Sec. 26. (a) The interest rates used in determining the minimum standard for the valuation of the following are the calendar year statutory valuation interest rates described in this section:
(1) Life insurance contracts issued in a particular calendar year, on or after the operative date of IC 27-1-12-7(dd).
(2) Individual annuity and pure endowment contracts issued in a particular calendar year after December 31, 1981.
(3) Annuities and pure endowments purchased in a particular calendar year after December 31, 1981, under group annuity and pure endowment contracts.
(4) A net increase in a particular calendar year after January 1, 1982, in amounts held under guaranteed interest contracts.
(b) Except as provided in subsection (c), the calendar year statutory valuation interest rate, I, is determined as follows, and the results must be rounded to the nearest one-quarter of one percent (1/4 of 1%):
(1) For life insurance,
I = .03 + W(R1 - .03) + W/2(R2 - .09)
(2) For single premium 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 specified in this section, and
W is the weighting factor specified in this section.
(3) For:
(A) other annuities; and
(B) guaranteed interest contracts;
with cash settlement options, valued on an issue year basis, except as provided in subdivision (2), the formula for life insurance specified in subdivision (1) applies to annuities and guaranteed interest contracts with guarantee durations in excess of ten (10) years and the formula for single premium immediate annuities described in subdivision (2) applies to annuities and guaranteed interest contracts with guarantee duration of ten (10) years or less.
(4) For:
(A) other annuities; and
(B) guaranteed interest contracts;
with no cash settlement options, the formula for single premium immediate annuities specified in subdivision (2).
(5) For:
(A) other annuities; and
(B) guaranteed interest contracts;
with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities specified in subdivision (2).
(c) If the calendar year statutory valuation interest rate for a life insurance contract issued in a calendar year determined without reference to this subsection differs from the corresponding actual rate for similar contracts issued in the immediately preceding calendar year by less than one-half of one percent (1/2 of 1%), the calendar year statutory valuation interest rate for the life insurance contract is equal to the corresponding actual rate for the immediately preceding calendar year. For purposes of this subsection, the calendar year statutory valuation interest rate for life insurance contracts issued in a calendar year is determined for 1980 (using the reference interest rate defined in 1979) and must be determined for each subsequent calendar year regardless of when IC 27-1-12-7(dd) becomes operative.
(d) The weighting factors referred to in the formulas specified in subsection (b) are as follows:
(1) Weighting factors for life insurance: