New York State seal

August 9, 1991

SUBJECT: INSURANCE

WITHDRAWN

TO: ALL AUTHORIZED LIFE INSURANCE COMPANIES, ACCREDITED LIFE REINSURERS, FRATERNAL BENEFIT SOCIETIES AND CHARITABLE ANNUITY SOCIETIES

ATTN: CHIEF ACTUARY OR CONSULTING ACTUARY AND CHIEF FINANCIAL OFFICER

SUBJECT: MAXIMUM RESERVE VALUATION AND MAXIMUM LIFE POLICY NONFORFEITURE INTEREST RATES UNDER SECTIONS 4217, 4218, AND 4221(k) OF THE NEW YORK INSURANCE LAWS, AS AMNED IN 1982, 1983, 1985, 1986, 1987, 1988, AND 1990

Attached hereto is an outline, providing maximum reserve valuation and maximum life policy nonforfeiture interest rates for new issues, new purchases or changes in fund (as defined) for years 1982 through 1991 (and other years where shown), under Sections 4217, 4218 and 4221(k) of the New York Insurance Laws, as amended in 1982, 1983, 1985, 1986, 1987, 1988, and 1990.

This Circular Letter is for informational purposes, as an aid in complying with the law.

Should any person have any question or comment, in regard to this matter, please contact Mr. Robert J. Callahan, Chief of the Actuarial Valuation Bureau (518-474-7929) or Mr. Paul H. Schoener (518-474-7929) or Mr. Richard C. Dielensnyder (518-474-6605).

Unless you inform Mr. Dielensnyder to the contrary, future editions of this letter will only be sent to the Chief Actuary, or absent such, to the Chief Financial Officer.

Very truly yours,

[SIGNATURE]

Salvatore R. Curiale

Superintendent of. Insurance

CIRCULAR LETTER No. 15 (1991)

MAXIMUM VALUATION AND NONFORFEITURE INTEREST RATES UNDER SECTIONS 4217, 4218 and 4221(k) OF THE NEW YORK INSURANCE LAWS

The maximum valuation and nonforfeiture interest rates, prescribed by Sections 4217 and 4221(k) of the New York Insurance Laws for future years, will vary from year to year depending on Moody's corporate bond yield averages.

The maximum valuation interest rates for issues, purchases and changes-in-fund of years 1982 through 1991 (and other years where shown) are outlined below. The maximum valuation and nonforfeiture interest rates for Ordinary Life Insurance are shown in A on page 2, except for Single Premium Life Insurance (of the kind referred to in Section 4217(c)(4)(B)(vi) as amended by Chapter 302 of the laws of 1987) the maximum valuation interest rates for which are shown in B on page 3.

This Circular Letter is for informational purposes, as an aid in complying with the law.

A. ORDINARY LIFE INSURANCE (Except as covered in B on page 3)

   

 ***Maximum

Maximum

 *Issue

 

Reserve Valuation

Nonforfeiture

Year

 **Guarantee Duration

Interest Rate

Interest Rate

     

# 1980

1958

     

CSO

CSO

1979-81

See Prior Circular Letters

     

1982-83

       

1984

10 Years or Less

7.25%

9.00%

5.50%

 

More than 10 Years, up to 20

6.75

8.50

5.50

 

More than 20 Years

6.00

7.50

5.50

1985

10 Years or Less

7.25%

9.00%

5.50%

 

More than 10 Years, up to 20

6.75

8.50

5.50

 

More than 20 Years

6.00

7.50

5.50

1986

10 Years or Less

7.25%

9.00%

5.50%

 

More than 10 Years; up to 20

6.75

8.50

5.50

 

More than 20 Years

6.00

7.50

5.50

1987

10 Years or less

6.50%

## 8.25%

5.50%

 

More than 10 Years, up to 20

6.00

## 7.50

5.50

 

More than 20 Years

5.50

## 7.00

5.50

1988

10 Years or less

6.00%

## 7.50%

5.50%

 

More than 10 years, up to 20

6.00

## 7.50

5.50

 

More than 20 years

5.50

## 7.00

5.50

1989

10 Years or less

6.00%

7.50%

###

 

More than 10 years, up to 20

6.00

7.50

###

 

More than 20 years

5.50

7.00

###

1990

10 Years or less

6.00%

7.50%

###

 

More than 10 years, up to 20

6.00

7.50

###

 

More than 20 years

5.50

7.00

###

1991

10 Years or less

6.00%

7.50%

###

 

More than 10 years, up to 20

6.00

7.50

###

 

More than 20 years

5.50

7.00

###

1992

10 Years or less

6.00%

7.50%

#

 

More than 10 years, up to 20

6.00

7.50

#

 

More than 20 years

5.50

7.00

#

*See the paragraph at the top of page 11.

**The guarantee duration is the maximum number of

years the life insurance can remain in

force on a basis guaranteed in the policy.

***The maximum reserve valuation interest rate

will be the lesser of the rate as determined

from the above table and the rate actually used

in determining cash values. This applies

to basic reserves under Section 4217, not to the

minimum reserve test under Sect. 4218.

# Applicable on or after the operative date elected

under Section 4221(k)(12). (See the

top paragraph on page 10). These rates do not

apply to policies issued pursuant to

Section 4221(n-1).

# # In accordance with Section 4221(k)(9)(8)(1)

of the New York Insurance Laws, the

nonforfeiture interest rate used for a particular

issue year may not exceed the higher

of the applicable maximum nonforfeiture interest rate

for such particular issue year and

that for the immediately preceeding issue year

(e.g. 1987 issues may use the rate for

1986, 1988 issues may use the rate for 1987).

### See the paragraph at the top of page 11.

As of January 1, 1989,

the 1980 CSO rate must used for all new business.

B. Single Premium Life Insurance of the kind referred to in Section 4217(c)(4)(B)(vi) of the New York Insurance Laws (as amended by Chapter 302 of the laws of 1987). #

   

## Maximum

Year

 **Guaranteed Duration

Reserve Valuation

 

J*4*Interest Rate

       
   

Issue Year

Change-In-Fund

   

Basis

Basis

 
   

Without

With

Without

With

   

AO&M

AO&M

AO&M

AO&M

   

 ***

 ****

 ***

 ****

1982, 1983

See Prior Circular Letters

       
           

1984

10 years or less

7.50%

8.50%

7.75%

9.25%

 

More than 10 yrs, up to 20

7.00

7.00

7.50

8.50

 

More than 20 years

6.25

6.25

6.75

7.50

           

1985

10 years or less

7.50%

8.50

7.75%

9.00%

 

More than 10 yrs, up to 20

7.00

7.00

7.50

8.50

 

More than 20 years

6.25

6.25

6.50

7.50

           

1986

10 years or less

6.75%

7.25%

7.00%

7.75%

 

More than 10 yrs, up to 20

6.50

6.50

6.75

7.25

 

More than 20 years

5.75

5.75

6.00

6.50

           

1987

10 years or less

6.50%

6.50%

6.75%

6.75%

 

More than 10 yrs, up to 20

6.00

6.00

6.50

6.50

 

More than 20 years

5.50

5.50

5.75

6.00

           

1988

10 years or less

6.75%

7.00%

7.00%

7.50%

 

More than 10 yrs, up to 20

6.25

6.25

6.75

7.00

 

More than 20 years

5.75

5.75

6.00

6.25

           

1999

10 years or less

6.50%

7.00%

7.00%

7.25%

 

More than 10 yrs, up to 20

6.25

6.25

6.50

7.00

 

More than 20 years

5.50

5.50

6.00

6.25

           

1990

10 years or less

6.50%

6.50%

6.75%

7.00%

 

More than 10 yrs, up to 20

6.25

6.25

6.50

6.50

 

More than 20 years

5.50

5.50

5.75

6.00

           

1991

10 years or less

6.50%

6.75%

6.75%

7.00%

 

More than 10 yrs, up to 20

6.25

6.25

6.50

6.75

 

More than 20 years

5.50

5.50

5.75

6.00

*See the paragraph at the top of page 11.

**The guarantee duration is the number of years for which

interest rates provided in, or declared pursuant to, a single

premium life insurance policy of the kind referred to in

Section 4217(c)(4)(B)(vi) are guaranteed to exceed the greater

of (1) 6% and (2) the calendar year statutory valuation interest

rate for life insurance policies (other than such single

premium policy) with guarantee durations in excess of 20 years.

***Without an acceptable actuarial opinion and memorandum

(using life insurance formula). Additional restrictions may

apply by Regulation.

****May be used only with an acceptable actuarial opinion and

apply memorandum (using annuity formula).

# Said Chapter 302 amendment became effective, on a mandatory

basis, on January 1, 1989. Any company could have filed a written

notice of prior election.

See paragraph on reserves, for these special single premium life insurance policies on page 11. Also see paragraph, at bottom of page 4.

B. Single Premium Life Insurance of the kind referred to in Section 4217(c)(4)(B)(vi) of the New York Insurance Laws (as amended by Chapter 302 of the laws, of 1987).#

**Guarantee Duration Interest Rate

# # Maximum Reserve Valuation

   

Issue Year Basis

Change-In-Fund

   

Basis

 
   

Without

With

Without

With

   

AO&M

AO&M

AO&M

AO&M

   

***

****

***

****

1982, 1983

See Prior Circular Letters

       

1984

10 years or less.

7.50%

8.50%

7.75%

9.25%

 

More than 10 yrs, up to 20

7.00

7.50

7.50

8.50

 

More than 20 years

6.25

6.25

6.75

7.50

           

1985

10 years or less

7.50%

8.50%

7.75%

9.00%

 

More than 10 yrs, up to 20

7.00

7.00

7.50

8.50

 

More than 20 years

6.25

6.25

6.50

7.50

           

1986

10 years or less

6.75%

7.25%

7.00%

7.75%

 

More than 10 yrs, up to 20

6.50

6.50

6.75

7.25

 

More than 20 years

5.75

5.75

6.00

6.50

           

1987

10 years or less

6.50%

6.50%

6.75%

6.75%

 

More than 10 yrs, up to 20

6.00

6.00

6.50

6.50

 

More than 20 years

5.50

5.50

5.75

6.00

           

1988

10 years or less

6.75%

7.00%

7.00%

7.52%

 

More than 10 yrs, up to 20

6.25

6.25

6.50

7.00

 

More than 20 years

5.75

5.75

6.00

6.25

           

1989

10 years or less

6.50%

7.00%

7.00%

7.25%

 

More than 10 yrs, up to 20

6.25

6.25

6.50

7.00

 

More than 20 years

5.50

5.50

6:00

6.25

           

1990

10 years or less

6.50%

6.50%

6.75%

7.00%

 

More than 10 yrs, up to 20

6.25

6.25

6.50

6.50

 

More than 20 years

5.50

5.50

5.75

6.00

           

1991

10 years or less

6.50%

6.75%

6.75%

7.00%

 

More than 10 yrs, up to 20

6.25

6.25

6.50

6.75

 

More than 20 years

5.50

5.50

5.75

6.00

*See the paragraph at the top of page 11.

**The guarantee duration is the number of

years for which interest rates provided in, or declared

pursuant to, a single premium life insurance policy of the

kind referred to in Section 4217(c)(4)(B)(vi) are guaranteed

to exceed the greater of (1) 6% and (2) the calendar year

statutory valuation interest rate for life insurance policies

(other than such single premium policy) with guarantee

durations in excess of 20 years.

***Without an acceptable actuarial opinion and memorandum

(using life insurance formula). Additional restrictions

may apply by Regulation.

****May be used only with an acceptable actuarial opinion

and memorandum (using annuity formula).

# Said Chapter 302 amendment became effective., on a

mandatory basis, on January 1, 1989. Any company could have filed

a written notice of prior election.

See paragraph on reserves for these special single premium life insurance policies on page 11. Also see paragraph at bottom of page 4.

D. Other Annuities and, Guaranteed Interest Contracts, with cash settlement options and with interest rate guarantees on future considerations, valued on the "Issue Year" basis.

   

Maximum Reserve

   

Valuation

   

Interest Rate

   

Without Acceptable

   

Actuarial Opinion

   

and Memorandum #

   

(Using Life

   

Insurance Formula)

   

*Plan Type

Issue

       

Year

Guarantee Duration ##

A

B

C

1992, 1983

See Prior Circular Letters

     
         
 

5 years or less

9.50%

7.75%

7,00%

 

More than 5 yrs, up to 10

9.00

7.75

7.00

 

More than 10 yrs, up to 20

8.25

7.00

6.75

 

More than 20 years

6.75

5.75

5.75

         

1985

5-years or less

9.50%

$ 7.75%

7.00%

 

More than 5 yrs, up to 10

9.00

7.75

7.00

 

More than 10 yrs, up to 20

8.25

7.00

6.50

 

More than 20 years

6.50

5.75

5.75

         

1986

5 years or less

8.50%

7.00%

6.50%

 

More than 5 yrs, up to l0

8.25

7.00

6.50

 

More than 10 yrs, up to 20

7.50

6.50

6.00

 

More than 20 years

6.00

5.50

5.50

         

1987

5 years or less

8.00%

6.75%

6.00%

 

More than 5 yrs, up to 10

7.75

6.75

6.00

 

More than 10 yrs, up to 20

7.00

6.00

5.75

 

More than 20 years

5.75

5.25

5.25

         

1988

5 years or less

8.25%

7.00%

6.25%

 

More than 5 yrs, up to 10

8.00

7.00

6.25

 

More than 10 yrs, up to 20

7.25

6.25

6.00

 

More than 20 years

6.00

5.25

5.25

         

1989

5 years or less

8.25%

7.00%

6.25%

 

More than 5 yrs, up to 10

8.00

7.00

6.25

 

More than 10 yrs, up to 20

7.25

6.25

6.00

 

More than 20 years

6.00

5.25

5.25

         

1990

5 years or less

8.00%

6.75%

6.25%

 

More than 5 yrs, up to 10

7.75

6.75

6.25

 

More than 10 yrs, up to 20

7.00

6.25

5.75

 

More than 20 years

5.75

5.25

5.25

         

1991

5 years or less

8.00%

6.75%

6.25%

 

More than 5 yrs, up to 10

7.75

6.75

6.25

 

More than 10 yrs, up to 20

7.00

6.25

5.75

 

More than 20 years

5.75

5.25

5.25

# See requirements for actuarial opinion and memorandum in

footnote on page 4.

Additional restrictions apply, under Regulation 126,

where an acceptable actuarial opinion

and memorandum have not been filed.

 

With Acceptable

 
 

Actuarial Opinion

 
 

and Memorandum#

 
 

(Using Annuity

 
 

Formula)

 
 

*Plan Type

 

Issue

       

Year

A

B

C

 

1992, 1983

       
         

1984

11.25%

9.25%

8.00%

 
 

10.75

9.25

8.00

 
 

8.25

7.00

6.75

 
 

6.75

5.75

5.75

 
         

1985

11.00%

9.00%

8.00%

 
 

10.50

9.00

8.00

 
 

8.25

7.00

6.50

 
 

6.50

5.75

5.75

 
         

1986

9.25%

7.75%

6.75%

 
 

8.75

7.75

6.75

 
 

7.50

6.50

6.00

 
 

6.00

5.50

5.50

 
         

1987

8.00%

6.75%

6.25%

 
 

7.75

6.75

6.25

 
 

7.00

6.00

5.75

 
 

5.75

5.25

5.25

 
         

1988

8.75%

7.50%

6.75%

 
 

8.50

7.50

6.75

 
 

7.25

6.25

6.00

 
 

6.0

5.25

5.25

 
         

1989

8.75%

7.25%

6.50%

 
 

8.25

7.25

6.50

 
 

7.25

6.25

6.00

 
 

6.00

5.25

5.25

 
         

1990

8.25%

7.00%

6.25%

 
 

8.00

7.00

6.25

 
 

7.00

6.25

5.75

 
 

5.75

5.25

5.25

 
         

1991

8.25%

7.00%

6.25%

 
 

8.00

7.00

6.25

 
 

7.00

6.25

5.75

 
 

5.75

5.25

5.25

 

# See requirements for

 

actuarial opinion and

 

memorandum in footnote on

 

page 4.

 

Additional restrictions

 

apply, under Regulation 126,

 

where an acceptable

 

actuarial opinion

 

and memorandum have not

 

been filed.

 

See definition of guarantee duration for Categories D, E, G and H on page 10.

See descriptions of plan types on page 10.

E. Other Annuities and Guaranteed Interest Contracts, with cash settlement options but without interest rate guarantees on future considerations, valued on the "Issue Year" basis.

   

Maximum Reserve Valuation

   

Interest Rate

   

Without Acceptable

   

Actuarial Opinion

   

and Memorandum#

   

(Using Life

   

Insurance Formula)

   

*Plan Type

         

Issue

       

Year

Guarantee Duration##

A

B

C

1982, 1983

See Prior Circular

     
         

1984

5 years or less

10.00%

8.25%

7.50%

 

More than 5 yrs, up to 10

9.50

8.25

7.50

 

More than 10 yrs, up to 20

8.75

7.50

7.00

 

More than 20 years

7.00

6.25

6.25

         

1985

5 years or less

9.75%

8.25%

7.50%

 

More than 5 yrs, up to 10

9.50

8.25

7.50

 

More than 10 yrs, up to 20

8.50

7.50

7.00

 

More than 20 years

7.00

6.25

6.25

         

1986

5 years or less

8.75%

7.50%

6.75%

 

More than 5 yrs, up to 10

8.50

7.50

6.75

 

More than 10 yrs, up to 20

7.75

6.75

6.50

 

More than 20 years

6.50

5.75

5.75

         

1987

5 years or less

8.25%

.00%

6.50%

 

More than 5 yrs, up to 10

8.00

7.00

6.50

 

More than 10 yrs, up to 20

7.25

6.50

6.00

 

More than 20 years

6.00

5.50

5.50

         

1988

5 years or less

8.75%

7.25%

6.75%

 

More than 5 yrs, up to 10

8.25

7.25

6.75

 

More than 10 yrs, up to 20

7.50

6.50

6.25

 

More than 20 years

6.25

5.75

5.75

         

1989

5 years or less

8.50%

7.25%

6.50%

 

More than 5 yrs, up to 10

8.25

7.25

6.50

 

More than 10 yrs, up to 20

7.50

6.50

6.25

 

More than 20 years

16.25

5.50

5.50

         

1990

5 years or less

8.25%

7.00%

6.50%

 

More than 5 yrs, up to 10

8.00

7.00

6.50

 

More than 10 yrs, up to 20

7.50

6.50

6.25

 

More than 20 years

6.25

5.50

5.50

L1991

5 years or less

8.25%

7.00%

6.50%

 

More than 5 yrs, up to 10

8.00

7.00

6.50

 

More than 10 yrs, up to 20

7.50

6.50

6.25

 

More than 20 years

6.25

5.50

5.50

# See requirements for actuarial opinion and memorandum in

footnote on page 4.

Additional restrictions apply, under Regulation 126,

where an acceptable actuarial opinion and memorandum

have not been filed.

## See definition of guarantee duration for Categories D,

E, G and H on page 10.

See descriptions of plan types on page 10.

   

With Acceptable

 
   

Actuarial Opinion

 
   

and Memorandum#

 
   

(Using Annuity

 
   

Formula)

 
   

*Plan Type

 

Issue

         

Year

Guarantee Duration ##

A

6

C

 
           

1984

5 years or less

11.75%

9.75%

8.50%

 
 

More than 5 yrs, up to 10

11.25

9.75

8.50

 
 

More than 10 yrs, up to 20

8.75

7.50

7.00

 
 

More than 20 years

7.00

6.25

6.25

 
           

1985

5 years or less

11.50%

9.5O%

8.50%

 
 

More than 5 yrs, up to 10

11.00

9.50

8.50

 
 

More than 10 yrs, up to 20

8.50

7.50

7.00

 
 

More than 20 years

7.00

6.25

6.25

 
           

1986

5 years or less

9.50%

8.00%

7.25%

 
 

More than 5 yrs, up to 10

9.25

8.00

7.25

 
 

More than 10 yrs, up to 20

7.75

6.75

6.50

 
 

More than 20 years

6.50

5.75

5.75

 
           

1987

5 years or less

8.50%

7.25%

6.50

 
 

More than 5 yrs, up to 10

8.00

7.25

6.50

 
 

More than 10 yrs, up to 20

7.25

6.50

6.00

 
 

More than 20 years

6.00

5.50

5.50

 
           

1988

5 years or less

9.25%

7.75%

7.00%

 
 

More than 5 yrs, up to 10

8.75

7.75

7.00

 
 

More than 10 yrs, up to 20

7.50

6.50

6.25

 
 

More than 20 years

6.25

5.75

5.75

 
           

1989

5 years or less

9.00%

7.50%

7.00%

 
 

More than 5 yrs, up to 10

8.75

7.50

7.00

 
 

More than 10 yrs, up to 20

7.50

6.50

6.25

 
 

More than 20 years

6.25

5.50

5.50

 
           

1990

5 years or less

8.50%

7.25%

6.50%

 
 

More than 5 yrs, up to 10

8.25

7.25

6.50

 
 

More than 10 yrs, up to 20

7.50

6.50

6.25

 
 

More than 20 years

6.25

5.50

5.50

 
           

1991

5 years or less

8.75%

7.25%

6.75%

 
 

More than 5 yrs, up to 10

8.25

7.25

6.75

 
 

More than 10 yrs, up to 20

7.50

6.50

6.25

 
 

More than 20 years

6.25

5.50

5.50

 

F. Other Annuities and Guaranteed Interest Contracts, without cash settlement options, valued on the "Issue Year" basis.

   

Maximum Reserve Valuation Interest Rate

   

Without Acceptable

With Acceptable

   

Actuarial Opinion

Acturial Opinion

   

and Memorandum #

and Memorandum #

   

(Using Life Insurance

(Using Annuity

   

Formula)

Formula)

   

 *Plan Type

 *Plan Type

       

Issue

     

Year

Guarantee Duration**

A

A

1982,

See Prior Circular Letters

   

1983

     
       

1984

5 years or less

9.50%

11.25%

 

More than 5 yrs, up to 10

9.00

10.75

 

More than 10 yrs, up to 20

8.25

9.75

 

More than 20 years

6. 5

7.50

       

1985

5 years or less

9.50%

11.00%

 

More than 5 yrs, up to 10

9.00

10.50

 

More than 10 yrs, up to 20

8.25

9.50

 

More than 20 years

6.50

7.50

       

1986

5 years or less

8.50%

9.25%

 

More than 5 yrs, up to 10

8.25

8.75

 

More than 10 yrs, up to 20

7.50

8.00

 

More than 20 years

6.00

6.50

       

1987

5 years or less

8.00%

8.00%

 

More than 5 yrs, up to 10

7.75

7.75

 

More than 10 yrs, up to 20

7.00

7.25

 

More than 20 years

5.75

6.00

       

1988

5 years or less

8.25%

8.75%

 

More than 5 yrs, up to 10

8.00

8.50

 

More than 10 yrs, up to 20

7.25

7.75

 

More than 20 years

6.00

6.25

       

1989

5 years or less

8.25%

8.75%

 

More than 5 yrs, up to 10.

8.00

8.25

 

More than 10 yrs, up to 20

7.25

7.50

 

More than 20 years

6.00

6.25

       

1990

5 years or less

8.00%

8.25%

 

More than 5 yrs, up to 10

7.75

8.00

 

More than 10 yrs, up to 20

7.00

7.25

 

More than 20 years

5.75

6.00

       

1991

5 years or less

8.00%

8.25%

 

More than 5 yrs, up to 10

7.75

8.00

 

More than 10 yrs, up to 20

7.00

7.25

 

More than 20 years

5.75

6.00

# See requirements for actuarial opinion and memorandum in footnote

on page 4.

Additional restrictions apply, under Regulation 126, where an

acceptable actuarial opinion and memorandum have not been filed.

* See Descriptions of plan types on page 10.

guarantee duration, for other annuities and guaranteed interest contracts without cash settlement options, is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence.

G. Other Annuities and Guaranteed. Interest Contracts, with cash settlement options and with interest rate guarantees on future considerations, valued on the "Change in Fund" basis.

   

Maximum Reserve Valuation

   

Interest Rate

   

Without Acceptable

   

Acturial Opinion

   

and Memorandum #

   

(Using Life Insurance

   

Formula)

Change

       

in Fund

 

*Plan Type

During

       

Year

Guarantee Duration##

A

B

C

1982, 1983

See Prior Circular Letters

     
         

1984

5 years or less

10.75%

10.00%.

7.50%

 

More than 5 yrs, up to 10

10.25

10.00

7.50

 

More than 10 yrs, up to 20

9.50

9.00

7.00

 

More than 20 years

7.75

7.75

6.25

         

1985

5 years or less

10.50%

9.75%

7.50

 

More than 5 yrs, up to 10

10.25

9.75

7.50

 

More than 10 yrs, up to 20

9.50

9.00

7.00

 

More than 20 years$

7.75

7.75

6.25

         

1986

5 years or less

9.50%

8.75%

6.75%

 

More than 5 yrs, up to 10

9.25

8.75

6.75

 

More than 10 yrs, up to 20

8.50

8.25

6.50

 

More than 20 years

7.00

7.00

5.75

         

1987

5 years or less

9.00%

8.25%

6.50%

 

More than 5 yrs, up to 10

8.50

8.25

6.50

 

More than 10 yrs, up to 20

8.00

7.75

6.00

 

More than 20 years

6.75

6.75

5.50

         

1988

5 years or less

9,25%

8.75%

6.75%

 

More than 5 yrs, up to 10

9.00

8.75

6.75

 

More than 10 yrs, up to 20

8.25

8.00

6.25

 

More than 20 years

7.00

7.00

5.75

         

1989

5 years or less

9.25%

8.50%

6.50%

 

More than 5 yrs, up to 10

9.00

8.50

6.50

 

More than 10 yrs, up to 20

8.25

8.00

6.25

 

More than 20 years

7.00

7.00

5.50

         

1990

5 years or less

9.00%

8.25%

6.50%

 

More than 5 yrs, up to 10

8.75

8.25

6.50

 

More than 10 yrs, up to 20

8.00

7.75

6.25

 

More than 20 years

6.75

5.75

5.50

         

1991

5 years or less

9.00%

8.25%

6.50%

 

More than 5 yrs, up to 10

8.75

8.25

6.50

 

More than 10 yrs, up to 20

8.00

7.75

6.25

 

More than 20 years

6.75

6.75

5.50

# See requirements for actuarial opinion and memorandum in

footnote on page 4.

Additional restrictions apply, under Regulation 126, where

an acceptable actuarial opinion and memorandum have not been filed.

## See definition of guarantee duration for Categories

D, E, G and H on page. 10.

* See descriptions of plan types on page 10.

   

Maximum Reserve Valuation

   

Interest Rate

   

With Acceptable

   

Acturial Opinion

   

and Memorandum #

   

(Using Annuity Formula)

Change

       

in Fund

 

*Plan Type

During

       

Year

Guarantee Duration##

A

B

C

1982, 1983

See Prior Circular Letters

     
         

1984

5 years or less

12.75%

11.75%

8.50%

 

More than 5 yrs, up to 10

12.25

11.75

8.50

 

More than 10 yrs, up to 20

11.25

10.75

8.00

 

More than 20 years

9.25

9.25

7.00

         

1985

5 years or less

12.50%

11.50%

8.50%

 

More than 5 yrs, up to 10

12.00

11.50

8.50

 

More than 10 yrs, up to 20

11.00

10.50

8.00

 

More than 20 years

9.00

9.00

7.00

         

1986

5 years or less

10.25%

9.50%

7.25%

 

More than 5 yrs, up to 10

10.00

9.50

7.25

 

More than 10 yrs, up to 20

9.25

8.75

6.75

 

More than 20 years

7.75

7.75

6.00

         

1987

5 years or less

9.00%

8.50%

6.50%

 

More than 5 yrs, up to 10

8.75

8.50

6.50

 

More than 10 yrs, up to 20

8.00

7.75

6.25

 

More than 20 years

6.75

6.75

5.50

         

1988

5 years or less

10.00%

9.25%

7.00%

 

More than 5 yrs, up to 10

9.50

9.25

7.00

 

More than 10 yrs, up to 20

8.75

8.50

6.75

 

More than 20 years

7.50

7.50

6.00

         

1989

5 years or less

9.75%

9.00%

7.00%

 

More than 5 yrs, up to 10

9.50

9.00

7.00

 

More than 10 yrs, up to 20

8.75.

8.25

6.50

 

More than 20 years

7.25

7.25

5.75

         

1990

5 years or less

9.25%

8.50%

6.50%

 

More than 5 yrs, up to 10

8.75

8.50

6.50

 

More than 10 yrs, up to 20

8.25

8.00

6.25

 

More than 20 years

7.00

7.00

5.50

         

1991

5 years or less

9.25%

8.75%

6.75%

 

More than 5 yrs, up to 10

9.00

8.75

6.75

 

More than 10 yrs, up to 20

8.25

8.00

6.25

 

More than 20 years

7.00

7.00

5.75

Other Annuities and guaranteed interest contracts, with cash settlement options but without interest rate guarantees on future considerations, valued on the "Change in Fund" basis.

   

Maximum Reserve

   

Valuation Interest Rate

   

Without Acceptable

   

Actuarial Opinion

   

and Memorandum#

Change

 

(Using Life

   

Insurance Formula)

in fund

 

*Plan Type

During

       

Year

Guarantee Duration##

A

B

C

         

1982, 1983

See Prior Circular Letters

     
         

1984

5 years or less

11.00%

10.25%

7.75%

 

More than 5 yrs, up to 10

10.75

10.25

7.75

 

More than 10 yrs, up to 20

10.00

9.50

7.50

 

More than 20 years

8.25

8.25

6.75

         

1985

5 years or less

11.00%

10.25%

7.75%

 

More than 5 yrs, up to 10

10.50

10.25

7.75

 

More than 10 yrs,up to 20

9.75

9.50

7.50

 

More than 20 years

8.25

8.25

6.50

         

1986

5 years or less

9.75%

9.25%

7.00%

 

More than 5 yrs, up to 10

9.50

9.25

7.00

 

More than 10 yrs, up to 20

8.75

8.50

6.75

 

More than 20 years

7.50

7.50

6.00

         

1987

5 years or less

9.25%

8.50%

6.75%

 

More than 5 yrs, up to 10

9.00

8.50

6.75

 

More than 10 yrs, up to 20

8.25

8.00

6.50

 

More than 20 years

7.00

7.00

5.75

         

1988

5 years or less

9.75%

9.00%

7.00%

 

More than 5 yrs, up to 10

9.2.5

9.00

7.00

 

More than 10 yrs, up to 20

8.75

8.25

6.75

 

More than 20 years

7.25

7.25

6.00

         

1989

5 years or less

9.50%

9.00%

7.00%

 

More than 5 yrs, up to 10

9.25

9.00

7.0

 

More than 10 yrs, up to 20

8.50

8.25

6.50

 

More than 20 years

7.25

7.25

6.00

         

1990

5 years or less

9.25%

8.75%

6.75%

 

More than 5 yrs, up to 10

9.00

8.75

6.75

 

More than 10 yrs, up to 20

8.25

8.00

6.50

 

More than 20 years

7.00

7.00

5.75

         

1991

5 years or less

9.25%

8.75%

6.75%

 

More than 5 yrs, up to 10

9.00

8.75

6.75

 

More than 10 yrs, up to 20

8.25

8.00

6.50

 

More than 20 years

7.00

7.00

5.75

# See requirements for actuarial opinion and memorandum in

footnote on page 4.

Additional restrictions apply, under Regulation 126, where

an acceptable actuarial opinion and memorandum have not been

filed.

# # See definition of guarantee duration for Categories D, E,

G and H on page 10.

*See descriptions of plan types on page 10.

   

Maximum Reserve

   

Valuation Interest Rate

   

With Acceptable

   

Actuarial Opinion

   

and Memorandum#

Change

 

(Using Annuity

   

Formula)

in fund

 

*Plan Type

During

       

Year

Guarantee Duration##

A

B

C

         

1982, 1983

See Prior Circular Letters

     
         

1984

5 years or less

13.25%

12.25%

9.25%

 

More than 5 yrs, up to 10

12.75

12.25

9.25

 

More than 10 yrs, up to 20

11.75

11.25

8.50

 

More than 20 years

9.75

9.75

7.50

         

1985

5 years or less

13.00%

12.00%

9.00%

 

More than 5 yrs, up to 10

12.50

12.00

9.00

 

More than 10 yrs,up to 20

11.50

11.00

8.50

 

More than 20 years

9.50

9.50

7.50

         

1986

5 years or less

10.75%

10.00%

7.75%

 

More than 5 yrs, up to 10

10.25

10.00

7.75

 

More than 10 yrs, up to 20

9.50

9.25

7.25

 

More than 20 years

8.00

8.00

6.50

         

1987

5 years or less

9.50%

8.75%

6.75%

 

More than 5 yrs, up to 10

9.00

8.75

6.75

 

More than 10 yrs, up to 20

8.50

8.00

6.50

 

More than 20 years

7.25

7.25

6.00

         

1988

5 years or less

10.25%

9.50%

7.50%

 

More than 5 yrs, up to 10

10.00

9.50

7.50

 

More than 10 yrs, up to 20

9.25

8.75

7.00

 

More than 20 years

7.75

7.75

6.25

         

1989

5 years or less

10.00%

9.50%

7.25%

 

More than 5 yrs, up to 10

9.75

9.50

7.25

 

More than 10 yrs, up to 20

9.00

8.75

7.00

 

More than 20 years

7.50

7.50

6.25

         

1990

5 years or less

9.50%

8.75%

7.00%

 

More than 5 yrs, up to 10

9.25

8.75

7.00

 

More than 10 yrs, up to 20

8.50

8.25

6.50

 

More than 20 years

7.25

7.25

6.00

         

1991

5 years or less

9.75%

9.00%

7.00%

 

More than 5 yrs, up to 10

9.25

9.00

7.00

 

More than 10 yrs, up to 20

8.75

8.25

6.75

 

More than 20 years

7.25

7.25

6.00

Said Section 4221(k)(12) was amended by Chapter 81 of the Laws of 1983 to permit a company to elect to comply with the new provisions of Section 4221 on a plan-by-plan basis, with the proviso that the entire portfolio must be converted to the new provisions on or before January 1 of the third calendar year following the calendar year of compliance for the first plan so converted, but not, in any event, later than January 1, 1989.

Plan types, as used in the above tables, are defined as follows:

Plan Type A: The 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 insurance company, or (2) without such adjustment but in installments over five years or more, or (3) as an immediate life annuity.

Plan Type B: The policyholder may not withdraw funds before the expiration of the interest rate guarantee or, if withdrawals are permitted before the expiration of such guarantee, may withdraw funds only (1) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, or (2) without such adjustment but in installments over five years or more. At the end of the interest rate guarantee, funds may be withdrawn without such adjustment in a single sum or in installments over less than five years.

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

(The most popular plan type, in the group annuity area, for current issues, is plan type B; while, the most popular plan type, in the individual annuity area, for current issues, is plan type C.)

The guarantee duration, for other annuities and guaranteed interest contracts with cash settlement options, generally 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 (covered in A on page 2) with guarantee durations of more than twenty years (See D, E, G and H herein).

The guarantee duration, for other annuities and guaranteed interest contracts without cash settlement options, is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence.

Other annuities and guaranteed interest contracts, without cash settlement Options, may be valued only on an "Issue Year" basis.

For structured settlement annuities with lump-sum payments, see Section 95.12 of Regulation 126.

The maximum reserve valuation interest rates, for annuities and guaranteed interest contracts and for single premium life insurance policies of the kind referred to in Section 4217(c)(4)(B)(vi), are based on Moody's Corporate Bond Yield Averages for a one or three year period ending in June of the year of issue, purchase or change in fund. Consequently, we are not able to compute rates applicable to 1992 at this time.

The attached Appendix describes the method of calculating the maximum reserve valuation interest rates, in accordance with the specifications of Section. 4217 of the New York Insurance Laws, as amended.

Section 4217, as amended by Chapter 749 of the Laws of 1983, permits the dynamic interest rates (under the 1982 amendments) to be used for issues of January 1, 1982 and later, irrespective of a company's election or. non-election under Section 4221 (k)(12). Thus, the new dynamic interest rates may be used either with 1958 CSO issues of January 1, 1982 through December 31, 1988 or with 1980 CSO issues of January 1, 1982 and later, for valuation purposes.

The reserve for a Single Premium Life Insurance policy, of the kind referred to in Section 4217(c)(4)(B)(vi) of the New York Insurance Laws (as amended by Chapter 302 of the laws of 1987), must not be less than its cash value. Section 95.14 of Regulation 126 limits the applicable duration of maximum reserve valuation interest rates specified in B on page 3.

APPENDIX

To Circular Letter Number 15 (1991)

The maximum reserve valuation interest rates are based on reference interest rates, which are averages of corporate bond earnings published by Moody's Investors Service, Inc., and weighting factors prescribed by Section 4217.

The weighting factors do not vary from year to year. None of the weighting factors given in Table 1 below will change unless Section 4217 is revised by. new legislation. The following formulas are used to compute the maximum reserve valuation interest rates:

I = 3.00% + W(R[1]-3.00)% + W/2(R[2]-9.00)%, (Formula 1, called "Life Insurance Formula")

or

I = 3.00% + W(12-3.00)%, (Formula 2, called "Annuity Formula")

Where:

I.= Maximum calendar year statutory valuation interest rate, rounded to the nearer 1/4%.

R= Reference interest rate, derived from moody's corporate bond monthly yield averages, rounded to the nearer basis point 1.01 of 1%).

R[1]= Lesser of R and 9.00%.

R[2]= Greater of R and 9.00%.

W = Weighting factor.

The third term of Formula 1 is dropped whenever the reference interest rate falls below 9.00%. The weighting factors vary by type of benefit, guarantee duration, and valuation basis (i.e. 'issue year' basis or 'change-in-fund' basis). An asterisk (*), where shown with the weighting factor in Table 1, indicates that Formula 2 may optionally be used with a given factor if an acceptable actuarial opinion and memorandum are provided, as required by Section 4217(c)(4)(B)(vi).

TABLE 1

   

Valuation

 

Benefit

Guarantee Duration

Basis

 

(Category in

(Where duration t,

   

Circular Letter)

in years, is)

   

A

= or < 10

Issue

 
 

> 10, = or < 20

Year

 
 

> 20

   
       

B

= or < 10

Issue Year

 
 

> 10, = or < 20

Issue Year

 
 

> 20

Issue Year

 
       

B

= or < 10

Change-in-Fund

 
 

> 10, = or < 20

Change-in-Fund

 
 

> 20

Change-in-Fund

 
       

C

Not applicable

Issue or

 
 

Purchase Year

(1)

 
 

Reference

Weighting

 

Benefit

Interest Rata

Factor

 

(Category in

(Column from

   

Circular Letter)

Table 2)

   

A

(3)

.50

 
   

.45

 
   

.35

 
       

B

(1)

.55*

 
 

(3)

.50

 
 

(3)

.40

 
       

B

(1)

.60*

 
 

(1)

.55*

 
 

(1)

.45*

 
       

C

     
   

.80*

 
   

Valuation

Reference

Benefit

Guarantee Duration

Basis

Interest Rate

(Category in

(Where duration t,

 

(Column from

Circular Letter)

in years, is)

 

Table 2)

       
       

D

= or < 5

Issue

(1)

 

> 5, = or < 10

Year

(1)

 

> 10, = or < 20

 

(3)

 

> 20

 

(3)

       
   

Issue

 

E

= or < 5

Year

(1)

 

> 5, = or <,10

 

(1)

 

> 10, = or <20

 

(3)

 

> 20

 

(3)

       

F

= or < 5,

Issue

(1)

 

> 5, = or < 10

Year

(l)

 

> 10, = or < 20

 

(1)

 

> 20

 

(1)

       

G

= or < 5

Change

(1)

 

> 5, = or < 10

in

(1)

 

> 10, = or < 20

Fund

(1)

 

> 20

 

(1)

       

H

= or < 5

Chanae

(1)

 

> 5, = or < 10

in

(1)

 

> 10, = or < 20

Fund

(1)

 

> 20

 

(1)

   

Weighting

 

Benefit

Guarantee Duration

Factor

 

(Category in

(Where duration t,

       

Circular Letter)

in years, is)

       
           
   

Varies By Plan Type

 
   

A

B

C

 

D

= or < 5

.80*

.60*

.50*

 
 

> 5, = or < 10

.75*

.60*

.50*

 
 

> 10, = or < 20

.65

.50

.45

 
 

> 20

.45

.35

.35

 
           
   

A

B

C

 

E

= or < 5

.85*

.65*

.55*

 
 

> 5, = or <,10

.80*

.65*

.55*

 
 

> 10, = or <20

.70

.55

.50

 
 

> 20

.50

.40

.40

 
           
   

A

     

F

= or < 5,

.80*

     
 

> 5, = or < 10

.75*

     
 

> 10, = or < 20

.65*

     
 

> 20

.45*

     
           
   

A

B

C

 

G

= or < 5

.95*

.85*

.55*

 
 

> 5, = or < 10

.90*

.85*

.55*

 
 

> 10, = or < 20

.80*

.75*

.50*

 
 

> 20

.60*

.60*

.40*

 
           
   

A

B

C

 

H

= or < 5

1.00*

.90

.60*

 
 

> 5, = or < 10

.95*

.90*

.60*

 
 

> 10, = or < 20

.85*

.80*

.55*

 
 

> 20

.65*

.65*

.45*

 

The reference interest rates are based on the average corporate bond earnings published by Moody's Investors Service, Inc.

Section 4217 defines running averages of the published monthly yield rates for 12-month and 36-month periods.

The year of issue, of purchase or of change-in-fund, applicable to the running yield average ending in the current year, is the next following year for Life. Insurance other than single premium life insurance of the kind referred to in Section 4217(c)(4)(B)(vi) (i.e. Category A in the Circular Letter) and the current year for all other business (i.e. Categories B through H in the Circular Letter).

The following table shows Moody's yield averages for recent years:

TABLE 2

For Period

     

Ending

12-Month

36-Month

 

June 30

Running

Running

Lesser of

of Year

Average

Average

Two Averages

 

(1)

(2)

(3)

1981

13.71%

11.57%

11.57%

1982

15.70

13.64

13.64

       

1983

13.39%

14.26%

13.39%

1984

13.22

14.10

13.22

       

1985

13.01%

13.21%

13.01%

1986

10.75

12.33

10.75

       

1987

9.40%

11.05%

9.40%

1988

10.32

10.15

10.15

       

1989

10.09%

9.93%

9.93%

1990

9.52

9.97

9.52

       

1991

9.63%

9.74%

9.63%

The maximum nonforfeiture interest rate for Life Insurance, under Section 422)(k), for a particular issue year, is equal to 125% of the maximum reserve valuation interest rate for the same issue year, rounded to the nearer 1/4%.

Should the computed maximum reserve valuation interest rate for Life Insurance (other than Single Premium Life Insurance covered in Category B on page 3 of the Circular letter) for a particular issue year be different from the actual maximum reserve valuation Interest rate for the next previous issue year by less than 1/2%, then the maximum reserve valuation interest rate for such particular issue year will be the same as that for such next previous issue year.