Delaware Code Title 18 Sec. 1114B – Computation of minimum standard by calendar year of issue
(a) The interest rates used in determining the minimum standard for the valuation of the following shall be the calendar year statutory valuation interest rates as defined in this section:
(1) Life insurance policies issued in a particular calendar year, on or after the operative date of § 2929(g) of this title;
(2) Individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1984;
(3) Annuities and pure endowments purchased in a particular calendar year on or after January 1, 1984, under group annuity and pure endowment contracts; and
(4) The net increase, if any, in a particular calendar year after January 1, 1984, in amounts held under guaranteed interest contracts.
Terms Used In Delaware Code Title 18 Sec. 1114B
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- Year: means a calendar year, and is equivalent to the words "year of our Lord. See Delaware Code Title 1 Sec. 302
(b) Calendar year statutory valuation interest rates. — (1) The calendar year statutory valuation interest rates, I, shall be determined as follows and the results rounded to the nearer ¼ of 1%
(A) For life insurance:
I = .03 + W R1 – .03 + W 2 R2 – .09
(B) For single premium 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:
I = .03 + WR – .03
Where R1 is the lesser of R and .09, R2 is the greater of R and .09, R is the reference interest rate defined in this section, and is the weighting factor defined in this section;
(C) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis, except as stated in paragraph (b)(1)(B) of this section, the formula for life insurance stated in paragraph (b)(1)(A) of this section shall apply to annuities and guaranteed interest contracts with guarantee durations in excess of 10 years and the formula for single premium immediate annuities stated in paragraph (b)(1)(B) of this section shall apply to annuities and guaranteed interest contracts with guarantee duration of 10 years or less;
(D) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in paragraph (b)(1)(B) of this section shall apply.
(E) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in paragraph (b)(1)(B) of this section shall apply.
(2) However, if the calendar year statutory valuation interest rate for a life insurance policy issued in any calendar year determined without reference to this sentence differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than 1/2 of 1%, the calendar year statutory valuation interest rate for the life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year. For purposes of applying the immediately preceding sentence, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980 (using the reference interest rate defined in 1979) and shall be determined for each subsequent calendar year regardless of when § 2929(g) of this title becomes operative.
(c) Weighting factors. — (1) The weighting factors referred to in the formulas stated above are given in the following tables:
(A) Weighting factors for life insurance:
| Guarantee | |
| ?Duration | Weighting |
| ?Years | Factors |
| 10 or less | .50 |
| More than 10, but not more than 20 | .45 |
| More than 20 | .35 |