2006 Code of Virginia § 38.2-3133 - Calendar year statutory valuation interest rates

38.2-3133. Calendar year statutory valuation interest rates.

A. The calendar year statutory valuation interest rates, referred to in thissection as "I," shall be determined as follows and the results rounded tothe nearest one-quarter of one percent:

1. For life insurance,

I=.03 + W (R1-.03) + (W/2) (R2-.09)

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 38.2-3135, and

W is the weighting factor defined in 38.2-3134;

2. For single premium immediate annuities, and for annuity benefits involvinglife contingencies arising from other annuities with cash settlement options,and from guaranteed interest contracts with cash settlement options,

I=.03 + W (R-.03)

where

R is the reference interest rate defined in 38.2-3135, and

W is the weighting factor defined in 38.2-3134;

3. For other annuities with cash settlement options and guaranteed interestcontracts with cash settlement options, valued on an issue year basis, exceptas stated in subdivision 2 of this subsection, the formula for life insurancestated in subdivision 1 of this subsection shall apply to annuities andguaranteed interest contracts with guarantee durations in excess of tenyears. The formula for single premium immediate annuities stated insubdivision 2 of this subsection shall apply to annuities and guaranteedinterest contracts with guarantee duration of ten years or less;

4. For other annuities with no cash settlement options and for guaranteedinterest contracts with no cash settlement options, the formula for singlepremium immediate annuities stated in subdivision 2 of this subsection shallapply;

5. For other annuities with cash settlement options and guaranteed interestcontracts with cash settlement options, valued on a change in fund basis, theformula for single premium immediate annuities stated in subdivision 2 ofthis subsection shall apply.

B. However, if the calendar year statutory valuation interest rate for anylife insurance policies issued in any calendar year determined withoutreference to this sentence differs from the corresponding actual rate forsimilar policies issued in the immediately preceding calendar year by lessthan one-half of one percent, the calendar year statutory valuation interestrate for life insurance policies shall equal the corresponding actual ratefor the immediately preceding calendar year. For purposes of applying theimmediately preceding sentence, the calendar year statutory valuationinterest rate for life insurance policies issued in a calendar year shall bedetermined for 1980, using the reference interest rate defined for 1979, andshall be determined for each later calendar year regardless of when 38.2-3209 becomes operative.

(Code 1950, 38-394; 1952, c. 317, 38.1-456; 1959, Ex. Sess., c. 43; 1962,c. 562; 1975, c. 215; 1979, c. 437; 1982, c. 227; 1986, c. 562.)