Standard Non-Forfeiture Law

Section 3: Interest
A. The nonforfeiture interest rate for any life insurance policy issued in a particular calendar year beginning on and after the operative date of the Valuation Manual shall be equal to 125% of the
calendar year statutory valuation interest rate defined for the NPR in the Valuation Manual for a life insurance policy with nonforfeiture values, whether or not such sections apply to such policy for valuation purposes, rounded to the nearer one-quarter of 1%, provided, however, that the nonforfeiture interest rate shall not be less than the applicable interest rate prescribed to meet the definition of life insurance in the Cash Value Accumulation Test under Section 7702 (Life Insurance Contract Defined) of the U.S. Internal Revenue Code. 

Guidance Note: For flexible premium universal life insurance policies as defined in Section 3.D of the Universal Life Insurance Model Regulation (#585), this is not intended to prevent an interest
rate guarantee less than the nonforfeiture interest rate.  (p02-1)

2021 - NAIC Valuation Manual

2005-2 NAIC Proc. (p1687)

Report of the American Academy of Actuaries

Executive Summary

Historical Developments

The original Standard Nonforfeiture Law for Life Insurance (SNFL) was developed in the 1940's. Prior to the NAIC annuity nonforfeiture law, the states of New Jersey, New York and Washington had annuity nonforfeiture rules. All sets of rules resembled the SNFL.3,5

In August of 1975, the NAIC appointed a subcommittee to explore development of a model nonforfeiture requirement for annuities.