Texas Insurance Code - Section 425.062. Weighting Factors
Legal Research Home >
Texas Lawyer > Insurance Code > Texas Insurance Code - Section 425.062. Weighting Factors
§ 425.062. WEIGHTING FACTORS. (a) This section
prescribes the weighting factors referred to in the formulas
prescribed by Section 425.061.
(b) The weighting factor for a life insurance policy is
determined by the following table:
Guarantee Duration (Years) Weighting Factor 10 or less .50 More than 10, but not more than 20 .45 More than 20 .35
(c) For purposes of Subsection (b), 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 life insurance plans with premium rates or nonforfeiture
values, or both, that are guaranteed in the original policy.
(d) The weighting factor for a single premium immediate
annuity or for 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 is .80.
(e) The weighting factor for an annuity or a guaranteed
interest contract, other than an annuity or contract to which
Subsection (d) applies, is determined by the following tables:
(1) For an annuity or guaranteed interest contract
that is valued on an issue year basis:
Guarantee Duration (Years) Weighting Factor for Plan Type A B C 5 or less: .80 .60 .50 More than 5, but not more than 10: .75 .60 .50 More than 10, but not more than 20: .65 .50 .45 More than 20: .45 .35 .35
(2) For an annuity or guaranteed interest contract
that is valued on a change in fund basis, the factors prescribed by
Subdivision (1) increased by:
Plan Type
ABC
.15.25.05
(3) For an annuity or guaranteed interest contract
that is valued on an issue year basis that does not guarantee
interest on considerations received more than one year after issue
or purchase, other than an annuity or contract that does not have a
cash settlement option, or an annuity or guaranteed interest
contract that is valued on a change in fund basis that does not
guarantee interest rates on considerations received more than 12
months after the valuation date, the factors prescribed by
Subdivision (1) or determined under Subdivision (2), as
appropriate, increased by:
Plan Type
ABC
.05.05.05
(f) For purposes of Subsection (e):
(1) for an annuity or guaranteed interest contract
with a cash settlement option, the guarantee duration is the number
of years for which the contract guarantees interest rates greater
than the calendar year statutory valuation interest rate for life
insurance policies with guarantee duration greater than 20 years;
and
(2) for an annuity or guaranteed interest contract
without a cash settlement option, the guarantee duration is the
number of years from the issue or purchase date to the date annuity
benefits are scheduled to begin.
(g) For purposes of Subsection (e):
(1) a policy is a "Plan Type A" policy if:
(A) the policyholder may withdraw funds at any
time, but only:
(i) with an adjustment to reflect changes
in interest rates or asset values after the insurance company
receives the funds;
(ii) without an adjustment described by
Subparagraph (i), provided that the withdrawal is in installments
over five years or more; or
(iii) as an immediate life annuity; or
(B) the policyholder is not permitted to withdraw
funds at any time;
(2) a policy is a "Plan Type B" policy if:
(A) before the expiration of the interest rate
guarantee:
(i) the policyholder may withdraw funds,
but only:
(a) with an adjustment to reflect
changes in interest rates or asset values after the insurance
company receives the funds; or
(b) without an adjustment described
by Subsubparagraph (a), provided that the withdrawal is in
installments over five years or more; or
(ii) the policyholder is not permitted to withdraw
funds; and
(B) on the expiration of the interest rate
guarantee, the policyholder may withdraw funds in a single sum or in
installments over less than five years, without an adjustment
described by Paragraph (A)(i); and
(3) a policy is a "Plan Type C" policy if the
policyholder may withdraw funds before the expiration of the
interest rate guarantee in a single sum or in installments over less
than five years:
(A) without an adjustment to reflect changes in
interest rates or asset values after the insurance company receives
the funds; or
(B) subject only to a fixed surrender charge that
is a percentage of the fund stipulated in the contract.
(h) An insurance company may elect to value an annuity or
guaranteed interest contract with a cash settlement option on an
issue year basis or on a change in fund basis. A company must value
an annuity or guaranteed interest contract without a cash
settlement option on an issue year basis.
Added by Acts 2005, 79th Leg., ch. 727, § 1, eff. April 1, 2007.
Section: 425.055 425.056 425.057 425.058 425.059 425.060 425.061 425.062 425.063 425.064 425.065 425.066 425.067 425.068 425.069
Last modified: August 11, 2007
|
