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INSURERS: BULLETIN 2004-02
July 30, 2004
To: All Grants and Annuities Societies Operating in the State of California and Other Interested Persons Subject: Reserve Basis and Reasonably Commensurate Value (RCV) of Annuities
Effective January 1, 2005 the minimum reserve basis for life annuities issued on or after this date by Grants and Annuities Societies shall be the Annuity 2000 Mortality Table at 4½% interest. [For annuities issued between January 1, 1992 and December 31, 2004, the minimum reserve basis will continue to be the a-1983 Table at 6% interest. For issues prior to January 1, 1992 the minimum reserve basis is the 1937 Standard Annuity Table at 2½%.]
Section 11521 of the California Insurance Code authorizes the Commissioner to prescribe mortality tables and interest rates from time to time.
Consistent with the above, the Reasonably Commensurate Value (RCV) required under California Insurance Code § 11523(e) shall not exceed by more than 15% the net single premium calculated by this new mortality table and interest rate, for life annuities issued on or after January 1, 2005.
Single Life and Joint & Last Survivor RCVs on the new basis have been posted on the Department’s website and can be accessed by following this link.
RCVs can be obtained either by inputting the gender & ages on the worksheets posted or, alternatively, tables of values can be downloaded and printed.
Deferred annuity RCVs will continue to be available upon request to the Department of Insurance, Financial Analysis Division.
- Click here to download this bulletin in MS-Word format