New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter IV - Financial Condition Of Insurer and Reports to Superintendent
Subchapter B - Life Insurers
Part 99 - VALUATION OF ANNUITY, SINGLE PREMIUM LIFE INSURANCE, GUARANTEED INTEREST CONTRACT AND OTHER DEPOSIT RESERVES
Section 99.3 - Definitions

Universal Citation: 11 NY Comp Codes Rules and Regs § 99.3

Current through Register Vol. 46, No. 39, September 25, 2024

As used in this Part, the following terms have the following meanings:

(a) Account value means, with respect to a contract, the aggregate net considerations credited to the contract plus all additional amounts, including interest and dividends credited to the contract, less partial withdrawals (but not loans), and less all charges and fees imposed against the accumulated amount under the contract other than surrender charges and market-value adjustments.

(b) Actuarial opinion and memorandum means the opinion and memorandum of an appointed actuary submitted in accordance with sections 4217 (e) and 4517 of the Insurance Law.

(c) Annuity purchase amount means the dollar amount which is applied at the time of annuitization under a deferred annuity contract. This value could be greater than or less than the account value.

(d) Annuity weighting factors means the weighting factors referred to in section 4217 (c)(4)(D)(iii) of the Insurance Law.

(e) Annuity valuation formula means the formula referred to in section 4217 (c)(4)(B)(ii) of the Insurance Law and used to determine the calendar year statutory valuation interest rate for certain contracts.

(f) Annuity 2000 Mortality Table means that mortality table shown in section 99.10(h)(2)(i) (b) of this Part.

(g) Appointed actuary means the individual defined in section 95.4(e) of this Title.

(h) Bail-out rate means the threshold interest rate below which any declared interest rate will trigger the option to surrender a contract with waiver of any applicable surrender charge.

(i) Book value means, for assets, the value prescribed by section 1414 of the Insurance Law and for reserves the value prescribed by articles 42 and 45 of the Insurance Law.

(j) C-3 risk means the risk that interest rates will change and cause an adverse deviation in the amount or timing of asset or liability cash flows.

(k) Cohort mortality table means a mortality table containing a set of mortality rates that decrease for a given age from one year to the next and is based on a combination of a period table and a projection scale that contains rates of mortality improvement.

(l) Company means any life insurance company, fraternal benefit society or accredited life reinsurer subject to the provisions of this Part.

(m) Contract means an annuity contract, annuity benefit (whether or not issued as a supplementary contract), guaranteed interest contract or funding agreement, or any benefit thereunder assumed by a reinsurer.

(n) Current interest rate means the sequence of interest rates currently in effect for determining contract benefits, whether contractually guaranteed or currently declared, for a specified period. It includes any additional interest in excess of the long-term minimum contractual guarantee.

(o) Guarantee duration means (unless otherwise defined herein):

(1) with respect to benefits or contracts with cash settlement options, the number of years for which the interest rates provided in, or declared pursuant to, the contract are guaranteed to exceed the calendar year statutory valuation interest rate for life insurance policies with guarantee durations in excess of 20 years; and

(2) with respect to benefits or contracts with no cash settlement options, the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence.

(p) Interest guarantee maturity date means the date of expiry of the current interest rate as defined in subdivision (m) of this section.

(q) Life insurance valuation formula means the formula referred to in sections 4217 (c)(4)(B)(i) and 4517 of the Insurance Law and used to determine the calendar year statutory valuation interest rate for contracts to which the annuity valuation formula does not apply.

(r) Market-value adjustment means:

(1) with respect to individual contracts and group certificates subject to section 4223 of the Insurance Law (or that would be subject to section 4223 of the Insurance Law if delivered in this State), such adjustments according to a formula described in the contract for increasing and decreasing the account value in order to determine cash surrender values or account values in accordance with Part 44 of this Title. Such adjustments are not directly related to the supporting assets; and

(2) with respect to group annuities under contracts not subject to section 4223, such adjustments either according to a formula described in the contract or by company practice or procedure outside the contract or negotiated between the contractholder and the company for increasing and decreasing the cash values in event of surrender or termination. Such adjustment may be directly related to the value of the supporting assets or may be related to the change in some other assets or may be according to some other criteria.

(s) Net considerations means gross considerations received under a contract minus all deductions from considerations made before crediting considerations to the contract.

(t) Period table means a table of mortality rates applicable to a given calendar year (the period).

(u) Plan type means one of the types of contracts or benefits, referred to in section 4217 (c)(4)(D)(iii)(V) of the Insurance Law, used to determine annuity-weighting factors.

(v) Projection scale means a table of annual rates of mortality improvement by age, to be used for projecting future mortality rates.

(w) Reference interest rate means the interest rate referred to in section 4217 (c)(4)(F)(ii)-(vi) of the Insurance Law.

(x) Single premium policy means any single premium life insurance policy, issued on or after January 1, 1982, which provides for crediting additional amounts pursuant to section 4232 of the Insurance Law and under which interest rates provided in, or declared pursuant to, the policy are, for some period, guaranteed to exceed the greater of:

(1) six percent per year; and

(2) the valuation interest rate for other life insurance policies with guarantee durations in excess of 20 years.

(x) Single premium policy includes any such single premium life insurance policy under which additional payments may be made at the option of the policyholder. However, in order to qualify as a single premium policy, the policy shall contractually remain in force for life or endow at age 95 without additional payments based on an illustration using current assumptions at time of issue.

(y) Single premium policy weighting factors means the weighting factors referred to in section 4217 (c)(4)(D)(i) of the Insurance Law and used in the valuation formulae for single premium policies.

(z) Surrender charge means, with respect to a contract, a deduction made against the account value when a contract is surrendered for its cash value:

(1) including, in the case of group contracts other than those subject to section 4223 of the Insurance Law (or that would be subject to section 4223 of the Insurance Law if delivered in this State), any downward market-value adjustment; and

(2) excluding, in the case of contracts subject to section 4223 of the Insurance Law (or that would be subject to section 4223 of the Insurance Law if delivered in this State), any downward adjustment resulting from the application of a market value adjustment formula as defined in Part 44 of this Title.

(z) In the case of two tier annuities the surrender charge is the difference between the account value of the higher tier and the cash surrender value. This surrender charge may be unconditional or it may be a conditional charge that is waived, for example, in the event the interest rate declared for any subsequent period is less than the bail-out rate as defined in this section.

(aa) Valuation interest rate means the calendar year statutory valuation interest rate as determined by using the appropriate valuation formula, the appropriate annuity or single premium policy weighting factor, and the appropriate reference interest rate taking into account, with respect to a contract or benefit, the guarantee duration and the plan type.

(ab) 1983 Table "a" means that mortality table shown in section 99.10(h)(2)(i) (a) of this Part.

(ac) 1983 GAM Table means the mortality table shown in section 99.10(i)(4) of this Part.

(ad) 1994 GAR Table means that mortality table shown in section 99.10(i)(5) of this Part.

(ae) 2012 IAR Table means the cohort mortality table containing rates, q2012+n, derived from a combination of rates from the 2012 IAM Period Table and Projection Scale G2, using the methodology specified in section 99.10(i)(3)(iii) of this Part.

(af) 2012 Individual Annuity Mortality Period Life ('2012 IAM Period') Table means the period table containing mortality rates for calendar year 2012 containing rates, q2012, as specified in section 99.10(i)(3)(i) of this Part.

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