Section 681B.240 - Asset adequacy analysis: Consideration of certain interest rate scenarios1. When performing an asset adequacy analysis, the appointed actuary shall consider in the analysis the effect of the following interest rate scenarios: (a) Level with no deviation;(b) Uniformly increasing over 10 years at 0.5 percent per year and then level;(c) Uniformly increasing at 1 percent per year over 5 years and then uniformly decreasing at 1 percent per year to the original level at the end of 10 years and then level;(d) An immediate increase of 3 percent and then level;(e) Uniformly decreasing over 10 years at 0.5 percent per year and then level;(f) Uniformly decreasing at 1 percent per year over 5 years and then uniformly increasing at 1 percent per year to the original level at the end of 5 years and then level; and(g) An immediate decrease of 3 percent and then level.2. For the scenarios described in subsection 1 and any other scenarios which are used, projected interest rates for a 5-year treasury note need not be reduced beyond the point where the 5-year treasury note yield would be at not more than 50 percent of its initial level.3. The beginning interest rates may be based on: (a) Interest rates on the valuation date for new investments which are similar to recent investments allocated to support the product being tested; or(b) An outside index of assets, such as treasury yields, of the appropriate length on a date close to the valuation date.4. The method used to determine the beginning yield curve and associated interest rates must be specifically defined. The beginning yield curve and associated interest rates must be consistent for all interest rate scenarios.Nev. Admin. Code § 681B.240
Added to NAC by Comm'r of Insurance, eff. 5-23-96