Page:United States Statutes at Large Volume 98 Part 1.djvu/775

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 727

5

sion of insurance on retired lives, for premium stabilization, or for a combination thereof. For purposes of paragraph (3), the appropriate rate of interest for any obligation is the higher of the prevailing State assumed interest rate as of the time such obligation first did not involve life, accident, or health contingencies or the rate of interest assumed by the company (as of such time) in determining the guaranteed benefit. "(d) METHOD OF COMPUTING RESERVES FOR PURPOSES OF DETERMINING INCOME.—

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"(1) IN GENERAL.—For purposes of this part (other than section 816), the amount of the life insurance reserves for any Post, p. 748. contract shall be the greater of— "(A) the net surrender value of such contract, or "(B) the reserve determined under paragraph (2). In no event shall the reserve determined under the preceding sentence for any contract as of any time exceed the amount which would be taken into account with respect to such contract as of such time in determining statutory reserves (as defined in section 809(b)(4)(B)). Post, p. 733. "(2) AMOUNT OF RESERVE.—The amount of the reserve deter-

mined under this paragraph with respect to any contract shall J be determined by using— "(A) the tax reserve method applicable to such contract, "(B) the prevailing State assumed interest rate, and "(C) the prevailing commissioners' standard tables for mortality and morbidity adjusted as appropriate to reflect the risks (such as substandard risks) incurred under the contract which are not otherwise taken into account. "(3) TAX RESERVE METHOD.—For purposes of this subsection— "(A) IN GENERAL.—The term 'tax reserve method' means— "(i) LIFE INSURANCE CONTRACTS.—The CRVM in the case of a contract covered by the CRVM. "(ii) ANNUITY CONTRACTS.—The CARVM in the case j ix. • of a contract covered by the CARVM. "(iii) NONCANCELLABLE ACCIDENT AND HEALTH INSURANCE CONTRACTS.—In the case of any noncancellable accident and health insurance contract, a 2-year full preliminary term method. "(iv) OTHER CONTRACTS.—In the case of any contract not described in clause (i), (ii), or (iii)— "(I) the reserve method prescribed by the National Association of Insurance Commissioners which covers such contract (as of the date of issuance), or "(II) if no reserve method has been prescribed by -m f *ti>1the National Association of Insurance Commissioners which covers such contract, a reserve method Vi which is consistent with the reserve method required under clause (i), (ii), or (iii) or under subclause (I) of this clause as of the date of the issuance of such contract (whichever is most appropriate). "(B) DEFINITION OF CRVM AND CARVM.—For purposes of

this paragraph— "(i) CRVM.—The term 'CRVM' means the Commissioners' Reserve Valuation Method prescribed by the

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