[lmi-commits] [lmi] master da2e038 1/6: Clarify lmi's 7702 treatment of flat extras

[Greg Chicares]

branch: master
commit da2e038c614dee5e88d1048628c6cd0b4b2abf53
Author: Gregory W. Chicares <gchicares@sbcglobal.net>
Commit: Gregory W. Chicares <gchicares@sbcglobal.net>

    Clarify lmi's 7702 treatment of flat extras
    
    The original wording:
      for calculating UL &sect;7702 and &sect;7702A limits
    was more restrictive than the replacement:
      for all &sect;7702 and &sect;7702A purposes
    leading the reader to wonder what was intended to be excluded.
    Considering all possibilities:
      {GLP, GSP, 7PP, NSPs, CVAT corridor, DCV}
    the first three are clearly "limits", and the next two are specified
    to use the same 7702 mortality; but so is the last:
      Update DCV for CVAT contracts. Accumulate it like
      AV, but using §7702 assumptions.
    so this clarification does not actually change the meaning.
    
    Furthermore, this change is consonant with [8.4]:
      We may indeed choose to use 100% of safe-harbor mortality in all cases
      as an administrative simplification, in which case changes in table
      ratings or flat extras are not adjustment events; that is the only
      option lmi currently supports.
---
 7702.html | 5 +++--
 1 file changed, 3 insertions(+), 2 deletions(-)

diff --git a/7702.html b/7702.html
index a30f5cc..6581cdb 100644
--- a/7702.html
+++ b/7702.html
@@ -1235,8 +1235,9 @@ event occurs if they are later reduced or forgiven.
 </p>
 
 <p>
-6 At any rate, it is probably better to ignore flat extras
-altogether for calculating UL &sect;7702 and &sect;7702A limits;
+6 At any rate, for UL contracts,
+it is probably better to ignore flat extras altogether
+for all &sect;7702 and &sect;7702A purposes;
 that is what <tt>lmi</tt> does.
 Flat extras normally flow through the AV,
 and IRS has expressed concern that they may therefore earn