I = .03 + W(R1 - .03) + W/2(R2 - .09)
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 specified in this section, and
W is the weighting factor specified in this section.
with cash settlement options, valued on an issue year basis, except as provided in subdivision (2), the formula for life insurance specified in subdivision (1) applies to annuities and guaranteed interest contracts with guarantee durations in excess of ten (10) years and the formula for single premium immediate annuities described in subdivision (2) applies to annuities and guaranteed interest contracts with guarantee duration of ten (10) years or less.
with no cash settlement options, the formula for single premium immediate annuities specified in subdivision (2).
with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities specified in subdivision (2).
Guarantee Duration (Years) | Weighting Factors |
10 or less | .50 |
More than 10, but not more than 20 | .45 |
More than 20 | .35 |
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 contract or under options to convert to life insurance contracts with premium rates, nonforfeiture values, or both that are guaranteed in the original contract.
.80 |
Guarantee Duration (Years) | Weighting Factor 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 |
.15 | .25 | .05 |
the weighting factors specified in clause (A) or derived in clause (B), increased by:
Plan Type | ||
A | B | C |
.05 | .05 | .05 |
with cash settlement options on either an issue year basis or on a change in fund basis. Other annuities and guaranteed interest contracts with no cash settlement options must be valued on an issue year basis.
ending on June 30 of the calendar year preceding the year of issue, of the monthly average of the composite yield on seasoned corporate bonds published by Moody's Investors Service, Inc.
with cash settlement options, the average, over a period of twelve (12) months ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds published by Moody's Investors Service, Inc.
with cash settlement options valued on a year of issue basis, except as provided in subdivision (2), with guarantee duration in excess of ten (10) years, the lesser of the average over a period of thirty-six (36) months or the average over a period of twelve (12) months ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds published by Moody's Investors Service, Inc.
with cash settlement options valued on a year of issue basis, except as provided in subdivision (2), with guarantee duration of ten (10) years or less, the average, over a period of twelve (12) months ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds published by Moody's Investors Service, Inc.
with no cash settlement options, the average, over a period of twelve (12) months ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds published by Moody's Investors Service, Inc.
with cash settlement options valued on a change in fund basis, except as provided in subdivision (2), the average, over a period of twelve (12) months ending on June 30 of the calendar year of the change in the fund, of the monthly average of the composite yield on seasoned corporate bonds published by Moody's Investors Service, Inc.
an alternative method for determination of the reference interest rate that is adopted by the NAIC and approved under rules adopted by the commissioner under IC 4-22-2 may be substituted.
IC 27-1-12.8-26