58-26-71. Calendar year statutory valuation interest rates defined. The interest rates used in determining the minimum standard for the valuation of life insurance policies issued in a particular calendar year, on or after the operative date of §§ 58-15-43.1 to 58-15-43.11, inclusive; individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1983; annuities and pure endowments purchased in a particular calendar year on or after January 1, 1983, under group annuity and pure endowment contracts; and the net increase, if any, in a particular calendar year after January 1, 1983, in amounts held under guaranteed interest contracts; shall be the calendar year statutory valuation interest rates as defined in this section.

(1) The calendar year statutory valuation interest rates, "I", shall be determined as follows and the results rounded to the nearer one-quarter of one percent:

(a) For life insurance,

I = .03 + W(R1 - .03) + W (R2 - .09);2

(b) For single premiums immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options,

I = .03 + W(R - .03)

where R1 is the lesser of R and .09, R2 is the greater of R and .09, R is the reference interest rate defined in §§ 58-26-71 to 58-26-74, inclusive, and W is the weighting factor defined in §§ 58-26-71 to 58-26-74, inclusive;

(c) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis, except as stated in subdivision (b), the formula for life insurance stated in subdivision (a) applies to annuities and guaranteed interest contracts with guarantee durations in excess of ten years and the formula for single premium immediate annuities stated in subdivision (b) applies to annuities and guaranteed interest contracts with guarantee duration of ten years or less;

(d) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in subdivision (b) applies;

(e) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in subdivision (b) applies.

(2) However, if the calendar year statutory valuation interest rate for any life insurance policies issued in any calendar year determined without reference to this sentence differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of one percent, the calendar year statutory valuation interest rate for life insurance policies is equal to the corresponding actual rate for the immediately preceding calendar year. For purposes of applying the immediately preceding sentence, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980, using the reference interest rate defined in 1979, and shall be determined for each subsequent calendar year regardless of when §§ 58-15-43.1 to 58-15-43.11, inclusive, became operative.Source: SL 1995, ch 284, § 27; SL 2015, ch 254, § 15.