Cal. Code Regs. tit. 10 § 2644.18

Current through Register 2024 Notice Reg. No. 50, December 13, 2024

Section 2644.18 - Federal Income Tax Factors

(a) "Underwriting federal income tax factor" means

1.0 minus the prospective federal income tax rate on underwriting. The Commissioner finds that the prospective federal income tax rate on underwriting is 21%.

(b) "Investment federal income tax factor" means

1.0 minus the prospective federal income tax rate on investment income. The prospective federal income tax rate on investment income shall be calculated using the weighted yield, adjusted for investment expenses, computed in section 2644.20 and shall take into account any tax preferences and exemptions for the income from each asset class and from each category of bond issuer. The Commissioner finds that the prospective federal income tax rate on the investment income from taxable bonds, mortgage loans, real estate, cash and short-term investments and on investment expenses is 21%, on capital gains is 21%, on tax-exempt bond interest is 5.25% and on stock dividends is 13.125%. For investment income on other invested assets, the prospective federal income tax rate shall be the weighted average of the tax rates on the above categories.

Cal. Code Regs. Tit. 10, § 2644.18

1. New section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3). A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency language will be repealed by operation of law on the following day.
2. Repealed by operation of Government Code section 11346.1(g) (Register 92, No. 15).
3. New section refiled 2-14-92 as an emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance must be transmittted to OAL 6-15-92 or emergency language will be repealed by operation of law on the following day.
4. Repealed by operation of Government Code section 11346.1(g) and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing only pursuant to Government Code section 11343(a)(1) (Register 95, No. 11).
5. Amendment of section heading and repealer and new section filed 1-3-2007; operative 4-3-2007. Submitted to OAL for printing only pursuant to Government Code section 11340.9(g) (Register 2007, No. 1).
6. Amendment filed 2-23-2018; operative 2-23-2018. Exempt from the Administrative Procedure Act and OAL review pursuant to Government Code section 11340.9(g); submitted to OAL for filing and printing only pursuant to Government Code section 11343.8 (Register 2018, No. 8).

Note: Authority cited: Sections 1861.01 and 1861.05, Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference: Sections 1861.01 and 1861.05, Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d 805.

1. New section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3). A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency language will be repealed by operation of law on the following day.
2. Repealed by operation of Government Code section 11346.1(g) (Register 92, No. 15).
3. New section refiled 2-14-92 as an emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance must be transmittted to OAL 6-15-92 or emergency language will be repealed by operation of law on the following day.
4. Repealed by operation of Government Code section 11346.1(g) and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing only pursuant to Government Code section 11343(a)(1) (Register 95, No. 11).
5. Amendment of section heading and repealer and new section filed 1-3-2007; operative 4-3-2007. Submitted to OAL for printing only pursuant to Government Code section 11340.9(g) (Register 2007, No. 1).
6. Amendment filed 2-23-2018; operative 2/23/2018. Exempt from the Administrative Procedure Act and OAL review pursuant to Government Code section 11340.9(g); submitted to OAL for filing and printing only pursuant to Government Code section 11343.8 (Register 2018, No. 8).