623.06(2)(c)
(c) For individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies — the 1937 standard annuity mortality table or, at the option of the company, the annuity mortality table for 1949, ultimate, or any modification of either of these tables approved by the commissioner.
623.06(2)(d)
(d) For group annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies — the group annuity mortality table for 1951, any modification of such table approved by the commissioner, or, at the option of the company, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts.
623.06(2)(e)
(e) For total and permanent disability benefits in or supplementary to ordinary policies or contracts issued on or after January 1, 1966, the tables of Period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 disability study of the society of actuaries, with regard to the type of benefit, or any tables of disablement rates and termination rates adopted after 1980 by the National Association of Insurance Commissioners, that are approved by rule adopted by the commissioner for use in determining the minimum standard of valuation for those policies; for policies or contracts issued on or after January 1, 1961 and before January 1, 1966, either those tables or, at the option of the company, the Class (3) disability table (1926); and for policies issued before January 1, 1961, the Class (3) disability table (1926). Any such table shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies.
623.06(2)(f)
(f) For accidental death benefits in or supplementary to policies issued on or after January 1, 1966, the 1959 accidental death benefits table or any accidental death benefits table adopted after 1980 by the National Association of Insurance Commissioners, that is approved by rule adopted by the commissioner for use in determining the minimum standard of valuation for those policies; for policies issued on or after January 1, 1961 and before January 1, 1966, either that table or, at the option of the company, the intercompany double indemnity mortality table; and for policies issued before January 1, 1961, the intercompany double indemnity mortality table. Either table shall be combined with a mortality table permitted for calculating the reserves for life insurance policies.
623.06(2)(g)
(g) For group life insurance, life insurance issued on the substandard basis and other special benefits, such tables as may be approved by the commissioner.
623.06(2a)
(2a) Except as provided in
sub. (2m), the minimum standard for the valuation of all individual annuity and pure endowment contracts issued on or after the operative date of this subsection, as defined in
sub. (2b), and for all annuities and pure endowments purchased on or after that operative date under group annuity and pure endowment contracts, shall be the commissioners reserve valuation methods defined in
subs. (3) to
(4m) and the following tables and interest rates:
623.06(2a)(a)
(a) For individual annuity and pure endowment contracts issued prior to November 8, 1977, excluding any disability and accidental death benefits in such contracts — the 1971 individual annuity mortality table, or any modification of this table approved by the commissioner, and 6 percent interest for single premium immediate annuity contracts, and 4 percent interest for all other individual annuity and pure endowment contracts.
623.06(2a)(b)
(b) For individual single premium immediate annuity contracts issued on or after November 8, 1977, excluding any disability and accidental death benefits in those contracts, the 1971 individual annuity mortality table or any individual annuity mortality table adopted after 1980 by the National Association of Insurance Commissioners, that is approved by rule adopted by the commissioner for use in determining the minimum standard of valuation for those contracts or any modification of either table approved by the commissioner, and 7.5 percent interest. For other individual annuity and pure endowment contracts issued on or after November 8, 1977, excluding any disability and accidental death benefits in those contracts, the 1971 individual annuity mortality table or any individual annuity mortality table adopted after 1980 by the National Association of Insurance Commissioners, that is approved by rule adopted by the commissioner for use in determining the minimum standard of valuation for those contracts, or any modification of either table approved by the commissioner, and 5.5 percent interest for single premium deferred annuity and pure endowment contracts and 4.5 percent interest for all other individual annuity and pure endowment contracts.
623.06(2a)(c)
(c) For all annuities and pure endowments purchased prior to November 8, 1977, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts — the 1971 group annuity mortality table, or any modification of this table approved by the commissioner, and 6 percent interest.
623.06(2a)(d)
(d) For all annuities and pure endowments purchased on or after November 8, 1977, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits in those contracts, the 1971 group annuity mortality table or any group annuity mortality table adopted after 1980 by the National Association of Insurance Commissioners, that is approved by rule adopted by the commissioner for use in determining the minimum standard of valuation for those annuities and pure endowments, or any modification of either table approved by the commissioner, and 7.5 percent interest.
623.06(2b)
(2b) After June 19, 1974, any company may file with the commissioner a written notice of its election to comply with
sub. (2a) after a specified date before January 1, 1979, which shall be the operative date of
sub. (2a) for such company, but a company may elect a different operative date for individual annuity and pure endowment contracts from that elected for group annuity and pure endowment contracts. If a company makes no such election, the operative date of
sub. (2a) for such company shall be January 1, 1979.
623.06(2m)(a)1.
1. “Change in fund basis" means a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under an annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund.
623.06(2m)(a)2.a.
a. For life insurance, 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, nonforfeiture values or both which are guaranteed in the original policy.
623.06(2m)(a)2.b.
b. For annuities and guaranteed interest contracts with cash settlement options, the number of years for which the contract guarantees interest rates in excess of the calendar year valuation interest rate for life insurance policies with a guarantee duration of more than 20 years.
623.06(2m)(a)2.c.
c. For annuities and guaranteed interest contracts without cash settlement options, the number of years from the date of issue or date of purchase to the date annuity or guaranteed interest benefits are scheduled to begin.
623.06(2m)(a)3.
3. “I" means the applicable calendar year valuation interest rate determined under
par. (c), rounded to the nearest 0.25 percent.
623.06(2m)(a)4.
4. “Issue year basis" means a valuation basis under which the interest rate used to determine the minimum valuation standard for the full duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract.
623.06(2m)(a)5.
5. “Moody's monthly average" means the corporate bond yield monthly average, as published by Moody's Investors Service, Inc.
623.06(2m)(a)6.a.
a. Withdraw funds with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company;
623.06(2m)(a)6.b.
b. Withdraw funds without adjustment in installments over 5 years or more;
623.06(2m)(a)7.
7. “Plan type B" means that a policyholder is subject to any of
subd. 6. a.,
b. or
d. At the end of the interest rate guarantee, funds may be withdrawn without the adjustment under
subd. 6. a. in a single sum or installments over less than 5 years.
623.06(2m)(a)8.
8. “Plan type C" means a policyholder may withdraw funds before the end of the interest rate guarantee in a single sum or installments over less than 5 years without the adjustment under
subd. 6. a. or subject to a fixed surrender charge stipulated in the contract as a percentage of the fund.
623.06(2m)(a)9.
9. “R" means the applicable reference interest rate determined under
par. (f).
623.06(2m)(b)
(b) Except as provided in
par. (d), the formulas under
par. (c) shall be used in determining the minimum standard for the valuation of all of the following:
623.06(2m)(b)2.
2. Individual annuity and pure endowment contracts issued in a calendar year after 1982.
623.06(2m)(b)3.
3. Annuities and pure endowments purchased in a calendar year after 1982 under group annuity and pure endowment contracts.
623.06(2m)(b)4.
4. The net increase in a calendar year after 1982, in amounts held under guaranteed interest contracts.
623.06(2m)(c)1.1. For life insurance, I = 0.03 + W (R1 - 0.03) + W/2 (R2 - 0.09).
623.06(2m)(c)2.
2. 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 = 0.03 + W (R - 0.03).
623.06(2m)(c)3.
3. Except as provided under
subd. 2., for annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis and having guarantee durations greater than 10 years, I = 0.03 + W (R1 - 0.03) W/2 (R2 - 0.09).
623.06(2m)(c)4.
4. Except as provided under
subd. 2., for annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis and having guarantee durations not exceeding 10 years, I = 0.03 + W (R - 0.03).
623.06(2m)(c)5.
5. For annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, I = 0.03 + W (R - 0.03).
623.06(2m)(c)6.
6. For annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, I = 0.03 + W (R - 0.03).
623.06(2m)(d)
(d) Notwithstanding
par. (c) 1., if the calendar year valuation interest rate determined under
par. (c) 1. differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than 0.5 percent, the calendar year valuation interest rate for those policies is the corresponding actual rate for the immediately preceding calendar year. For purposes of this paragraph, the calendar year valuation interest rate for policies issued in 1980 shall be determined using the reference interest rate for 1979 and shall be determined under this paragraph for subsequent calendar years notwithstanding
s. 632.43 (6m).
623.06(2m)(e)1.b.
b. More than 10 years and not more than 20 years, the weighting factor is 0.45.
623.06(2m)(e)2.
2. For single premium immediate annuities and annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the weighting factor is 0.80.
623.06(2m)(e)3.
3. Except as provided in
subd. 2., for annuities and guaranteed interest contracts valued on an issue year basis and having a guarantee duration of:
623.06(2m)(e)3.a.
a. Not more than 5 years, the weighting factor is 0.80 for plan type A, 0.60 for plan type B and 0.50 for plan type C.
623.06(2m)(e)3.b.
b. More than 5 years and not more than 10 years, the weighting factor is 0.75 for plan type A, 0.60 for plan type B and 0.50 for plan type C.
623.06(2m)(e)3.c.
c. More than 10 years and not more than 20 years, the weighting factor is 0.65 for plan type A, 0.50 for plan type B and 0.45 for plan type C.
623.06(2m)(e)3.d.
d. More than 20 years, the weighting factor is 0.45 for plan type A and 0.35 for plan types B and C.
623.06(2m)(e)4.
4. Except as provided in
subd. 2., for annuities and guaranteed interest contracts valued on a change in fund basis, the weighting factor is that specified under
subd. 3. increased by 0.15 for plan type A, 0.25 for plan type B and 0.05 for plan type C.
623.06(2m)(e)5.
5. Except as provided under
subd. 2., for annuities and guaranteed interest contracts valued on an issue year basis, other than those with no cash settlement options, which do not guarantee interest on considerations received more than one year after issue or purchase and for annuities and guaranteed interest contracts valued on a change in fund basis which do not guarantee interest rates on considerations received more than 12 months beyond the valuation date, the weighting factor is that specified under
subd. 3. or
4. increased by 0.05 for plan types A, B and C.
623.06(2m)(f)1.1. For life insurance, the reference interest rate is the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year next preceding the year of issue, of Moody's monthly average.
623.06(2m)(f)2.
2. 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, the reference interest rate is the average over a period of 12 months, ending on June 30 of the calendar year of issue or year of purchase, of Moody's monthly average.
623.06(2m)(f)3.
3. Except as provided under
subd. 2., for annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis and having a guarantee duration in excess of 10 years, the reference interest is the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of Moody's monthly average.
623.06(2m)(f)4.
4. Except as provided under
subd. 2., for annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis and having a guarantee duration of 10 years or less, the reference interest rate is the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of Moody's monthly average.
623.06(2m)(f)5.
5. For annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the reference interest rate is the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of Moody's monthly average.
623.06(2m)(f)6.
6. Except as provided under
subd. 2., for annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the reference interest rate is the average over a period of 12 months, ending on June 30 of the calendar year of the change in the fund, of Moody's monthly average.
623.06(2m)(g)
(g) If Moody's monthly average is no longer published, or if the national association of insurance commissioners determines that Moody's monthly average is no longer appropriate for the determination of the reference interest rate, an alternative method for determination of the reference interest rate, which is adopted by the National Association of Insurance Commissioners and approved by rule adopted by the commissioner, may be substituted.
623.06(2m)(h)
(h) A company may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on an issue year basis or a change in fund basis. Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue year basis.
623.06(3)
(3) Except as provided in
subs. (4m) and
(7), reserves according to the commissioners reserve valuation method, for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums shall be the excess, if any, of the present value, at the date of valuation, of such future guaranteed benefits provided for by such policies, over the then present value of any future modified net premiums therefor. The modified net premiums for any such policy shall be such uniform percentage of the respective contract premiums for such benefits that the present value, at the date of issue of the policy, of all such modified net premiums shall be equal to the sum of the then present value of such benefits provided for by the policy and the excess of
par. (a) over
par. (b), as follows:
623.06(3)(a)
(a) A net level annual premium equal to the present value, at the date of issue, of such benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one per year payable on the first and each subsequent anniversary of such policy on which a premium falls due; provided, that such net level annual premium shall not exceed the net level annual premium on the 19-year premium whole life plan for insurance of the same amount at an age one year higher than the age at issue of such policy.
623.06(3)(b)
(b) A net one-year term premium for such benefits provided for in the first policy year.
623.06(3m)(a)1.
1. “Assumed ending date" means the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than the excess premium.
623.06(3m)(a)2.
2. “Excess premium" means the amount by which a contract premium in the first policy year exceeds the contract premium in the 2nd policy year.
623.06(3m)(b)
(b) Except as provided under
sub. (7), any life insurance policy issued on or after January 1, 1984, for which no comparable benefit is provided in the first year for an excess premium and which provides an endowment benefit or a cash surrender value or a combination of both in an amount greater than the excess premium, the reserve according to the commissioners reserve valuation method as of any policy anniversary occurring on or before the assumed ending date is the greater of the reserve on that policy anniversary calculated under
sub. (3) and the reserve on that policy anniversary calculated under
sub. (3) subject to the following computational assumptions:
623.06(3m)(b)1.
1. The value defined in
sub. (3) (a) is reduced by 15 percent of the amount of the excess premium.
623.06(3m)(b)2.
2. All present values of benefits and premiums are determined without reference to premiums or benefits provided by the policy after the assumed ending date.
623.06(3m)(b)3.
3. The policy matures on the assumed ending date as an endowment.
623.06(3m)(b)4.
4. The cash surrender value provided on the assumed ending date is an endowment benefit.
623.06(3m)(c)
(c) In making the comparison under
par. (b) the mortality and interest bases stated in
subs. (2) and
(2m) shall be used.
623.06(4)
(4) Reserves according to the commissioners reserve valuation method for the following shall be calculated by a method consistent with the principles of
sub. (3), except that any extra premiums charged because of impairments or special hazards shall be disregarded in the determination of modified net premiums:
623.06(4)(a)
(a) Life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums.
623.06(4)(b)
(b) Group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section
408 of the internal revenue code, as amended.
623.06(4)(c)
(c) Disability and accidental death benefits in all policies and contracts.
623.06(4)(d)
(d) All other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts.
623.06(4m)
(4m) This subsection applies to all annuity and pure endowment contracts other than group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section
408 of the Internal Revenue Code. Reserves according to the commissioners annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefits in such contracts, shall be the greatest of the respective excesses of the present values, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits, provided for by such contracts at the end of each respective contract year, over the present value, at the date of valuation, of any future valuation considerations derived from future gross considerations, required by the terms of such contract, that become payable prior to the end of such respective contract year. The future guaranteed benefits shall be determined by using the mortality table, if any, and the interest rate specified in such contracts for determining guaranteed benefits. The valuation considerations are the portions of the respective gross considerations applied under the terms of such contracts to determine nonforfeiture values.
623.06(5)(a)(a) In no event may a company's aggregate reserves for all life insurance policies, excluding disability and accidental death benefits, issued on or after the effective date of this section, be less than the aggregate reserves calculated in accordance with the method set forth in
subs. (3) to
(4m) and
(7) and the mortality table or tables and rate or rates of interest used in calculating nonforfeiture benefits for such policies.
623.06(5)(b)
(b) In no event may a company's aggregate reserves for all policies, contracts and benefits be less than the aggregate reserves determined by a qualified actuary in an opinion under
sub. (1m) (b) 1. to be necessary to make adequate provision for the company's obligations under the policies and contracts.
