SECTION 3.
Ins 2.30 (3) (cm) is created to read:Ins 2.30 (3) (cm) Except as provided in par. (d) the 2012 IAR Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 2015.
Ins 2.30 (3m) Application of the 2012 IAR Table
In using the 2012 IAR Table, the mortality rate for a person age x in year (2012 + n) is calculated as follows:
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The resulting qx 2012+n shall be rounded to three decimal places per 1,000, e.g., 0.741 deaths per 1,000. Also, the rounding shall occur according to the formula above, starting at the 2012 period table rate. For example, for a male age 30, qx 2012 = 0.741.
qx 2013 = 0.741 * (1 – 0.010) ^ 1 = 0.73359, which is rounded to 0.734.
qx 2014 = 0.741 * (1 – 0.010) ^ 2 = 0.7262541, which is rounded to 0.726.
A method leading to incorrect rounding would be to calculate qx 2014 as qx 2013 * (1 – 0.010), or 0.734 * 0.99 = 0.727. It is incorrect to use the already rounded qx 2013 to calculate qx 2014.
SECTION 5.
INITIAL APPLICABILITY. These changes apply to contracts issued on or after January 1, 2015.SECTION 6.
EFFECTIVE DATE. These changes will take effect on the first day of the month after publication, as provided in s. 227.22 (2) (intro.), Wis. Stats.Dated at Madison, Wisconsin, this 19th day of December , 2014.
Theodore K. Nickel
Commissioner of Insurance
Office of the Commissioner of Insurance
Private Sector Fiscal Analysis
for Section Ins 2.30 relating to 2012 Individual Annuity Reserving Mortality Table and Affecting Small Business This rule change will have no significant effect on the private sector regulated by OCI.
