Bulletin No. 02-15

 

To: All Domestic Life Insurance Companies

and Charitable Annuity Societies

From: Holly C. Bakke

Commissioner

Subject: Maximum Reserve Valuation and Nonforfeiture Rates

In accordance with N.J.S.A. 17B:19-8 and N.J.S.A. 17B:25-19, the attached table shows the rates of interest to be used for determining minimum valuation standards and nonforfeiture values applicable to life insurance policies issued in 1982 through 2003 and the annuity contracts issued or undergoing a change in fund in 1981 through 2002. With respect to benefits which are subject to the provisions of N.J.S.A. 17B:25-19, the rates shown are applicable for those benefits under life insurance policies issued in a particular calendar year on or after the operative date provided for at N.J.S.A. 17B:25-19.h(xi).

Requests for additional copies of the table should be directed to:

Nancy Hritz

Chief, Valuation Bureau

Life and Health Division

Department of Banking and Insurance

P.O. Box 325

Trenton, New Jersey 08625-0325

Phone: (609) 292-5427 ext. 50319

Fax: (609) 633-0527

E-Mail: nancy.hritz@dobi.state.nj.us

The bulletin can also be found at the Department's web site:

http://www.state.nj.us/dobi/insmnu.shtml

 

8/16/02 /s/Holly C. Bakke

Date Holly C. Bakke

Commissioner

 

Statutory Calendar Year Valuation and Nonforfeiture Interest Rates

A. Life Insurance

       

Guarantee Duration (Years)

Calendar Year

Valuation Interest Rates

Nonforfeiture Interest Rate

10 or less

82

6.75

8.50

 

83 - 86

7.25

9.00

 

87

6.50

8.25

 

88 - 93

6.00

7.50

 

94 - 98

5.50

7.00

 

99 - 03

5.00

6.25

       

More than 10, not

82

6.25

7.75

more than 20

83 - 86

6.75

8.50

 

87 - 93

6.00

7.50

 

94 - 98

5.25

6.50

 

99 03

4.75

6.00

       

More than 20

82

5.50

7.00

 

83 86

6.00

7.50

 

87 92

5.50

7.00

 

93 94

5.00

6.25

 

95 03

4.50

5.75

B. Single stipulated payment 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.

 

Calendar Year

Valuation Interest Rates

 
 

81

11.50

 
 

82

13.25

 
 

83 84

11.25

 
 

85

11.00

 
 

86

9.25

 
 

87

8.00

 
 

88 89

8.75

 
 

90 91

8.25

 
 

92

7.75

 
 

93

7.00

 
 

94

6.50

 
 

95

7.25

 
 

96 97

6.75

 
 

98 99

6.25

 
 

2000

7.00

 
 

2001

6.75

 
 

2002

6.50

 

C. Other Annuities and Guaranteed Interest Contracts

Contracts issued on an Issue Year Basis

Cash Settlement Options?

Future Interest Guarantee?

Guarantee Duration (Years)

Calendar Year

Valuation Interest Rate For Plan Type

A B C

Yes

Yes

5 or less

81

11.50

9.50

8.25

     

82

13.25

10.50

9.25

     

83

11.25

9.25

8.25

     

84

11.25

9.25

8.00

     

85

11.00

7.00

8.00

     

86

9.25

7.75

6.75

     

87

8.00

6.75

6.25

     

88

8.75

7.50

6.75

     

89

8.75

7.25

6.50

     

90 91

8.25

7.00

6.25

     

92

7.75

6.50

6.00

     

93

7.00

6.00

5.50

     

94

6.50

5.75

5.25

     

95

7.25

6.25

5.75

     

96 97

6.75

5.75

5.25

     

98 99

6.25

5.50

5.00

     

2000

7.00

6.00

5.50

     

2001

6.75

5.75

5.25

     

2002

6.50

5.75

5.25

             
   

more than

81

11.00

9.50

8.25

   

5 but not

82

12.50

10.50

9.25

   

more than

83

10.75

9.25

8.25

   

10

84

10.75

9.25

8.00

     

85

10.50

9.00

8.00

     

86

8.75

7.75

6.75

     

87

7.75

6.75

6.25

     

88

8.50

7.50

6.75

     

89

8.25

7.25

6.50

     

90 91

8.00

7.00

6.25

     

92

7.50

6.50

6.00

     

93

6.75

6.00

5.50

     

94

6.50

5.75

5.25

     

95

7.00

6.25

5.75

     

96 97

6.50

5.75

5.25

     

98 99

6.00

5.50

5.00

     

2000

6.75

6.00

5.50

     

2001

6.50

5.75

5.25

     

2002

6.25

5.75

5.25

             
   

more than

81

7.75

6.75

6.25

   

10 but not

82

8.50

7.25

6.75

   

more than

83 84

8.25

7.00

6.75

   

20

85

8.25

7.00

6.50

     

86

7.50

6.50

6.00

     

87

7.00

6.00

5.75

     

88 89

7.25

6.25

6.00

C. Other Annuities and Guaranteed Interest Contracts - cont'd

Contracts issued on an Issue Year Basis

Cash Settlement Options?

Future Interest Guarantee?

Guarantee Duration (Years)

Calendar Year

Valuation Interest Rate For Plan Type

A B C

Yes

Yes

more than

90 91

7.00

6.25

5.75

   

10 but not

92

6.75

6.00

5.75

   

more than

93

6.25

5.50

5.25

   

20

94

6.00

5.25

5.00

     

95

6.25

5.50

5.25

     

96

6.00

5.25

5.00

     

97

6.00

5.25

5.25

     

98

5.75

5.00

4.75

     

99

5.50

5.00

4.75

     

2000

5.75

5.25

5.00

     

01 - 02

6.00

5.25

5.00

             

more than

81

6.25

5.50

5.50

   

20

82

6.75

6.00

6.00

     

83 - 84

6.75

5.75

5.75

     

85

6.50

5.75

5.75

     

86

6.00

5.50

5.75

     

87

5.75

5.25

5.50

     

88 - 89

6.00

5.25

5.25

     

90 - 91

5.75

5.25

5.25

     

92

5.75

5.00

5.00

     

93

5.25

4.75

4.75

     

94

5.00

4.50

4.50

     

95

5.25

4.75

4.75

     

96

5.00

4.50

4.50

     

97

5.25

4.75

4.75

     

98 99

4.75

4.50

4.50

     

2000-02

5.00

4.50

4.50

             

Yes

No

5 or less

81

12.00

10.00

9.00

     

82

13.75

11.25

10.00

     

83

11.75

9.75

8.75

     

84

11.75

9.75

8.50

     

85

11.50

9.50

8.50

     

86

9.50

8.00

7.25

     

87

8.50

7.25

6.50

     

88

9.25

7.75

7.00

     

89

9.00

7.50

7.00

     

90

8.50

7.25

6.50

     

91

8.75

7.25

6.75

     

92

8.00

6.75

6.25

     

93

7.25

6.25

5.75

     

94

6.75

6.00

5.50

     

95

7.50

6.50

6.00

     

96

6.75

6.00

5.50

     

97

7.00

6.00

5.50

     

98 99

6.50

5.75

5.25

     

2000

7.25

6.25

5.75

     

2001

7.00

6.00

5.50

     

2002

6.75

6.00

5.50

C. Other Annuities and Guaranteed Interest Contracts - cont'd

Contracts issued on an Issue Year Basis

 

Cash Settlement Options?

Future Interest Guarantee?

Guarantee Duration (Years)

Calendar Year

Valuation Interest Rate For Plan Type

A B C

Yes

No

more than

81

11.50

10.00

9.00

   

5 but not

82

13.25

11.25

10.00

   

more than

83

11.25

9.75

8.75

   

10

84

11.25

9.75

8.50

     

85

11.00

9.50

8.50

     

86

9.25

8.00

7.25

     

87

8.00

7.25

6.50

     

88

8.75

7.75

7.00

     

89

8.75

7.50

7.00

     

90

8.25

7.25

6.50

     

91

8.25

7.25

6.75

     

92

7.75

6.75

6.25

     

93

7.00

6.25

5.75

     

94

6.50

6.00

5.50

     

95

7.25

6.50

6.00

     

96 97

6.75

6.00

5.50

     

98

6.25

5.75

5.25

     

99

6.25

5.50

5.25

     

2000

7.00

6.25

5.75

     

2001

6.75

6.00

5.50

     

2002

6.50

6.00

5.50

             

more than

81

8.00

7.00

6.75

   

10 but not

82

8.75

7.50

7.25

   

more than

83 - 84

8.75

7.50

7.00

   

20

85

8.50

7.50

7.00

     

86

7.75

6.75

6.50

     

87

7.25

6.50

6.00

     

88 - 91

7.50

6.50

6.25

     

92

7.00

6.25

6.00

     

93

6.50

5.75

5.50

     

94

6.25

5.50

5.25

     

95

6.50

5.75

5.50

     

96 - 97

6.25

5.50

5.25

     

98

6.00

5.25

5.00

     

99

5.75

5.25

5.00

     

2000

6.00

5.50

5.25

     

2001

6.25

5.50

5.25

     

2002

6.00

5.50

5.25

     

more than

81

6.75

6.00

6.00

   

20

82

7.25

6.25

6.25

     

83- 85

7.00

6.25

6.25

     

86

6.50

5.75

5.75

     

87

6.00

5.50

5.50

     

88

6.25

5.75

5.75

     

89 - 91

6.25

5.50

5.50

     

92

6.00

5.25

5.25

     

93

5.50

5.00

5.00

C. Other Annuities and Guaranteed Interest Contracts - cont'd

Contracts issued on an Issue Year Basis

Cash Settlement Options?

Future Interest Guarantee?

Guarantee Duration (Years)

Calendar Year

Valuation Interest Rate For Plan Type

A B C

Yes

No

more than

94

5.25

4.75

4.75

   

20

95

5.50

5.00

5.00

     

96

5.25

4.75

4.75

     

97

5.25

5.00

5.00

     

98

5.00

4.75

4.75

     

99

5.00

4.50

4.50

     

2000-02

5.25

4.75

4.75

           

No

Yes or

5 or less

81

11.50

NOT

 

No

 

82

13.25

APPLICABLE

     

83 - 84

11.25

FOR ANY

     

85

11.00

GUARANTEE

     

86

9.25

DURATION

     

87

8.00

FOR PLAN

     

88 - 89

8.75

TYPES

     

90 - 91

8.25

B AND C

     

92

7.75

 
     

93

7.00

 
     

94

6.50

 
     

95

7.25

 
     

96- 97

6.75

 
     

98 99

6.25

   
     

2000

7.00

   
     

2001

6.75

   
     

2002

6.50

   
             

more than

81

11.00

   
 

5 but not

82

12.50

   
   

more than

83 84

10.75

   
   

10

85

10.50

   
     

86

8.75

   
     

87

7.75

   
     

88

8.50

   
     

89

8.25

   
     

90 91

8.00

   
     

92

7.50

   
     

93

6.75

   
     

94

6.50

   
     

95

7.00

   
     

96 97

6.50

   
     

98 99

6.00

   
     

2000

6.75

   
     

2001

6.50

   
     

2002

6.25

   
             

more than

81

10.00

 

10 but not

82

11.25

   

more than

83 84

9.75

   

20

85

9.50

     

86

8.00

C. Other Annuities and Guaranteed Interest Contracts - cont'd

Contracts issued on an Issue Year Basis

Cash Settlement Options?

Future Interest Guarantee?

Guarantee Duration (Years)

Calendar Year

Valuation Interest Rate For Plan Type

A B C

No

Yes or

more than

87

7.25

 
 

No

10 but not

88

7.75

 
   

more than

89

7.50

 
   

20

90 91

7.25

 
     

92

6.75

 
     

93

6.25

 
     

94

6.00

 
     

95

6.50

 
     

96 97

6.00

 
     

98

5.75

 
     

99

5.50

 
     

2000

6.25

 
     

2002

6.00

 
           
   

more than

81

7.75

NOT

   

20

82

8.75

APPLICABLE

     

83 - 84

7.75

FOR ANY

     

85

7.50

GUARANTEE

     

86

6.50

DURATION

     

87

6.00

FOR PLAN

     

88 - 89

6.25

TYPES

     

90 - 91

6.00

B AND C

     

92

5.75

 
     

93

5.25

 
     

94

5.00

 
     

95

5.50

 
     

96

5.00

 
     

97

5.25

 
     

98 99

4.75

 
     

2000

5.25

 
     

2002

5.00

 

D. Other Annuities and Guaranteed Interest Contracts

Contracts Valued on a Change in Fund Basis

(Only contracts with cash settlement options may be valued on change in fund basis)

Cash Settlement Options?

Future Interest Guarantee?

Guarantee Duration (Years)

Calendar Year

Valuation Interest Rate For Plan Type

A B C

Yes

Yes

5 or less

81

13.25

12.00

9.00

     

82

15.00

13.75

10.00

     

83

12.75

11.75

8.75

     

84

12.75

11.75

8.50

     

85

12.50

11.50

8.50

     

86

10.25

9.50

7.25

     

87

9.00

8.50

6.50

     

88

10.00

9.25

7.00

 

D. Other Annuities and Guaranteed Interest Contracts

Contracts Valued on a Change in Fund Basis

(Only contracts with cash settlement options may be valued on change in fund basis)

Cash Settlement Options?

Future Interest Guarantee?

Guarantee Duration (Years)

Calendar Year

Valuation Interest Rate For Plan Type

A B C

Yes

Yes

5 or less

89

9.75

9.00

7.00

     

90

9.25

8.50

6.50

     

91

9.25

8.75

6.75

     

92

8.50

8.00

6.25

     

93

7.75

7.25

5.75

     

94

7.25

6.75

5.50

     

95

8.25

7.50

6.00

     

96

7.25

6.75

5.50

     

97

7.50

7.00

5.50

     

98

7.00

6.50

5.25

     

99

6.75

6.25

5.25

     

2000

7.75

7.25

5.75

     

2001

7.50

7.00

5.50

     

2002

7.25

6.75

5.50

             
   

more than

81

12.75

12.00

9.00

   

5 but not

82

14.50

13.75

10.00

   

more than

83

12.25

11.75

8.75

   

10

84

12.25

11.75

8.50

     

85

12.00

11.50

8.50

     

86

10.00

9.50

7.25

     

87

8.75

8.50

6.50

     

88

9.50

9.25

7.00

     

89

9.50

9.00

7.00

   

90

8.75

8.50

6.50

     

91

9.00

8.75

6.75

     

92

8.25

8.00

6.25

     

93

7.50

7.25

5.75

   

94

7.00

6.75

5.50

   

95

8.00

7.50

6.00

     

96

7.00

6.75

5.50

     

97

7.25

7.00

5.50

     

98

6.75

6.50

5.25

     

99

6.50

6.25

5.25

     

2000

7.50

7.25

5.75

     

2001

7.25

7.00

5.50

     

2002

7.00

6.75

5.50

             
   

more than

81

11.50

11.00

8.25

   

10 but not

82

13.25

12.50

9.25

   

more than

83

11.25

10.75

8.25

   

20

84

11.25

10.75

8.00

     

85

11.00

10.50

8.00

     

86

9.25

8.75

6.75

     

87

8.00

7.75

6.25

     

88

8.75

8.50

6.75

     

89

8.75

8.25

6.50

90 - 91

8.25

8.00

6.25

     

92

7.75

7.50

6.00

 

D. Other Annuities and Guaranteed Interest Contracts - cont'd

Contracts Valued on a Change in Fund Basis

(Only contracts with cash settlement options may be valued on change in fund basis)

Cash Settlement Options?

Future Interest Guarantee?

Guarantee Duration (Years)

Calendar Year

Valuation Interest Rate For Plan Type

A B C

Yes

Yes

more than

93

7.00

6.75

5.50

   

10 but not

94

6.50

6.50

5.25

   

more than

95

7.25

7.00

5.75

   

20

96 - 97

6.75

6.50

5.25

     

98 99

6.25

6.00

5.00

     

2000

7.00

6.75

5.50

     

2001

6.75

6.50

5.25

     

2002

6.50

6.25

5.25

             
   

more than

81

9.50

9.50

7.25

   

20

82

10.50

10.50

8.00

     

83

9.25

9.25

7.25

     

84

9.25

9.25

7.00

     

85

9.00

9.00

7.00

     

86

7.75

7.75

6.00

     

87

6.75

6.75

5.50

   

88

7.50

7.50

6.00

     

89

7.25

7.25

5.75

     

90

7.00

7.00

5.50

     

91

7.00

7.00

5.75

     

92

6.50

6.50

5.25

     

93

6.00

6.00

5.00

     

94

5.75

5.75

4.75

     

95

6.25

6.25

5.25

     

96

5.75

5.75

4.75

     

97

5.75

5.75

5.00

     

98

5.50

5.50

4.75

     

99

5.50

5.50

4.50

     

2000

6.00

6.00

5.00

     

2001

5.75

5.75

5.00

     

2002

5.75

5.75

4.75

             

Yes

No

5 or less

81

13.75

12.75

9.50

     

82

15.75

14.50

10.50

     

83

13.50

12.25

9.25

     

84

13.25

12.25

9.25

     

85

13.00

12.00

9.00

     

86

10.75

10.00

7.75

     

87

9.50

8.75

6.75

     

88

10.25

9.50

7.50

     

89

10.00

9.50

7.25

     

90

9.50

8.75

7.00

     

91

9.75

9.00

7.00

     

92

9.00

8.25

6.50

     

93

8.25

7.50

6.00

     

94

7.50

7.00

5.75

     

95

8.50

8.00

6.25

     

96

7.50

7.00

5.75

     

97

7.75

7.25

5.75

 

D. Other Annuities and Guaranteed Interest Contracts - cont'd

Contracts Valued on a Change in Fund Basis

(Only contracts with cash settlement options may be valued on change in fund basis)

Cash Settlement Options?

Future Interest Guarantee?

Guarantee Duration (Years)

Calendar Year

Valuation Interest Rate For Plan Type

A B C

Yes

No

5 or less

98

7.00

6.75

5.50

     

99

7.00

6.50

5.50

     

2000

8.00

7.50

6.00

     

2001

7.75

7.25

5.75

     

2002

7.50

7.00

5.75

             
   

more than

81

13.25

12.00

9.00

   

5 but not

82

15.00

14.50

10.50

   

more than

83 - 84

12.75

12.25

9.25

   

10

85

12.50

12.00

9.00

     

86

10.25

10.00

7.75

     

87

9.00

8.75

6.75

     

88

10.00

9.50

7.50

     

89

9.75

9.50

7.25

     

90

9.25

8.75

7.00

     

91

9.25

9.00

7.00

     

92

8.50

8.25

6.50

     

93

7.75

7.50

6.00

     

94

7.25

7.00

5.75

     

95

8.25

8.00

6.25

     

96

7.25

7.00

5.75

     

97

7.50

7.25

5.75

     

98

7.00

6.75

5.50

     

99

6.75

6.50

5.50

     

2000

7.75

7.50

6.00

     

2001

7.50

7.25

5.75

     

2002

7.25

7.00

5.75

             
   

more than

81

12.00

11.50

9.00

   

10 but not

82

13.75

13.25

10.00

   

more than

83

11.75

11.25

8.75

   

20

84

11.75

11.25

8.50

     

85

11.50

11.00

8.50

     

86

9.50

9.25

7.25

     

87

8.50

8.00

6.50

     

88

9.25

8.75

7.00

     

89

9.00

8.75

7.00

     

90

8.50

8.25

6.50

     

91

8.75

8.25

6.75

     

92

8.00

7.75

6.25

     

93

7.25

7.00

5.75

     

94

6.75

6.50

5.50

     

95

7.50

7.25

6.00

     

96

6.75

6.75

5.50

     

97

7.00

6.75

5.50

     

98

6.50

6.25

5.25

     

99

6.25

6.25

5.25

     

2000

7.25

7.00

5.75

     

2001

7.00

6.75

5.50

     

2002

6.75

6.50

5.50

D. Other Annuities and Guaranteed Interest Contracts - cont'd

Contracts Valued on a Change in Fund Basis

(Only contracts with cash settlement options may be valued on change in fund basis)

Cash Settlement Options?

Future Interest Guarantee?

Guarantee Duration (Years)

Calendar Year

Valuation Interest Rate For Plan Type

A B C

Yes

No

more than

81

10.00

10.00

7.75

   

20

82

11.25

11.25

8.75

     

83

9.75

9.75

7.75

     

84

9.75

9.75

7.50

     

85

9.50

9.50

7.50

     

86

8.00

8.00

6.50

     

87

7.25

7.25

6.00

     

88

7.75

7.75

6.25

     

89

7.50

7.50

6.25

     

90 - 91

7.25

7.25

6.00

     

92

6.75

6.75

5.75

     

93

6.25

6.25

5.25

     

94

6.00

6.00

5.00

     

95

6.50

6.50

5.50

     

96

6.00

6.00

5.00

     

97

6.00

6.00

5.25

     

98

5.75

5.75

4.75

     

99

5.50

5.50

4.75

     

2000

6.25

6.25

5.25

     

01 - 02

6.00

6.00

5.00

             
             
             

Definitions

 

 

Guarantee Duration:

For life insurance, the guarantee duration is 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 or nonforfeiture values or both which are guaranteed in the original policy.

For annuities with cash settlement options and guaranteed interest contracts with cash settlement options other than single stipulated payment 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 guarantee duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee durations in excess of 20 years.

For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guarantee duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence.

Plan Type:

Type A - At any time policyholder may withdraw funds only (1) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer, or (2) without such adjustment but in installments over 5 years or more, or (3) as an immediate life annuity, or (4) no withdrawal permitted.

Type B - Before expiration of the interest rate guarantee, policyholder may withdraw funds only (1) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer, or (2) without such adjustment but in installments over 5 years or more, or (3) no withdrawal permitted. At the end of interest rate guarantee, funds may be withdrawn without such adjustment in a single sum or installments over less than 5 years.

Type C - Policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than 5 years either (1) without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer, or (2) subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund.

Issue Year Basis

An issue year basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire 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.

 

 

 

Change in Fund Basis

The change in fund basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund.

An insurer may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue year basis or on 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.