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  #1  
Old 06-30-2016, 03:35 PM
j.houle j.houle is offline
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Default Historical Statutory and Tax interest Rates

Hello all,

I am interested in the historical valuation and tax interest rates for life insurance policies.

I think I have a comprehensive picture when I look at page 10 and 35 in the document below.

https://www.towerswatson.com/en/Insi...nuity-products

Question: Am I missing something? Were there separate prescribed rates for, let's say, ETI or RPU coverages? Or any other kind of exception?

Thanks and happy Canada day and happy 4th of July!
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Old 07-01-2016, 12:53 PM
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This is a great source - probably the best. Here is another I've used, which has monthly updates.

http://www.hauseactuarial.com/newsletter/moody.pdf
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Old 07-01-2016, 01:10 PM
Rudy811 Rudy811 is offline
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Are these the correct moody's rates?

06/01/2015 4.56%
07/01/2015 4.57%
08/01/2015 4.48%
09/01/2015 4.59%
10/01/2015 4.52%
11/01/2015 4.62%
12/01/2015 4.58%
01/01/2016 4.56%
02/01/2016 4.44%
03/01/2016 4.33%
04/01/2016 4.09%
05/01/2016 4.04%
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Old 07-01-2016, 01:33 PM
Steve Grondin Steve Grondin is offline
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This has become a defacto recording thread. There is not a single post that keeps up, but isn't too bad.

http://www.actuarialoutpost.com/actu...d.php?t=102583
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Old 07-04-2016, 06:23 PM
j.houle j.houle is offline
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Thanks!
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Old 08-22-2017, 06:24 PM
Swoleslaw Swoleslaw is offline
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Related to this, we have some very old business that has been reserved for conservatively, using val rates that are lower than the maximum allowable statutory valuation interest rates (PSR rates). Are there any issues with increasing the valuation rates on this business to up to the PSR rates?

I ask because a couple people thought that these rates couldn't be changed after issue, thinking that NAIC assumptions are locked in at issue. While I understand guarantees, which are used in NAIC reserve calculations, are locked in at issue, I didn't see anything in the Valuation Manual suggesting that valuation rates couldn't be changed as long as they don't exceed PSR rates.
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Old 08-22-2017, 07:44 PM
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Quote:
Originally Posted by Swoleslaw View Post
Related to this, we have some very old business that has been reserved for conservatively, using val rates that are lower than the maximum allowable statutory valuation interest rates (PSR rates). Are there any issues with increasing the valuation rates on this business to up to the PSR rates?

I ask because a couple people thought that these rates couldn't be changed after issue, thinking that NAIC assumptions are locked in at issue. While I understand guarantees, which are used in NAIC reserve calculations, are locked in at issue, I didn't see anything in the Valuation Manual suggesting that valuation rates couldn't be changed as long as they don't exceed PSR rates.
If you did this, I would think the change in reserve would go into Exh 5A, which would then lead to attention being drawn to the change.

Ultimately, it's important to hash out *why* you'd change the statutory valuation interest rate and be prepared to explain that to whoever asks. (Tax implications: I think this is also the type of change that would be subject to the 10-year amortization period in 807(f).)
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Old 08-23-2017, 04:53 PM
Steve Grondin Steve Grondin is offline
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Quote:
Originally Posted by wat? View Post
If you did this, I would think the change in reserve would go into Exh 5A, which would then lead to attention being drawn to the change.

Ultimately, it's important to hash out *why* you'd change the statutory valuation interest rate and be prepared to explain that to whoever asks. (Tax implications: I think this is also the type of change that would be subject to the 10-year amortization period in 807(f).)
You also need regulatory permission to weaken reserves. Increasing the val rate would typically lower the reserves.

IIRC, the amount of the weakening does not contribute to stat earnings but to surplus, so you can't dividend it up to parent.
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Old 08-23-2017, 05:39 PM
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In today's challenging interest environment, I think it would be harder than in "normal" times to justify an increased valuation rate.
I remember a study note mentioning strengthening reserves in an earlier time when interest rates were low.
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Old 09-15-2017, 04:11 PM
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Quote:
Originally Posted by wat? View Post
If you did this, I would think the change in reserve would go into Exh 5A, which would then lead to attention being drawn to the change.

Ultimately, it's important to hash out *why* you'd change the statutory valuation interest rate and be prepared to explain that to whoever asks. (Tax implications: I think this is also the type of change that would be subject to the 10-year amortization period in 807(f).)
Agreed.

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You also need regulatory permission to weaken reserves.
May I ask where you're reading this from?
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