IRS SUPPLEMENTS INTEREST RATE SCHEDULES FOR INSURANCE RESERVE COMPUTATION.
Rev. Rul. 99-10; 1999-1 C.B. 671
- Institutional AuthorsInternal Revenue Service
- Cross-Reference
Rev. Rul. 92-19, 1992-1 C.B. 227
- Code Sections
- Subject Area/Tax Topics
- Index Termsinsurance companies, life, reserves
- Industry GroupsInsurance
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 1999-8995 (8 original pages)
- Tax Analysts Electronic Citation1999 TNT 44-9
Rev. Rul. 99-10
[1] For purposes of section 807(d)(4) of the Internal Revenue Code, for taxable years beginning after December 31, 1997, this ruling supplements the schedules of prevailing state assumed interest rates set forth in Rev. Rul. 92-19, 1992-1 C.B. 227. This information is to be used by insurance companies in computing thier reserves for (1) life insurance and supplementary total and permanent disability benefits, (2) individual annuities and pure endowments, and (3) group annuities and pure endowments. As section 807(d)(2)(B) requires that the interest rate used to compute these reserves be the greater of (1) the applicable federal interest rates, or (2) the prevailing state assumed interest rate, the table of applicable federal interest rates in Rev. Rul. 92-19 is also supplemented.
[2] Following are supplements to schedules A, B, C, and D to Part III of Rev. Rul. 92-19, providing prevailing state assumed interest rates for insurance products with different features issued in 1998 and 1999, and a supplement to the table in Part IV of Rev. Rul. 92-19, providing the applicable federal interest rate under section 807(d) for 1998 and 1999. This ruling does not supplement Parts I and II of Rev. Rul. 92-19.
[3] This is the seventh supplement to the interest rates provided in Rev. Rul. 92-19. Earlier supplements were published in Rev. Rul. 93-58, 1993-2 C.B. 241 (interest rates for insurance products issued in 1992 and 1993), Rev. Rul. 94-11, 1994-1 C.B. 196 (1993 and 1994), Rev. Rul. 95-4, 1995-1 C.B. 141 (1994 and 1995), Rev. Rul. 96-2, 1996-1 C.B. 141 (1995 and 1996), Rev. Rul. 97-2, 1997-1 C.B. 8 (1996 and 1997), and Rev. Rul. 98-2, 1998-2 I.R.B. 15 (1997 and 1998).
PART III. PREVAILING STATE ASSUMED INTEREST RATES -- PRODUCTS
ISSUED IN YEARS AFTER 1982. /*/
SCHEDULE A
STATUTORY VALUATION INTEREST RATES BASED ON THE 1980 AMENDMENTS
TO THE NAIC STANDARD VALUATION LAW
A. Life insurance valuation:
Guarantee Duration Calendar Year
(years) of Issue
1999
10 or fewer 5.00 /**/
More than 10 but not more than 20 4.75 /**/
More than 20 4.50 /**/
Source: Rates calculated from the monthly averages, ending June 30, 1998, of Moody's Corporate Bond Yield Average -- Monthly Average Corporates.
FOOTNOTE TO TABLES
/*/ The terms used in the schedules in this ruling and in Part III of Rev. Rul. 92-19 are those used in the Standard Valuation Law; the terms are defined in Rev. Rul. 92-19.
/**/ As the applicable federal interest rate for 1999 of 6.30 percent exceeds this prevailing state assumed interest rate, the interest rate to be used for this product under section 807 is 6.30 percent.
PART III, SCHEDULE B
STATUTORY VALUATION INTEREST RATES BASED ON THE 1980 AMENDMENTS TO
THE NAIC STANDARD VALUATION LAW
B. Single premium immediate annuities and annuity benefits involving
life contingencies arising from other annuities with cash settlement
options and from guaranteed interest contracts with cash settlement
options:
Calendar Year of Issue Valuation Interest Rate
1998 6.25 /*/
Source: Rates calculated from the monthly averages, ending June 30, 1998, of Moody's Corporate Bond Yield Average -- Monthly Average Corporates. The terms used in this schedule are those used in the Standard Valuation Law as defined in Rev. Rul. 92-19.
FOOTNOTE TO TABLE
/*/ As this prevailling state assumed interest does not exceed the applicable federal interest rate for 1998 of 6.31 percent, the applicable federal interest rate of 6.31 percent is to be used for this product under section 807.
PART III, SCHEDULE C16 -- 1998
STATUTORY VALUATION INTEREST RATES BASED ON NAIC
STANDARD VALUATION LAW FOR 1998 CALENDAR YEAR BUSINESS
GOVERNED BY THE 1980 AMENDMENTS
C. Valuation interest rates for other annuities and guaranteed
interest contracts that are valued on an issue year basis:
Cash Future Guarantee Valuation Interest Rate
Settlement Interest Duration For Plan Type
Options? Guarantee? (years) A B C
____________________________________________________________________
Yes Yes 5 or fewer 6.25* 5.50* 5.00*
More than 5,
but not more
than 10 6.00* 5.50* 5.00*
More than 10,
but not more
than 20 5.75* 5.00* 4.75*
More than 20 4.75* 4.50* 4.50*
Yes No 5 or fewer 6.50* 5.75* 5.25*
More than 5,
but not more
than 10 6.25* 5.75* 5.25*
More than 10,
but not more
than 20 6.00* 5.25* 5.00*
More than 20 5.00* 4.75* 4.75*
Yes Yes or No 5 or fewer 6.25* not applicable
More than 5,
but not more
than 10 6.00* not applicable
More than 10,
but not more
than 20 5.75* not applicable
More than 20 4.75* not applicable
_____________________________________________________________________
Source: Rates calculated from the monthly averages, ending June 30, 1998 of Moody's Corporate Bond Yield Average -- Monthly Average Corporates.
FOOTNOTE TO TABLE
/*/ As the applicable federal interest rate for 1998 of 6.31 percent exceeds this prevailing state assumed interest rate, the interest rate to be used for this product under section 807 is 6.31 percent.
PART III, SCHEDULE D16 -- 1998
STATUTORY VALUATION INTEREST RATES BASED ON NAIC
STANDARD VALUATION LAW FOR 1998 CALENDAR YEAR BUSINESS
GOVERNED BY THE 1980 AMENDMENTS
D. Valuation interest rates for other annuities and guaranteed
interest contracts that are contracts with cash settlement options
and that are valued on a change in fund basis:
Cash Future Guarantee Valuation Interest Rate
Settlement Interest Duration For Plan Type
Options? Guarantee? (years) A B C
____________________________________________________________________
Yes Yes 5 or fewer 7.00 6.50 5.25*
More than 5,
but not more
than 10 6.75 6.50 5.25*
More than 10,
but not more
than 20 6.25* 6.00* 5.00*
Yes No More than 20 5.50* 5.50* 4.75*
5 or fewer 7.00 6.75 5.50*
More than 5,
but not more
than 10 7.00 6.75 5.50*
More than 10,
but not more
than 20 6.50 6.25* 5.25*
More than 20 5.75* 5.75* 4.75*
_____________________________________________________________________
Source: Rates calculated from the monthly averages, ending June 30, 1998, of Moody's Corporate Bond Yield Average -- Monthly Average Corporates.
FOOTNOTE TO TABLE
/*/ As the applicable federal interest rate for 1998 of 6.31 percent exceeds this prevailing state assumed interest rate, the interest rate to be used for this product under section 807 is 6.31 percent.
- Institutional AuthorsInternal Revenue Service
- Cross-Reference
Rev. Rul. 92-19, 1992-1 C.B. 227
- Code Sections
- Subject Area/Tax Topics
- Index Termsinsurance companies, life, reserves
- Industry GroupsInsurance
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 1999-8995 (8 original pages)
- Tax Analysts Electronic Citation1999 TNT 44-9
