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CA Department of Insurance

Bulletin 99-5

STATE OF CALIFORNIA
DEPARTMENT OF INSURANCE

Ronald Reagan Building
300 South Spring Street, 14th Floor
Los Angeles, California 94105

Bulletin No. 99-5
September 1, 1999

TO:          All Admitted Life and Disability Insurers and Other Interested Persons

SUBJECT:  Rates of Interest for Minimum Reserves and Nonforfeiture Values - 2000 Life Insurance; 1999 Annuities

This replaces Bulletin No. 98-3.

Attached is Table 1 showing the rates of interest to be used for determining minimum reserves and nonforfeiture values according to Sections 10163.2(i) and 10489.4 of the California Insurance Code applicable to life insurance policies issued in 2000 and annuity contracts issued or undergoing a change in fund in 1999. Also shown in Table 1 are the interest rates applicable to life insurance policies issued in 1982 through 2000 and to annuity contracts issued or funded in 1981 through 1999.

The Monthly Average of the Corporate Yield on seasoned Corporate bonds, published by Moody's Investors Services, Inc. used in these calculations are those for the period ending June 30 for each calendar year shown. These were:

Calendar

Average over period ending June 30

Year

Of a 12 Month Period

Of a 36-Month Period

     

1979

9.49%

8.92%

1980

11.51

9.89

1981

13.71

11.57

1982

15.70

13.64

1983

13.39

14.26

1984

13.22

14.10

1985

13.01

13.21

1986

10.75

12.33

1987

9.40

11.05

1988

10.32

10.15

1989

10.09

9.93

1990

9.52

9.97

1991

9.63

9.74

1992

8.88

9.34

1993

8.13

8.88

1994

7.52

8.18

1995

8.42

8.03

1996

7.55

7.83

1997

7.74

7.90

1998

7.11

7.47

1999

6.96

7.27

Appendix A is a brief background outline of the basis for the calculation of the interest rates shown in Table 1.

CHUCK QUACKENBUSH
Insurance Commissioner
TABLE 1 - STATUTORY CALENDAR YEAR INTEREST RATES BASED ON NAIC STANDARD VALUATION AND NONFORFEITURE LAWS

APPENDIX A

Any questions regarding this bulletin should be addressed to:


W. Harold Phillips, FSA, MAAA
Senior Life Actuary
California Department of Insurance
Ronald Reagan State Building
300 South Spring Street, South Tower
Los Angeles, CA 90013
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