Georgia Code
Chapter 10 - Assets and Liabilities
§ 33-10-13. Standard Valuation

After July 1, 1973, any insurer may file with the Commissioner a written notice of its election to comply with this paragraph after a specified date before January 1, 1979, which shall be the operative date of this paragraph for such insurer, provided that if an insurer makes no such election, the operative date of this paragraph for such insurer shall be January 1, 1979.
I = .03 + W(R1 - .03) + 1/2 W(R2 - .09);
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 paragraph (4) of this subsection, and W is the weighting factor defined in paragraph (3) of this subsection;
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 1 percent, the calendar year statutory valuation interest rate for such life insurance policies shall be 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 for 1979) and shall be determined for each subsequent calendar year regardless of when subsection (e) of Code Section 33-25-4 becomes operative.
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For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values or both which are guaranteed in the original policy;
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Plan Type A: At any time policyholder may withdraw funds only (1) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer, or (2) without such adjustment but in installments over five years or more, or (3) as an immediate life annuity, or (4) no withdrawal permitted;
Plan Type B: Before expiration of the interest rate guarantee, policyholder may withdraw funds only (1) with adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer, or (2) without such adjustment but in installments over five years or more, or (3) no withdrawal permitted. At the end of interest rate guarantee, funds may be withdrawn without such adjustment in a single sum or installments over less than five years;
Plan Type C: Policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five years either (1) without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer, or (2) subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund;
Provided that for any life insurance policy issued on or after the effective date of subsection (h) of Code Section 33-25-4 for which the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for such excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than such excess premium, the reserve according to the Commissioner’s reserve valuation method as of any policy anniversary occurring on or before the assumed ending date defined in this subsection as the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than such excess premium shall, except as otherwise provided in subsection (l) of this Code section, be the greater of the reserve as of such policy anniversary calculated as described in the preceding paragraph and the reserve as of such policy anniversary calculated as described in that paragraph, but with (i) the value defined in subparagraph (A) of that paragraph being reduced by 15 percent of the amount of such excess first year premium, (ii) all present values of benefits and premiums being determined without reference to premiums or benefits provided for by the policy after the assumed ending date, (iii) the policy being assumed to mature on such date as an endowment, and (iv) the cash surrender value provided on such date being considered as an endowment benefit. In making the above comparison, the mortality and interest bases stated in subsections (e) and (f) of this Code section shall be used.
as determined by regulations promulgated by the Commissioner.
(A) Three and one-half percent interest or, in the case of policies and contracts other than annuity and pure endowment contracts issued on or after July 1, 1973, 4 percent interest for such policies issued prior to July 1, 1979, 5 1/2 percent interest for single premium life insurance policies, and 4 1/2 percent interest for all other such policies issued on or after July 1, 1979;
(B) For all ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in such policies, the Commissioners 1958 Standard Ordinary Mortality Tables for such policies issued prior to the operative date of subsection (e) of Code Section 33-25-4 as amended, except that for any category of such policies issued on female risk modified net premiums and present values, referred to in subsection (g) of this Code section, may be calculated at the insurer’s option and with the Commissioner’s approval according to an age not more than six years younger than the actual age of the insured; and for such policies issued on or after the operative date of subsection (e) of Code Section 33-25-4, (i) the Commissioners 1980 Standard Ordinary Mortality Table, or (ii) at the election of the insurer for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors, or (iii) any ordinary mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation promulgated by the Commissioner for use in determining the minimum standard of valuation for such policies;
(C) For all industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in such policies, the 1941 Standard Industrial Mortality Table; for such policies issued prior to the date on which the Commissioners 1961 Standard Industrial Mortality Table becomes applicable in accordance with subsection (d) of Code Section 33-25-4 and for such policies issued on or after such date the Commissioners 1961 Standard Industrial Mortality Table or any industrial mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation promulgated by the Commissioner for use in determining the minimum standard of valuation for such policies;
(D) For individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies, the 1937 Standard Annuity Mortality Table or, at the option of the insurer, the Annuity Mortality Table for 1949, ultimate, or any modification of either of these tables approved by the Commissioner;
(A) All life insurance policies issued in a particular calendar year, on or after the operative date of subsection (e) of Code Section 33-25-4;
(B) All individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1994;
(C) All annuities and pure endowments purchased in a particular calendar year on or after January 1, 1994, under group annuity and pure endowment contracts; and
(D) The net increase, if any, in a particular calendar year after January 1, 1994, in amounts held under guaranteed interest contracts shall be the calendar year statutory valuation interest rates as defined in paragraphs (2) through (5) of this subsection.
Guarantee Duration Weighting Years Factors 10 or less .50 More than 10, but not more than 20 .45 More than 20 .35
I. For annuities and guaranteed interest contracts valued on an issue year basis:
Guarantee Weighting Factor Duration for Plan Type (Years) A B C 5 or less: .80 .60 .50 More than 5, but not more than 10: .75 .60 .50 More than 10, but not more than 20: .65 .50 .45 More than 20: .45 .35 .35
II. For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in Table I increased by:
Plan Type A B C .15 .25 .05
III. For annuities and guaranteed interest contracts valued on an issue year basis (other than those with no cash settlement options) which do not guarantee interest on considerations received more than one year after issue or purchase and for annuities and guaranteed interest contracts valued on a change in fund basis which do not guarantee interest rates on considerations received more than 12 months beyond the valuation date, the factors shown in Table I or derived in Table II increased by:
Plan Type A B C .15 .25 .05
IV. For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guarantee duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of 20 years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guarantee duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence;
V. Plan type as used in the above tables is defined as follows:
VI. An insurer may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue year basis or on a change in fund basis. Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue year basis. As used in this subsection, an issue year basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract, and the change in fund basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund.
(A) The Commissioner has issued an exemption in writing to the company and has not subsequently revoked the exemption in writing; and
(B) The company computes reserves using assumptions and methods used prior to the operative date of the valuation manual in addition to any requirements established by the Commissioner and promulgated by regulation.
History. Code 1981, § 33-10-13 , enacted by Ga. L. 2015, p. 846, § 1/HB 185; Ga. L. 2016, p. 816, § 8/HB 883; Ga. L. 2016, p. 864, § 33/HB 737; Ga. L. 2017, p. 774, § 33/HB 323; Ga. L. 2019, p. 337, § 1-60/SB 132.
The 2019 amendment, effective July 1, 2019, in subsection (b), rewrote the introductory language, which read: “For the purposes of this Code section, the following definitions shall apply on or after the operative date of the valuation manual:”, in paragraph (b)(1), substituted “ ‘Accident” for “The term ‘accident’, in paragraph (b)(2), substituted “ ‘Appointed” for “The term ‘appointed’, in paragraph (b)(3), substituted “ ‘Company’ means an entity, which:” for “The term ‘company’ mean an entity, which” in the introductory language, substituted “Has written” for “has written” at the beginning of subparagraphs (b)(3)(A) and (b)(3)(B), and added a semicolon following “or on claim” at the end of subparagraph (b)(3)(A), in paragraph (b)(4), substituted “ ‘Deposit-type” for “The term ‘deposit-type”, in paragraph (b)(5), substituted “ ‘Life” for “The term ‘life”, in paragraph (b)(6), deleted “The term” at the beginning, in paragraph (b)(7), substituted “ ‘Policyholder” for “The term ‘policyholder”, in paragraph (b)(8), substituted “ ‘Principle-based” for “The term ‘principle-based”, in paragraph (b)(9), substituted “ ‘Qualified” for “The term ‘qualified”, in paragraph (b)(10), substituted “ ‘Tail” for “The term ‘tail”, and, in paragraph (b)(11), substituted “ ‘Valuation” for “The term ‘valuation”; in subsection (i), substituted “this Code section” for “the Code section” at the end; and, in subparagraph (p)(1)(A), substituted “contracts, and for policies” for “contracts. For policies”.
Cross references.
Admissibility of mortality tables as evidence of life expectancy, §§ 24-14-44 and 24-14-45 .
Editor’s notes.
This Code section formerly pertained to valuation of reserves. The former Code section was based on Code 1933, § 56-912, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1962, p. 487, § 1; Ga. L. 1973, p. 617, § 1; Ga. L. 1979, p. 1407, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 1982, p. 650, § 1; Ga. L. 1983, p. 3, § 24; Ga. L. 1984, p. 22, § 33; Ga. L. 1985, p. 149, § 33; Ga. L. 1993, p. 483, §§ 1-5 and was repealed by Ga. L. 2015, p. 846, § 1/HB 185, effective July 1, 2015.
Administrative rules and regulations.
Life and annuity tables, Official Compilation of the Rules and Regulations of the State of Georgia, Rules of Comptroller General, Commissioner of Insurance, Chapter 120-2-39.
Actuarial opinion and memorandum regulation, Official Compilation of the Rules and Regulations of the State of Georgia, Rules of Comptroller General, Commissioner of Insurance, Chapter 120-2-74.
Law reviews.
For article discussing the use of mortality tables in determining the value of life earnings of the deceased in wrongful death actions, with emphasis on the Carlisle table, see 9 Ga. St. B.J. 293 (1973).
For article surveying recent legislative and judicial developments regarding Georgia’s insurance laws, see 31 Mercer L. Rev. 117 (1979).