Current through Register Vol. 56, No. 6, March
18, 2024
(a) For
contract reserves the maximum interest rate is:
1. For contracts issued prior to January 1,
1973: 3 1/2 percent.
2. For
contracts issued on or after January 1, 1973 through December 31, 2000: A rate
of interest not exceeding the maximum rate of interest specified in
17B:19-8 for policies of life
insurance which are issued the same year and, if relevant, for policies of life
insurance containing a maximum guaranteed duration of more than 10 years but
not more than 20 years.
3. For
contracts issued on or after January 1, 2001: The maximum rate permitted by law
in the valuation of whole life insurance issued on the same date as the health
insurance contract.
(b)
For claim reserves on policies that require contract reserves where the claim
incurral date is prior to January 1, 2001, the maximum rate of interest is:
1. For contracts issued prior to January 1,
1973: 3 1/2 percent.
2. For
contracts issued on or after January 1, 1973 through December 31, 2000: A rate
of interest not exceeding the maximum rate of interest specified in
17B:19-8 for policies of life
insurance which are issued the same year and, if relevant, for policies of life
insurance containing a maximum guaranteed duration of more than 10 years but
not more than 20 years.
3. Upon
demonstrating the adequacy of the reserves and with the approval of the
Commissioner, a company may determine the maximum interest rate to be used in
calculating the claim reserve using the rates specified in (b)1 and 2 above,
based on the incurral date of the claim instead of the contract issue date.
Once an insurer elects to calculate reserves based on the incurral date of the
claim, all future valuations must be on that basis.
(c) For claim reserves on policies that
require contract reserves, where the claim incurral date is on or after January
1, 2001, the maximum rate of interest is the maximum rate permitted by law in
the valuation of whole life insurance issued on the same date as the claim
incurral date.
(d) For claim
reserves on policies not requiring contract reserves, where the claims incurral
date is prior to January 1, 2001, the maximum rate of interest is:
1. For contracts issued prior to January 1,
1973: 3 1/2 percent.
2. For
contracts issued on or after January 1, 1973 through December 31, 2000: A rate
of interest not exceeding the maximum rate of interest specified in
17B:19-8 for policies of life
insurance which are issued the same year and, if relevant, for policies of life
insurance containing a maximum guaranteed duration of more than 10 years but
not more than 20 years.
3. Upon
demonstrating the adequacy of the reserves and with the approval of the
Commissioner, a company may determine the maximum interest rate to be used in
calculating the claim reserve using the rates specified in (d)1 and 2 above,
based on the incurral date of the claim instead of the contract issue date.
Once an insurer elects to calculate reserves based on the incurral date of the
claim, all future valuations must be on that basis.
(e) For claim reserves on policies not
requiring contract reserves, where the claim incurral date is on or after
January 1, 2001, the maximum rate of interest is the maximum rate permitted by
law in the valuation of single premium immediate annuities issued on the same
date as the claim incurral date, reduced by one hundred basis points. Upon
demonstrating the adequacy of the reserves and with the prior approval of the
Commissioner, an insurer may elect to use this rate for claims incurred prior
to January 1, 2001. Once an insurer makes such an election, all future
valuations must be on that basis.
