[lmi-commits] [lmi] master 1c3cea9 2/5: Update 7702 documentation for H.R. 6800

[Greg Chicares]

branch: master
commit 1c3cea9178d80590c9440d4a266c8b136ee763ac
Author: Gregory W. Chicares <gchicares@sbcglobal.net>
Commit: Gregory W. Chicares <gchicares@sbcglobal.net>

    Update 7702 documentation for H.R. 6800
---
 7702.html | 20 ++++++++++++++++----
 1 file changed, 16 insertions(+), 4 deletions(-)

diff --git a/7702.html b/7702.html
index fec314c..01e8f8d 100644
--- a/7702.html
+++ b/7702.html
@@ -905,11 +905,23 @@ skipped by programmers.
 2 &sect;7702 prescribes the interest basis for all &sect;7702 and
 &sect;7702A calculations as the interest rate actually guaranteed
 in the contract, or a statutory rate if greater.
-The statutory rate is 4% for GLP and 6% for GSP.
-It is 4% for
-all CVAT and &sect;7702A calculations, except that the necessary
+The original 1984 statutory rate was 4% for GLP, 6% for GSP,
+and 4% for
+all CVAT and &sect;7702A calculations except that the necessary
 premium for guideline contracts is defined in terms of the
-guideline limit.
+guideline limit. Beginning in 2021, H.R. 6800 provided for those
+rates to vary, depending on certain published values.
+<!-- [draft of a new footnote] Prevalent
+industry opinion holds that statutory interest should be treated
+as an aspect of plan code: determined on the issue date, and not
+changing thereafter (except in the case of a "deemed exchange":
+see Adney et al., "They Go Bump in the Night",
+Society of Actuaries, Taxing Times Supplement May 2012).
+This is the way mortality is conventionally treated. For example,
+the interest and mortality basis of a 2001 CSO contract with a
+4% CVAT rate would not change to 2017 CSO or 2% due to an
+adjustment event or material change in 2021.
+-->
 </p>
 
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