Commissioners' Annuity Reserve Valuation Method - CARVM

DEFINITION of 'Commissioners' Annuity Reserve Valuation Method - CARVM'

A term denoting statutory cash reserves for annuities. CARVM can be calculated according to several different methods. The cash reserve of the annuity must be greater or equal to the value calculated by the CARVM. The CARVM is equal to the greatest net present value of all future guaranteed benefits.

BREAKING DOWN 'Commissioners' Annuity Reserve Valuation Method - CARVM'

CARVM calculations do not include expenses or lapses in policies. However, they do include any nonforfeiture benefits that exceed premiums that are required in the future. These reserves must be maintained by each annuity carrier according to state law.

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