NAC688A.200. Rate of interest for determination.

     1. Except as otherwise provided in subsection 2, for the purposes of NRS 688A.363, the rate of interest used to determine the minimum nonforfeiture amount must be an annual rate of interest determined as the lesser of:

     (a) The statutorily provided rate of 3 percent per annum; or

     (b) A rate equal to 125 basis points less than the 5-Year Treasury Constant Maturity Rate as reported by the Federal Reserve rounded to the nearest 0.05 of a percent:

          (1) If a date is specified in a contract for the determination of the interest rate, on the date specified in the contract; or

          (2) If a period is specified in a contract for the determination of the interest rate, the average rate for the period specified in the contract.

     2. A deferred annuity contract that provides for the substantive participation in an equity indexed benefit may provide that the rate calculated pursuant to paragraph (b) of subsection 1 may be reduced by up to an additional 100 basis points. The amount of an additional reduction to the interest rate must not exceed the value of the equity indexed benefit. The Commissioner may require an insurer to substantiate that the additional reduction to the interest rate does not exceed the value of the equity indexed benefit. If the Commissioner finds that the additional reduction to the interest rate exceeds the value of the equity indexed benefit, the Commissioner may disallow or limit the amount of the additional reduction.

     3. If the rate calculated pursuant to paragraph (b) of subsection 1 or subsection 2 is less than 1 percent per annum, the interest rate used to determine the minimum nonforfeiture amount must be 1 percent per annum.

     4. For the purposes of subparagraphs (1) and (2) of paragraph (b) of subsection 1, the date or period specified in a contract for the determination of the 5-Year Treasury Constant Maturity Rate shall be a date or period between the effective date of the interest rate and 15 months prior to the effective date of the interest rate.

     5. Except as otherwise provided in subsection 4, the interest rate calculated pursuant to NRS 688A.363 and this section must apply for the term of the deferred annuity contract.

     6. A deferred annuity contract may provide for a redetermination of the interest rate used to determine the minimum nonforfeiture amount. Any redetermination of the interest rate must be made pursuant to subsections 1 and 2. If the deferred annuity contract provides that the interest rate used to determine the minimum nonforfeiture amount will be redetermined, the contract shall set forth:

     (a) The dates upon which a redetermination will be made;

     (b) The periods for which a redetermined rate will apply; and

     (c) The method that will be used for a redetermination.

     7. As used in this section, “basis point” means one-hundredth of 1 percent of yield.

     (Added to NAC by Comm’r of Insurance by R130-03, eff. 11-24-2003)