California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 4.8 - Review of Rates
Article 4 - Determination of Reasonable Rates
Section 2644.18 - Federal Income Tax Factors
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) "Underwriting federal income tax factor" means
1.0 minus the prospective federal income tax rate on underwriting. The Commissioner finds that the prospective federal income tax rate on underwriting is 21%.
(b) "Investment federal income tax factor" means
1.0 minus the prospective federal income tax rate on investment income. The prospective federal income tax rate on investment income shall be calculated using the weighted yield, adjusted for investment expenses, computed in section 2644.20 and shall take into account any tax preferences and exemptions for the income from each asset class and from each category of bond issuer. The Commissioner finds that the prospective federal income tax rate on the investment income from taxable bonds, mortgage loans, real estate, cash and short-term investments and on investment expenses is 21%, on capital gains is 21%, on tax-exempt bond interest is 5.25% and on stock dividends is 13.125%. For investment income on other invested assets, the prospective federal income tax rate shall be the weighted average of the tax rates on the above categories.
1. New section
filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3). A Certificate
of Compliance must be transmitted to OAL 12-11-91 or emergency language will be
repealed by operation of law on the following day.
2. Repealed by
operation of Government Code section
11346.1(g)
(Register 92, No. 15).
3. New section refiled 2-14-92 as an emergency;
operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance must be
transmittted to OAL 6-15-92 or emergency language will be repealed by operation of
law on the following day.
4. Repealed by operation of Government Code
section
11346.1(g)
and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing only
pursuant to Government Code section
11343(a)(1)
(Register 95, No. 11).
5. Amendment of section heading and repealer and
new section filed 1-3-2007; operative 4-3-2007. Submitted to OAL for printing only
pursuant to Government Code section
11340.9(g)
(Register 2007, No. 1).
6. Amendment filed 2-23-2018; operative
2-23-2018. Exempt from the Administrative Procedure Act and OAL review pursuant to
Government Code section
11340.9(g);
submitted to OAL for filing and printing only pursuant to Government Code section
11343.8
(Register 2018, No. 8).
Note: Authority cited: Sections 1861.01 and 1861.05, Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference: Sections 1861.01 and 1861.05, Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d 805.
