2011 Utah Code
Title 31A Insurance Code
Chapter 17 Determination of Financial Condition
Section 506 Computation of minimum standard by calendar year of issue.

31A-17-506. Computation of minimum standard by calendar year of issue.
(1) Applicability of Section 31A-17-506: The interest rates used in determining the minimum standard for the valuation shall be the calendar year statutory valuation interest rates as defined in this section for:
(a) all life insurance policies issued in a particular calendar year, on or after the operative date of Subsection 31A-22-408(6)(d);
(b) all individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1982;
(c) all annuities and pure endowments purchased in a particular calendar year on or after January 1, 1982, under group annuity and pure endowment contracts; and
(d) the net increase, if any, in a particular calendar year after January 1, 1982, in amounts held under guaranteed interest contracts.
(2) Calendar year statutory valuation interest rates:
(a) The calendar year statutory valuation interest rates, "I," shall be determined as follows and the results rounded to the nearer 1/4 of 1%:
(i) for life insurance:
I = .03 + W(R1 - .03) + (W/2)(R2 - .09);
(ii) 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:
I = .03 + W(R - .03),
where R1 is the lesser of R and .09,
R2 is the greater of R and .09,
R is the reference interest rate defined in Subsection (4), and
W is the weighting factor defined in this section;
(iii) 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 Subsection (2)(a)(ii), the formula for life insurance stated in Subsection (2)(a)(i) 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 Subsection (2)(a)(ii) shall apply to annuities and guaranteed interest contracts with guarantee duration of 10 years or less;
(iv) 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 Subsection (2)(a)(ii) shall apply; and
(v) 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 Subsection (2)(a)(ii) shall apply.
(b) However, if the calendar year statutory valuation interest rate for any life insurance policies 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 1% the calendar year statutory valuation interest rate for such 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 Subsection 31A-22-408(6)(d) becomes operative.
(3) Weighting factors:
(a) The weighting factors referred to in the formulas stated in Subsection (2) are given in the following tables:
(i) (A) Weighting factors for life insurance:

	Guarantee Duration (Years)	Weighting Factors
	10 or less:		.50
	More than 10, but less than 20:		.45
	More than 20:		.35

(B) For 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 which are guaranteed in the original policy;
(ii) 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: .80
(iii) Weighting factors for other annuities and for guaranteed interest contracts, except as stated in Subsection (3)(a)(ii), shall be as specified in the tables in Subsections (3)(a)(iii)(A), (B), and (C), according to the rules and definitions in Subsection (3)(b):
(A) For annuities and guaranteed interest contracts valued on an issue year basis:

	Guarantee Duration (Years)	Weighting Factors 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
	Plan Type
			A	B	C

(B) For annuities and guaranteed interest
contracts valued on a change in fund basis, the
factors shown in Subsection (3)(a)(iii)(A)
increased by:

		.15	.25	.05
		Plan Type
		A	B	C