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of one percent, the calendar year statutory valuation interest rate for the life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year. For purposes of applying the immediately preceding sentence, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980, using the reference interest rate defined in 1979, and shall be determined for each subsequent calendar year regardless of when § 38.2-3209 becomes operative.C\n\nThe weighting factors referred to in the formulas stated in subsection B are given in the following tables:1\n\nWeighting factors for life insurance:\n\t\t\t\tFor life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force 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.2\n\nWeighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options:3\n\nWeighting factors for other annuities and for guaranteed interest contracts, except as stated in subdivision 2, shall be as specified in tables a, b, and c of this subdivision, according to the rules and definitions in subdivisions d, e, and f of this subdivision:\n\t\t\t\ta. For annuities and guaranteed interest contracts valued on an issue year basis:\n\t\t\t\tb. For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in table a increased by:\n\t\t\t\t \n\t\t\t\t \n\t\t\t\tc. For annuities and guaranteed interest contracts valued on an issue year basis, other than those with no cash settlement options, that do not guarantee interest on considerations received more than one year after issue or purchase and for annuities and guaranteed interest contracts valued on a change in fund basis that do not guarantee interest rates on considerations received more than 12 months beyond the valuation date, the factors shown in table a or derived in table b increased by:\n\t\t\t\t \n\t\t\t\t \n\t\t\t\td. For other annuities with cash settlement options 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 duration in excess of 20 years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guaranteed duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence.\n\t\t\t\te. “Plan Type” as used in tables a, b, and c is defined as follows:\n\t\t\t\tPlan Type A: At any time policyholder (i) may withdraw funds only with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, (ii) may withdraw funds without an adjustment but in installments over five years or more, (iii) may withdraw funds as an immediate life annuity, or (iv) is not permitted to withdraw funds.\n\t\t\t\tPlan Type B: Before expiration of the interest rate guarantee, policyholder may withdraw funds only (i) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, (ii) without an adjustment but in installments over five years or more, or (iii) no withdrawal permitted. At the end of interest rate guarantee, funds may be withdrawn without an adjustment in a single sum or installments over less than five years.\n\t\t\t\tPlan Type C: Policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five years either (i) without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company or (ii) subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund.\n\t\t\t\tf. An insurer may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue year basis or on a change-in-fund basis. Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue year basis. As used in this section, 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, and 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.D\n\nThe reference interest rate referred to in subsection B shall be defined as follows:1\n\nFor life insurance, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year preceding the year of issue, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.2\n\nFor single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or year of purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.3\n\nFor other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year-of-issue basis, except as stated in subdivision 2, with guarantee duration in excess of 10 years, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.4\n\nFor other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subdivision 2, with guarantee duration of 10 years or less, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.5\n\nFor other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.6\n\nFor other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change-in-fund basis, except as stated in subdivision 2, the average over a period of 12 months, ending on June 30 of the calendar year of the change in the fund, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.E\n\nIn the event that the monthly average of the composite yield on seasoned corporate bonds is no longer published by Moody’s Investors Service, Inc., or in the event that the NAIC determines that the monthly average of the composite yield on seasoned corporate bonds as published by Moody’s Investors Service, Inc., is no longer appropriate for the determination of the reference interest rate, then an alternative method for determination of the reference interest rate adopted by the NAIC and approved by regulation adopted by the Commission may be substituted.","order_by":null,"text":{"0":{"id":276190,"text":"The interest rates used in determining the minimum standard for the valuation of the following shall be the calendar year statutory valuation interest rates determined as provided in subsection B:","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A1"},"1":{"id":276191,"text":"Life insurance policies issued in a particular calendar year on or after the operative date of § 38.2-3209;","type":"section","prefixes":["A","1"],"prefix":"1","entire_prefix":"A1","prefix_anchor":"A1","level":2,"prior_prefix":"A","next_prefix":"A2"},"2":{"id":276192,"text":"Individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1983, except that an insurer may elect for this to apply to all individual annuity and pure endowment contracts issued after July 1, 1982;","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A1","next_prefix":"A3"},"3":{"id":276193,"text":"Annuities and pure endowments purchased in a particular calendar year on or after January 1, 1983, under group annuity and pure endowment contracts; and","type":"section","prefixes":["A","3"],"prefix":"3","entire_prefix":"A3","prefix_anchor":"A3","level":2,"prior_prefix":"A2","next_prefix":"A4"},"4":{"id":276194,"text":"The net increase, if any, in a particular calendar year after January 1, 1983, in amounts held under guaranteed interest contracts.","type":"section","prefixes":["A","4"],"prefix":"4","entire_prefix":"A4","prefix_anchor":"A4","level":2,"prior_prefix":"A3","next_prefix":"B"},"5":{"id":276195,"text":"The calendar year statutory valuation interest rates, referred to in this section as “I,” shall be determined as follows and the results rounded to the nearer one-quarter of one percent:","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A4","next_prefix":"B1"},"6":{"id":276196,"text":"For life insurance:\n\t\t\t\tI =.03 + W(R1 -.03) + (W\/2)(R2 -.09);","type":"section","prefixes":["B","1"],"prefix":"1","entire_prefix":"B1","prefix_anchor":"B1","level":2,"prior_prefix":"B","next_prefix":"B2"},"7":{"id":276197,"text":"For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options:\n\t\t\t\tI =.03 + W(R -.03).\n\t\t\t\tFor purposes of subdivisions 1 and 2:\n\t\t\t\tR1 is the lesser of R and.09;\n\t\t\t\tR2 is the greater of R and.09;\n\t\t\t\tR is the reference interest rate defined in this section; and\n\t\t\t\tW is the weighting factor defined in this section;","type":"section","prefixes":["B","2"],"prefix":"2","entire_prefix":"B2","prefix_anchor":"B2","level":2,"prior_prefix":"B1","next_prefix":"B3"},"8":{"id":276198,"text":"For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis, except as stated in subdivision 2, the formula for life insurance stated in subdivision 1 shall apply to annuities and guaranteed interest contracts with guarantee durations in excess of 10 years, and the formula for single premium immediate annuities stated in subdivision 2 shall apply to annuities and guaranteed interest contracts with guarantee duration of 10 years or less;","type":"section","prefixes":["B","3"],"prefix":"3","entire_prefix":"B3","prefix_anchor":"B3","level":2,"prior_prefix":"B2","next_prefix":"B4"},"9":{"id":276199,"text":"For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in subdivision 2 shall apply; and","type":"section","prefixes":["B","4"],"prefix":"4","entire_prefix":"B4","prefix_anchor":"B4","level":2,"prior_prefix":"B3","next_prefix":"B5"},"10":{"id":276200,"text":"For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in subdivision 2 shall apply.\n\t\t\t\tHowever, if the calendar year statutory valuation interest rate for a life insurance policy issued in any calendar year determined without reference to this sentence differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of one percent, the calendar year statutory valuation interest rate for the life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year. For purposes of applying the immediately preceding sentence, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980, using the reference interest rate defined in 1979, and shall be determined for each subsequent calendar year regardless of when § 38.2-3209 becomes operative.","type":"section","prefixes":["B","5"],"prefix":"5","entire_prefix":"B5","prefix_anchor":"B5","level":2,"prior_prefix":"B4","next_prefix":"C"},"11":{"id":276201,"text":"The weighting factors referred to in the formulas stated in subsection B are given in the following tables:","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B5","next_prefix":"C1"},"12":{"id":276202,"text":"Weighting factors for life insurance:\n\t\t\t\tFor life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force 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.","type":"section","prefixes":["C","1"],"prefix":"1","entire_prefix":"C1","prefix_anchor":"C1","level":2,"prior_prefix":"C","next_prefix":"C2"},"13":{"id":276203,"text":"Weighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options:","type":"section","prefixes":["C","2"],"prefix":"2","entire_prefix":"C2","prefix_anchor":"C2","level":2,"prior_prefix":"C1","next_prefix":"C3"},"14":{"id":276204,"text":"Weighting factors for other annuities and for guaranteed interest contracts, except as stated in subdivision 2, shall be as specified in tables a, b, and c of this subdivision, according to the rules and definitions in subdivisions d, e, and f of this subdivision:\n\t\t\t\ta. For annuities and guaranteed interest contracts valued on an issue year basis:\n\t\t\t\tb. For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in table a increased by:\n\t\t\t\t \n\t\t\t\t \n\t\t\t\tc. For annuities and guaranteed interest contracts valued on an issue year basis, other than those with no cash settlement options, that do not guarantee interest on considerations received more than one year after issue or purchase and for annuities and guaranteed interest contracts valued on a change in fund basis that do not guarantee interest rates on considerations received more than 12 months beyond the valuation date, the factors shown in table a or derived in table b increased by:\n\t\t\t\t \n\t\t\t\t \n\t\t\t\td. For other annuities with cash settlement options 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 duration in excess of 20 years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guaranteed duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence.\n\t\t\t\te. “Plan Type” as used in tables a, b, and c is defined as follows:\n\t\t\t\tPlan Type A: At any time policyholder (i) may withdraw funds only with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, (ii) may withdraw funds without an adjustment but in installments over five years or more, (iii) may withdraw funds as an immediate life annuity, or (iv) is not permitted to withdraw funds.\n\t\t\t\tPlan Type B: Before expiration of the interest rate guarantee, policyholder may withdraw funds only (i) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, (ii) without an adjustment but in installments over five years or more, or (iii) no withdrawal permitted. At the end of interest rate guarantee, funds may be withdrawn without an adjustment in a single sum or installments over less than five years.\n\t\t\t\tPlan Type C: Policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five years either (i) without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company or (ii) subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund.\n\t\t\t\tf. An insurer may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue year basis or on a change-in-fund basis. Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue year basis. As used in this section, 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, and 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.","type":"section","prefixes":["C","3"],"prefix":"3","entire_prefix":"C3","prefix_anchor":"C3","level":2,"prior_prefix":"C2","next_prefix":"D"},"15":{"id":276205,"text":"The reference interest rate referred to in subsection B shall be defined as follows:","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C3","next_prefix":"D1"},"16":{"id":276206,"text":"For life insurance, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year preceding the year of issue, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.","type":"section","prefixes":["D","1"],"prefix":"1","entire_prefix":"D1","prefix_anchor":"D1","level":2,"prior_prefix":"D","next_prefix":"D2"},"17":{"id":276207,"text":"For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or year of purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.","type":"section","prefixes":["D","2"],"prefix":"2","entire_prefix":"D2","prefix_anchor":"D2","level":2,"prior_prefix":"D1","next_prefix":"D3"},"18":{"id":276208,"text":"For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year-of-issue basis, except as stated in subdivision 2, with guarantee duration in excess of 10 years, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.","type":"section","prefixes":["D","3"],"prefix":"3","entire_prefix":"D3","prefix_anchor":"D3","level":2,"prior_prefix":"D2","next_prefix":"D4"},"19":{"id":276209,"text":"For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subdivision 2, with guarantee duration of 10 years or less, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.","type":"section","prefixes":["D","4"],"prefix":"4","entire_prefix":"D4","prefix_anchor":"D4","level":2,"prior_prefix":"D3","next_prefix":"D5"},"20":{"id":276210,"text":"For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.","type":"section","prefixes":["D","5"],"prefix":"5","entire_prefix":"D5","prefix_anchor":"D5","level":2,"prior_prefix":"D4","next_prefix":"D6"},"21":{"id":276211,"text":"For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change-in-fund basis, except as stated in subdivision 2, the average over a period of 12 months, ending on June 30 of the calendar year of the change in the fund, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.","type":"section","prefixes":["D","6"],"prefix":"6","entire_prefix":"D6","prefix_anchor":"D6","level":2,"prior_prefix":"D5","next_prefix":"E"},"22":{"id":276212,"text":"In the event that the monthly average of the composite yield on seasoned corporate bonds is no longer published by Moody’s Investors Service, Inc., or in the event that the NAIC determines that the monthly average of the composite yield on seasoned corporate bonds as published by Moody’s Investors Service, Inc., is no longer appropriate for the determination of the reference interest rate, then an alternative method for determination of the reference interest rate adopted by the NAIC and approved by regulation adopted by the Commission may be substituted.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D6"}},"ancestry":[{"id":14262,"edition_id":1,"name":"Standard Valuation","identifier":"10","label":"article","depth":3,"order_by":1,"parent_id":13289,"metadata":{},"date_created":"2026-06-26 03:47:30","date_modified":"2026-06-26 03:47:30","permalink":{"id":211387,"object_type":"structure","relational_id":14262,"identifier":"10","token":"38.2\/13\/10","url":"\/38.2\/13\/10\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13289,"edition_id":1,"name":"Reports, Reserves and Examinations, Insurance Holding Companies, Reinsurance Intermediaries, and Managing General Agents","identifier":"13","label":"chapter","depth":2,"order_by":1,"parent_id":12698,"metadata":{},"date_created":"2026-06-26 03:44:35","date_modified":"2026-06-26 03:44:35","permalink":{"id":211347,"object_type":"structure","relational_id":13289,"identifier":"13","token":"38.2\/13","url":"\/38.2\/13\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12698,"edition_id":1,"name":"Insurance","identifier":"38.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:49","date_modified":"2026-06-26 03:43:49","permalink":{"id":210661,"object_type":"structure","relational_id":12698,"identifier":"38.2","token":"38.2","url":"\/38.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":84586,"structure_id":14262,"section_number":"38.2-1365","catch_line":"Definitions","url":"\/38.2-1365\/","token":"38.2\/13\/10\/38.2-1365","metadata":false},{"id":80617,"structure_id":14262,"section_number":"38.2-1366","catch_line":"Reserve valuation","url":"\/38.2-1366\/","token":"38.2\/13\/10\/38.2-1366","metadata":false},{"id":70162,"structure_id":14262,"section_number":"38.2-1367","catch_line":"Actuarial opinion of reserves","url":"\/38.2-1367\/","token":"38.2\/13\/10\/38.2-1367","metadata":false},{"id":67907,"structure_id":14262,"section_number":"38.2-1368","catch_line":"Minimum valuation standard for policies issued prior to certain dates","url":"\/38.2-1368\/","token":"38.2\/13\/10\/38.2-1368","metadata":false},{"id":66783,"structure_id":14262,"section_number":"38.2-1369","catch_line":"Computation of minimum standard","url":"\/38.2-1369\/","token":"38.2\/13\/10\/38.2-1369","metadata":false},{"id":86779,"structure_id":14262,"section_number":"38.2-1370","catch_line":"Computation of minimum standard for annuities","url":"\/38.2-1370\/","token":"38.2\/13\/10\/38.2-1370","metadata":false},{"id":76954,"structure_id":14262,"section_number":"38.2-1371","catch_line":"Computation of minimum standard by calendar year of issue","url":"\/38.2-1371\/","token":"38.2\/13\/10\/38.2-1371","metadata":false},{"id":72346,"structure_id":14262,"section_number":"38.2-1372","catch_line":"Reserve valuation method; life insurance and endowment benefits","url":"\/38.2-1372\/","token":"38.2\/13\/10\/38.2-1372","metadata":false},{"id":76847,"structure_id":14262,"section_number":"38.2-1373","catch_line":"Reserve valuation method; annuity and pure endowment benefits","url":"\/38.2-1373\/","token":"38.2\/13\/10\/38.2-1373","metadata":false},{"id":77501,"structure_id":14262,"section_number":"38.2-1374","catch_line":"Minimum reserves","url":"\/38.2-1374\/","token":"38.2\/13\/10\/38.2-1374","metadata":false},{"id":84837,"structure_id":14262,"section_number":"38.2-1375","catch_line":"Optional reserve calculation","url":"\/38.2-1375\/","token":"38.2\/13\/10\/38.2-1375","metadata":false},{"id":55507,"structure_id":14262,"section_number":"38.2-1376","catch_line":"Reserve calculation; valuation net premium exceeding the gross premium charged","url":"\/38.2-1376\/","token":"38.2\/13\/10\/38.2-1376","metadata":false},{"id":76132,"structure_id":14262,"section_number":"38.2-1377","catch_line":"Reserve calculation; indeterminate premium plans","url":"\/38.2-1377\/","token":"38.2\/13\/10\/38.2-1377","metadata":false},{"id":71532,"structure_id":14262,"section_number":"38.2-1378","catch_line":"Minimum standard for accident and health insurance contracts","url":"\/38.2-1378\/","token":"38.2\/13\/10\/38.2-1378","metadata":false},{"id":86866,"structure_id":14262,"section_number":"38.2-1379","catch_line":"Valuation manual for policies issued on or after the operative date of the valuation manual","url":"\/38.2-1379\/","token":"38.2\/13\/10\/38.2-1379","metadata":false},{"id":82780,"structure_id":14262,"section_number":"38.2-1380","catch_line":"Requirements of a principle-based valuation","url":"\/38.2-1380\/","token":"38.2\/13\/10\/38.2-1380","metadata":false},{"id":56910,"structure_id":14262,"section_number":"38.2-1381","catch_line":"Experience reporting for policies in force on or after the operative date of the valuation manual","url":"\/38.2-1381\/","token":"38.2\/13\/10\/38.2-1381","metadata":false},{"id":67564,"structure_id":14262,"section_number":"38.2-1382","catch_line":"Confidentiality","url":"\/38.2-1382\/","token":"38.2\/13\/10\/38.2-1382","metadata":false},{"id":76707,"structure_id":14262,"section_number":"38.2-1383","catch_line":"Single state exemption","url":"\/38.2-1383\/","token":"38.2\/13\/10\/38.2-1383","metadata":false},{"id":63558,"structure_id":14262,"section_number":"38.2-1384","catch_line":"Assessment against insurers whose policies are valued","url":"\/38.2-1384\/","token":"38.2\/13\/10\/38.2-1384","metadata":false},{"id":65928,"structure_id":14262,"section_number":"38.2-1385","catch_line":"Article not applicable in certain cases","url":"\/38.2-1385\/","token":"38.2\/13\/10\/38.2-1385","metadata":false}],"previous_section":{"id":86779,"structure_id":14262,"section_number":"38.2-1370","catch_line":"Computation of minimum standard for annuities","url":"\/38.2-1370\/","token":"38.2\/13\/10\/38.2-1370","metadata":false},"next_section":{"id":72346,"structure_id":14262,"section_number":"38.2-1372","catch_line":"Reserve valuation method; life insurance and endowment benefits","url":"\/38.2-1372\/","token":"38.2\/13\/10\/38.2-1372","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/38.2-1371\/","history_text":"

This law was first created in 2014. The record of its establishment is cataloged in chapter 571<\/a> of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year.<\/p>","references":[{"id":66783,"section_number":"38.2-1369","catch_line":"Computation of minimum standard","order_by":null,"url":"\/38.2-1369\/"},{"id":86779,"section_number":"38.2-1370","catch_line":"Computation of minimum standard for annuities","order_by":null,"url":"\/38.2-1370\/"},{"id":72346,"section_number":"38.2-1372","catch_line":"Reserve valuation method; life insurance and endowment benefits","order_by":null,"url":"\/38.2-1372\/"},{"id":60031,"section_number":"38.2-3723","catch_line":"Reserves","order_by":null,"url":"\/38.2-3723\/"}],"refers_to":[{"id":77084,"section_number":"38.2-3209","catch_line":"Same; adjusted premiums for policies","order_by":null,"url":"\/38.2-3209\/"}],"permalink":{"id":211413,"object_type":"law","relational_id":76954,"identifier":"38.2-1371","token":"38.2\/13\/10\/38.2-1371","url":"\/38.2-1371\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/38.2-1371\/","token":"38.2\/13\/10\/38.2-1371","dublin_core":{"Title":"Computation of minimum standard by calendar year of issue","Type":"Text","Format":"text\/html","Identifier":"\u00a7 38.2-1371","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> The interest rates<\/span><\/span> used in determining the minimum standard for the valuation of the following shall be the calendar year statutory valuation interest rates<\/span><\/span> determined as provided in subsection B: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Life insurance policies<\/span> issued in a particular calendar year on or after the operative date of § 38.2-3209<\/a>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Individual annuity and pure endowment contracts<\/span> issued in a particular calendar year on or after January 1, 1983, except that an insurer<\/span> may elect for this to apply to all individual annuity and pure endowment contracts<\/span> issued after July 1, 1982; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Annuities and pure endowments purchased in a particular calendar year on or after January 1, 1983, under group annuity and pure endowment contracts<\/span>; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> The net increase, if any, in a particular calendar year after January 1, 1983, in amounts held under guaranteed interest contracts<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> The calendar year statutory valuation interest rates<\/span><\/span>, referred to in this section as “I,” shall be determined as follows and the results rounded to the nearer one-quarter of one percent: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> For life insurance<\/span>:\n\t\t\t\tI =.03 + W(R1 -.03) + (W\/2)(R2 -.09); <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement<\/span> options and from guaranteed interest contracts<\/span> with cash settlement<\/span> options:\n\t\t\t\tI =.03 + W(R -.03).\n\t\t\t\tFor purposes of subdivisions 1 and 2:\n\t\t\t\tR1 is the lesser of R and.09;\n\t\t\t\tR2 is the greater of R and.09;\n\t\t\t\tR is the reference interest rate<\/span> defined in this section; and\n\t\t\t\tW is the weighting factor defined in this section; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> For other annuities with cash settlement<\/span> options and guaranteed interest contracts<\/span> with cash settlement<\/span> options, valued on an issue<\/span> year basis, except as stated in subdivision 2, the formula for life insurance<\/span> stated in subdivision 1 shall apply to annuities and guaranteed interest contracts<\/span> with guarantee durations in excess of 10 years, and the formula for single premium immediate annuities stated in subdivision 2 shall apply to annuities and guaranteed interest contracts<\/span> with guarantee duration of 10 years or less; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> For other annuities with no cash settlement<\/span> options and for guaranteed interest contracts<\/span> with no cash settlement<\/span> options, the formula for single premium immediate annuities stated in subdivision 2 shall apply; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> For other annuities with cash settlement<\/span> options and guaranteed interest contracts<\/span> with cash settlement<\/span> options, valued on a change in fund basis, the formula for single premium immediate annuities stated in subdivision 2 shall apply.\n\t\t\t\tHowever, if the calendar year statutory valuation interest rate<\/span> for a life insurance<\/span> policy issued in any calendar year determined without reference to this sentence differs from the corresponding actual rate<\/span> for similar policies issued in the immediately preceding calendar year by less than one-half of one percent, the calendar year statutory valuation interest rate<\/span> for the life insurance policies<\/span> shall be equal to the corresponding actual rate<\/span> for the immediately preceding calendar year. For purposes of applying the immediately preceding sentence, the calendar year statutory valuation interest rate<\/span> for life insurance policies<\/span> issued in a calendar year shall be determined for 1980, using the reference interest rate<\/span> defined in 1979, and shall be determined for each subsequent calendar year regardless of when § 38.2-3209<\/a> becomes operative. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> The weighting factors referred to in the formulas stated in subsection B are given in the following tables: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Weighting factors for life insurance<\/span>:\n\t\t\t\tFor life insurance<\/span>, the guarantee duration is the maximum number of years the life insurance<\/span> can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance<\/span> with premium rates<\/span><\/span> or nonforfeiture values, or both, that are guaranteed in the original policy. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Weighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement<\/span> options and guaranteed interest contracts<\/span> with cash settlement<\/span> options: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Weighting factors for other annuities and for guaranteed interest contracts<\/span>, except as stated in subdivision 2, shall be as specified in tables a, b, and c of this subdivision, according to the rules and definitions in subdivisions d, e, and f of this subdivision:\n\t\t\t\ta. For annuities and guaranteed interest contracts<\/span> valued on an issue<\/span> year basis:\n\t\t\t\tb. For annuities and guaranteed interest contracts<\/span> valued on a change in fund basis, the factors shown in table a increased by:\n\t\t\t\t \n\t\t\t\t \n\t\t\t\tc. For annuities and guaranteed interest contracts<\/span> valued on an issue<\/span> year basis, other than those with no cash settlement<\/span> options, that do not guarantee interest on considerations received more than one year after issue<\/span> or purchase and for annuities and guaranteed interest contracts<\/span> valued on a change in fund basis that do not guarantee interest rates<\/span><\/span> on considerations received more than 12 months beyond the valuation date, the factors shown in table a or derived in table b increased by:\n\t\t\t\t \n\t\t\t\t \n\t\t\t\td. For other annuities with cash settlement<\/span> options and guaranteed interest contracts<\/span> with cash settlement<\/span> options, the guarantee duration is the number of years for which the contract<\/span> guarantees interest rates<\/span><\/span> in excess of the calendar year statutory valuation interest rate<\/span> for life insurance policies<\/span> with guarantee duration in excess of 20 years. For other annuities with no cash settlement<\/span> options and for guaranteed interest contracts<\/span> with no cash settlement<\/span> options, the guaranteed duration is the number of years from the date of issue<\/span> or date of purchase to the date annuity benefits are scheduled to commence.\n\t\t\t\te. “Plan Type” as used in tables a, b, and c is defined as follows:\n\t\t\t\tPlan Type A: At any time policyholder (i) may withdraw funds only with an adjustment to reflect changes in interest rates<\/span><\/span> or asset values since receipt of the funds by the insurance company<\/span>, (ii) may withdraw funds without an adjustment but in installments over five years or more, (iii) may withdraw funds as an immediate life annuity, or (iv) is not permitted to withdraw funds.\n\t\t\t\tPlan Type B: Before expiration of the interest rate<\/span> guarantee, policyholder may withdraw funds only (i) with an adjustment to reflect changes in interest rates<\/span><\/span> or asset values since receipt of the funds by the insurance company<\/span>, (ii) without an adjustment but in installments over five years or more, or (iii) no withdrawal permitted. At the end of interest rate<\/span> guarantee, funds may be withdrawn without an adjustment in a single sum or installments over less than five years.\n\t\t\t\tPlan Type C: Policyholder may withdraw funds before expiration of interest rate<\/span> guarantee in a single sum or installments over less than five years either (i) without adjustment to reflect changes in interest rates<\/span><\/span> or asset values since receipt of the funds by the insurance company<\/span> or (ii) subject only to a fixed surrender charge stipulated in the contract<\/span> as a percentage of the fund.\n\t\t\t\tf. An insurer<\/span> may elect to value guaranteed interest contracts<\/span> with cash settlement<\/span> options and annuities with cash settlement<\/span> options on either an issue<\/span> year basis or on a change-in-fund basis. Guaranteed interest contracts<\/span> with no cash settlement<\/span> options and other annuities with no cash settlement<\/span> options must be valued on an issue<\/span> year basis. As used in this section, an issue<\/span> year basis of valuation refers to a valuation basis under which the interest rate<\/span> used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract<\/span> is the calendar year valuation interest rate<\/span> for the year of issue<\/span> or year of purchase of the annuity or guaranteed interest contract<\/span>, and the change-in-fund basis of valuation refers to a valuation basis under which the interest rate<\/span> used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract<\/span> is the calendar year valuation interest rate<\/span> for the year of the change in the fund. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> The reference interest rate<\/span> referred to in subsection B shall be defined as follows: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> For life insurance<\/span>, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year preceding the year of issue<\/span>, of the monthly average of the composite yield on seasoned corporate bonds<\/span>, as published by Moody’s Investors Service, Inc. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement<\/span> options and guaranteed interest contracts<\/span> with cash settlement<\/span> options, the average over a period of 12 months, ending on June 30 of the calendar year of issue<\/span> or year of purchase, of the monthly average of the composite yield on seasoned corporate bonds<\/span>, as published by Moody’s Investors Service, Inc. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> For other annuities with cash settlement<\/span> options and guaranteed interest contracts<\/span> with cash settlement<\/span> options, valued on a year-of-issue<\/span> basis, except as stated in subdivision 2, with guarantee duration in excess of 10 years, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year of issue<\/span> or purchase, of the monthly average of the composite yield on seasoned corporate bonds<\/span>, as published by Moody’s Investors Service, Inc. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> For other annuities with cash settlement<\/span> options and guaranteed interest contracts<\/span> with cash settlement<\/span> options, valued on a year of issue<\/span> basis, except as stated in subdivision 2, with guarantee duration of 10 years or less, the average over a period of 12 months, ending on June 30 of the calendar year of issue<\/span> or purchase, of the monthly average of the composite yield on seasoned corporate bonds<\/span>, as published by Moody’s Investors Service, Inc. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> For other annuities with no cash settlement<\/span> options and for guaranteed interest contracts<\/span> with no cash settlement<\/span> options, the average over a period of 12 months, ending on June 30 of the calendar year of issue<\/span> or purchase, of the monthly average of the composite yield on seasoned corporate bonds<\/span>, as published by Moody’s Investors Service, Inc. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

6.<\/span> For other annuities with cash settlement<\/span> options and guaranteed interest contracts<\/span> with cash settlement<\/span> options, valued on a change-in-fund basis, except as stated in subdivision 2, the average over a period of 12 months, ending on June 30 of the calendar year of the change in the fund, of the monthly average of the composite yield on seasoned corporate bonds<\/span>, as published by Moody’s Investors Service, Inc. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> In the event that the monthly average of the composite yield on seasoned corporate bonds<\/span> is no longer published by Moody’s Investors Service, Inc., or in the event that the NAIC<\/span> determines that the monthly average of the composite yield on seasoned corporate bonds<\/span> as published by Moody’s Investors Service, Inc., is no longer appropriate for the determination of the reference interest rate<\/span>, then an alternative method for determination of the reference interest rate<\/span> adopted by the NAIC<\/span> and approved by regulation adopted by the Commission<\/span> may be substituted. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nCOMPUTATION OF MINIMUM STANDARD BY CALENDAR YEAR OF ISSUE (\u00a7 38.2-1371)\n\nA. The interest rates used in determining the minimum standard for the valuation\nof the following shall be the calendar year statutory valuation interest rates\ndetermined as provided in subsection B:\n\n 1. Life insurance policies issued in a particular calendar year on or after\n the operative date of § 38.2-3209;\n\n 2. Individual annuity and pure endowment contracts issued in a particular\n calendar year on or after January 1, 1983, except that an insurer may elect\n for this to apply to all individual annuity and pure endowment contracts\n issued after July 1, 1982;\n\n 3. Annuities and pure endowments purchased in a particular calendar year on or\n after January 1, 1983, under group annuity and pure endowment contracts; and\n\n 4. The net increase, if any, in a particular calendar year after January 1,\n 1983, in amounts held under guaranteed interest contracts.\n\nB. The calendar year statutory valuation interest rates, referred to in this\nsection as “I,” shall be determined as follows and the results\nrounded to the nearer one-quarter of one percent:\n\n 1. For life insurance:\n \t\t\t\tI =.03 + W(R1 -.03) + (W\/2)(R2 -.09);\n\n 2. For single premium immediate annuities and for annuity benefits involving\n life contingencies arising from other annuities with cash settlement options\n and from guaranteed interest contracts with cash settlement options:\n \t\t\t\tI =.03 + W(R -.03).\n \t\t\t\tFor purposes of subdivisions 1 and 2:\n \t\t\t\tR1 is the lesser of R and.09;\n \t\t\t\tR2 is the greater of R and.09;\n \t\t\t\tR is the reference interest rate defined in this section; and\n \t\t\t\tW is the weighting factor defined in this section;\n\n 3. For other annuities with cash settlement options and guaranteed interest\n contracts with cash settlement options, valued on an issue year basis, except\n as stated in subdivision 2, the formula for life insurance stated in\n subdivision 1 shall apply to annuities and guaranteed interest contracts with\n guarantee durations in excess of 10 years, and the formula for single premium\n immediate annuities stated in subdivision 2 shall apply to annuities and\n guaranteed interest contracts with guarantee duration of 10 years or less;\n\n 4. For other annuities with no cash settlement options and for guaranteed\n interest contracts with no cash settlement options, the formula for single\n premium immediate annuities stated in subdivision 2 shall apply; and\n\n 5. For other annuities with cash settlement options and guaranteed interest\n contracts with cash settlement options, valued on a change in fund basis, the\n formula for single premium immediate annuities stated in subdivision 2 shall\n apply.\n \t\t\t\tHowever, if the calendar year statutory valuation interest rate for a life\n insurance policy issued in any calendar year determined without reference to\n this sentence differs from the corresponding actual rate for similar policies\n issued in the immediately preceding calendar year by less than one-half of one\n percent, the calendar year statutory valuation interest rate for the life\n insurance policies shall be equal to the corresponding actual rate for the\n immediately preceding calendar year. For purposes of applying the immediately\n preceding sentence, the calendar year statutory valuation interest rate for\n life insurance policies issued in a calendar year shall be determined for\n 1980, using the reference interest rate defined in 1979, and shall be\n determined for each subsequent calendar year regardless of when §\n 38.2-3209 becomes operative.\n\nC. The weighting factors referred to in the formulas stated in subsection B are\ngiven in the following tables:\n\n 1. Weighting factors for life insurance:\n \t\t\t\tFor life insurance, the guarantee duration is the maximum number of years\n the life insurance can remain in force on a basis guaranteed in the policy or\n under options to convert to plans of life insurance with premium rates or\n nonforfeiture values, or both, that are guaranteed in the original policy.\n\n 2. Weighting factor for single premium immediate annuities and for annuity\n benefits involving life contingencies arising from other annuities with cash\n settlement options and guaranteed interest contracts with cash settlement\n options:\n\n 3. Weighting factors for other annuities and for guaranteed interest\n contracts, except as stated in subdivision 2, shall be as specified in tables\n a, b, and c of this subdivision, according to the rules and definitions in\n subdivisions d, e, and f of this subdivision:\n \t\t\t\ta. For annuities and guaranteed interest contracts valued on an issue year\n basis:\n \t\t\t\tb. For annuities and guaranteed interest contracts valued on a change in\n fund basis, the factors shown in table a increased by:\n \t\t\t\t \n \t\t\t\t \n \t\t\t\tc. For annuities and guaranteed interest contracts valued on an issue year\n basis, other than those with no cash settlement options, that do not guarantee\n interest on considerations received more than one year after issue or purchase\n and for annuities and guaranteed interest contracts valued on a change in fund\n basis that do not guarantee interest rates on considerations received more\n than 12 months beyond the valuation date, the factors shown in table a or\n derived in table b increased by:\n \t\t\t\t \n \t\t\t\t \n \t\t\t\td. For other annuities with cash settlement options and guaranteed\n interest contracts with cash settlement options, the guarantee duration is the\n number of years for which the contract guarantees interest rates in excess of\n the calendar year statutory valuation interest rate for life insurance\n policies with guarantee duration in excess of 20 years. For other annuities\n with no cash settlement options and for guaranteed interest contracts with no\n cash settlement options, the guaranteed duration is the number of years from\n the date of issue or date of purchase to the date annuity benefits are\n scheduled to commence.\n \t\t\t\te. “Plan Type” as used in tables a, b, and c is defined as\n follows:\n \t\t\t\tPlan Type A: At any time policyholder (i) may withdraw funds only with an\n adjustment to reflect changes in interest rates or asset values since receipt\n of the funds by the insurance company, (ii) may withdraw funds without an\n adjustment but in installments over five years or more, (iii) may withdraw\n funds as an immediate life annuity, or (iv) is not permitted to withdraw\n funds.\n \t\t\t\tPlan Type B: Before expiration of the interest rate guarantee,\n policyholder may withdraw funds only (i) with an adjustment to reflect changes\n in interest rates or asset values since receipt of the funds by the insurance\n company, (ii) without an adjustment but in installments over five years or\n more, or (iii) no withdrawal permitted. At the end of interest rate guarantee,\n funds may be withdrawn without an adjustment in a single sum or installments\n over less than five years.\n \t\t\t\tPlan Type C: Policyholder may withdraw funds before expiration of interest\n rate guarantee in a single sum or installments over less than five years\n either (i) without adjustment to reflect changes in interest rates or asset\n values since receipt of the funds by the insurance company or (ii) subject\n only to a fixed surrender charge stipulated in the contract as a percentage of\n the fund.\n \t\t\t\tf. An insurer may elect to value guaranteed interest contracts with cash\n settlement options and annuities with cash settlement options on either an\n issue year basis or on a change-in-fund basis. Guaranteed interest contracts\n with no cash settlement options and other annuities with no cash settlement\n options must be valued on an issue year basis. As used in this section, an\n issue year basis of valuation refers to a valuation basis under which the\n interest rate used to determine the minimum valuation standard for the entire\n duration of the annuity or guaranteed interest contract is the calendar year\n valuation interest rate for the year of issue or year of purchase of the\n annuity or guaranteed interest contract, and the change-in-fund basis of\n valuation refers to a valuation basis under which the interest rate used to\n determine the minimum valuation standard applicable to each change in the fund\n held under the annuity or guaranteed interest contract is the calendar year\n valuation interest rate for the year of the change in the fund.\n\nD. The reference interest rate referred to in subsection B shall be defined as\nfollows:\n\n 1. For life insurance, the lesser of the average over a period of 36 months\n and the average over a period of 12 months, ending on June 30 of the calendar\n year preceding the year of issue, of the monthly average of the composite\n yield on seasoned corporate bonds, as published by Moody’s Investors\n Service, Inc.\n\n 2. For single premium immediate annuities and for annuity benefits involving\n life contingencies arising from other annuities with cash settlement options\n and guaranteed interest contracts with cash settlement options, the average\n over a period of 12 months, ending on June 30 of the calendar year of issue or\n year of purchase, of the monthly average of the composite yield on seasoned\n corporate bonds, as published by Moody’s Investors Service, Inc.\n\n 3. For other annuities with cash settlement options and guaranteed interest\n contracts with cash settlement options, valued on a year-of-issue basis,\n except as stated in subdivision 2, with guarantee duration in excess of 10\n years, the lesser of the average over a period of 36 months and the average\n over a period of 12 months, ending on June 30 of the calendar year of issue or\n purchase, of the monthly average of the composite yield on seasoned corporate\n bonds, as published by Moody’s Investors Service, Inc.\n\n 4. For other annuities with cash settlement options and guaranteed interest\n contracts with cash settlement options, valued on a year of issue basis,\n except as stated in subdivision 2, with guarantee duration of 10 years or\n less, the average over a period of 12 months, ending on June 30 of the\n calendar year of issue or purchase, of the monthly average of the composite\n yield on seasoned corporate bonds, as published by Moody’s Investors\n Service, Inc.\n\n 5. For other annuities with no cash settlement options and for guaranteed\n interest contracts with no cash settlement options, the average over a period\n of 12 months, ending on June 30 of the calendar year of issue or purchase, of\n the monthly average of the composite yield on seasoned corporate bonds, as\n published by Moody’s Investors Service, Inc.\n\n 6. For other annuities with cash settlement options and guaranteed interest\n contracts with cash settlement options, valued on a change-in-fund basis,\n except as stated in subdivision 2, the average over a period of 12 months,\n ending on June 30 of the calendar year of the change in the fund, of the\n monthly average of the composite yield on seasoned corporate bonds, as\n published by Moody’s Investors Service, Inc.\n\nE. In the event that the monthly average of the composite yield on seasoned\ncorporate bonds is no longer published by Moody’s Investors Service, Inc.,\nor in the event that the NAIC determines that the monthly average of the\ncomposite yield on seasoned corporate bonds as published by Moody’s\nInvestors Service, Inc., is no longer appropriate for the determination of the\nreference interest rate, then an alternative method for determination of the\nreference interest rate adopted by the NAIC and approved by regulation adopted\nby the Commission may be substituted.\n\nHISTORY: 2014, c. 571.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}