PART VM-22: Maximum Statutory Valuation Interest Rates For Income Annuities of Contents Section 1. Background Section 2. Purpose and Scope Section 3. Selection of the Statutory Maximum Valuation Interest Rate Appendix 1: Re-determination of Weights Appendix 2: Re-determination of Default Appendix 3: Re-determination of Spreads Appendix 4: Re-determination of Reference Rates Appendix 5: Re-determination of Daily and Average Daily Corporate Rates Appendix 6: Calculation of Statutory Maximum Valuation Interest Rates Section 1: Background Over time, the NAIC intends for VM-22 to contain the valuation requirements for all annuity contracts not covered by VM-21. For now, the purpose of VM-22 is limited to prescribing the valuation interest rates, but not the valuation methodology, to be used for some, but not all, of the contracts that are within the intended scope of VM-22. All reserve requirements for non-variable annuities that are not within the defined scope of VM-22 (Section 2 below) are contained in Appendices VM-A and VM-C. The requirements of this Part are not intended to affect the reserve requirements for deferred annuities in the accumulation phase, except as provided in Section 2.C. The VM-22 statutory maximum valuation interest are published by the NAIC. The process of calculating the rates involves a set of spreads, a set of weights, a set of default costs, a set of corporate bond rates and a set of average US Treasury rates. The process of selecting the appropriate rate from the published rates is described in Section 3. The processes for re-determining the weights, default costs, spreads, reference rates and daily corporate rates are described and sample calculations illustrated, in Appendices 1, 2, 3, 4 and 5, respectively. The process of calculating the statutory maximum valuation interest rates is described in Appendix 6. Information that is downloaded, published or illustrated must of necessity be rounded. Users who wish to perform the calculations illustrated herein should note that, when calculating a daily or quarterly valuation rate, no rounding should occur before the final step. Section 2. Purpose and
PART VM-22: Maximum Statutory Valuation Interest Rates For Income Annuities of Contents Section 1. Background Section 2. Purpose and Scope Section 3. Selection of the Statutory Maximum Valuation Interest Rate Appendix 1: Re-determination of Weights Appendix 2: Re-determination of Default Appendix 3: Re-determination of Spreads Appendix 4: Re-determination of Reference Rates Appendix 5: Re-determination of Daily and Average Daily Corporate Rates Appendix 6: Calculation of Statutory Maximum Valuation Interest Rates Section 1: Background Over time, the NAIC intends for VM-22 to contain the valuation requirements for all annuity contracts not covered by VM-21. For now, the purpose of VM-22 is limited to prescribing the valuation interest rates, but not the valuation methodology, to be used for some, but not all, of the contracts that are within the intended scope of VM-22. All reserve requirements for non-variable annuities that are not within the defined scope of VM-22 (Section 2 below) are contained in Appendices VM-A and VM-C. The requirements of this Part are not intended to affect the reserve requirements for deferred annuities in the accumulation phase, except as provided in Section 2.C. The VM-22 statutory maximum valuation interest are published by the NAIC. The process of calculating the rates involves a set of spreads, a set of weights, a set of default costs, a set of corporate bond rates and a set of average US Treasury rates. The process of selecting the appropriate rate from the published rates is described in Section 3. The processes for re-determining the weights, default costs, spreads, reference rates and daily corporate rates are described and sample calculations illustrated, in Appendices 1, 2, 3, 4 and 5, respectively. The process of calculating the statutory maximum valuation interest rates is described in Appendix 6. Information that is downloaded, published or illustrated must of necessity be rounded. Users who wish to perform the calculations illustrated herein should note that, when calculating a daily or quarterly valuation rate, no rounding should occur before the final step. Section 2. Purpose and
cmte_a_latf_vm22sg_180312_revised_vm_22_clean.docx