Texas Insurance Code - Section 425.061. Computation Of Calendar Year Statutory Valuation Interest Rate: General Rule
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§ 425.061. COMPUTATION OF CALENDAR YEAR STATUTORY
VALUATION INTEREST RATE: GENERAL RULE. (a) For purposes of
Subsection (b):
(1) R1 is the lesser of R or .09;
(2) R2 is the greater of R or .09;
(3) R is the reference interest rate determined under
Section 425.063; and
(4) W is the weighting factor determined under Section
425.062.
(b) The calendar year statutory valuation interest rate
("I") is determined as provided by this section, with the results
rounded to the nearest one-quarter of one percent:
(1) for life insurance:
I = .03 + W(R1-.03) + (W/2)(R2-.09); and
(2) for a single premium immediate annuity or annuity
benefits involving life contingencies arising from another annuity
with a cash settlement option or from a guaranteed interest
contract with a cash settlement option, or for an annuity or
guaranteed interest contract without a cash settlement option, or
for an annuity or guaranteed interest contract with a cash
settlement option that is valued on a change in fund basis:
I = .03 + W(R-.03).
(c) For an annuity or guaranteed interest contract with a
cash settlement option that is valued on an issue year basis, other
than an annuity or contract described by Subsection (b)(2):
(1) the formula prescribed by Subsection (b)(1)
applies to an annuity or guaranteed interest contract with a
guarantee duration determined under Section 425.062(f) greater
than 10 years; and
(2) the formula prescribed by Subsection (b)(2)
applies to an annuity or guaranteed interest contract with a
guarantee duration determined under Section 425.062(f) of 10 years
or less.
(d) Notwithstanding Subsections (b) and (c), if the
calendar year statutory valuation interest rate for a life
insurance policy issued in a calendar year as determined under
Subsection (b) or (c), as applicable, would differ from the
corresponding actual rate for similar policies issued in the
preceding calendar year by less than one-half of one percent, the
calendar year statutory valuation interest rate for the policy is
the corresponding actual rate for the preceding calendar year. For
purposes of this subsection, the calendar year statutory valuation
interest rate for a life insurance policy issued in a calendar year
is determined for 1980 using the reference interest rate defined
for 1979, and is determined for each subsequent calendar year
regardless of whether Subchapter B, Chapter 1105, applies to the
policy.
Added by Acts 2005, 79th Leg., ch. 727, § 1, eff. April 1, 2007.
Section: 425.054 425.055 425.056 425.057 425.058 425.059 425.060 425.061 425.062 425.063 425.064 425.065 425.066 425.067 425.068
Last modified: August 11, 2007
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