Texas Insurance Code - Section 425.063. Reference Interest Rate
Legal Research Home >
Texas Lawyer > Insurance Code > Texas Insurance Code - Section 425.063. Reference Interest Rate
§ 425.063. REFERENCE INTEREST RATE. (a) In this section,
"Moody's Corporate Bond Yield Average" means the Moody's Corporate
Bond Yield Average--Monthly Average Corporates, as published by
Moody's Investors Service, Inc.
(b) Except as provided by Subsection (g), the reference
interest rate for purposes of Section 425.061 is determined as
provided by Subsections (c)-(f).
(c) The reference interest rate for a life insurance policy
is the lesser of the average over a period of 36 months or the
average over a period of 12 months, ending on June 30 of the
calendar year preceding the year of issue, of the Moody's Corporate
Bond Yield Average.
(d) The reference interest rate is the average over a period
of 12 months, ending on June 30 of the calendar year of issue or year
of purchase, of the Moody's Corporate Bond Yield Average for:
(1) 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;
(2) an annuity or guaranteed interest contract
with a cash settlement option, other than an annuity or contract
described by Subdivision (1), that is valued on an issue year basis
and has a guarantee duration as determined under Section 425.062(f)
of 10 years or less; or
(3) an annuity or guaranteed interest contract
without a cash settlement option.
(e) The reference interest rate is the lesser of the average
over a period of 36 months or the average over a period of 12 months,
ending on June 30 of the calendar year of issue or purchase, of the
Moody's Corporate Bond Yield Average for an annuity or guaranteed
interest contract with a cash settlement option, other than an
annuity or contract described by Subsection (d)(1), that is valued
on an issue year basis and has a guarantee duration as determined
under Section 425.062(f) greater than 10 years.
(f) The reference interest rate is the average over a period
of 12 months, ending on June 30 of the calendar year of the change in
the fund, of the Moody's Corporate Bond Yield Average, for an
annuity or guaranteed interest contract with a cash settlement
option, other than an annuity or contract described by Subsection
(d)(1), that is valued on a change in fund basis.
(g) At least annually, the commissioner shall:
(1) determine whether the reference interest
rates prescribed by Subsections (c), (d), (e), and (f) continue to
be a reasonably accurate approximation of the average yield
achieved from purchases in the United States in publicly quoted
markets of investment grade fixed term and fixed interest corporate
obligations for the periods referenced in Subsection (c), (d), (e),
or (f), as applicable; and
(2) if the commissioner determines that a
reference interest rate prescribed by Subsection (c), (d), (e), or
(f) is not a reasonably accurate approximation of the average yield
described by Subdivision (1), adopt rules in the manner prescribed
by Chapters 2001 and 2002, Government Code, to prescribe an
alternative method of determining a reference interest rate, as
appropriate, that is a reasonably accurate approximation of that
average yield.
Added by Acts 2005, 79th Leg., ch. 727, § 1, eff. April 1, 2007.
Section: 425.056 425.057 425.058 425.059 425.060 425.061 425.062 425.063 425.064 425.065 425.066 425.067 425.068 425.069 425.070
Last modified: August 11, 2007
|
