I am working on Net Premium Reserve Method used in PBR and I am not able to understand the meaning of this
“The reference interest rate R for a calendar year shall equal the lesser of
the average over a period of 36 months and the average over a period of
12 months, ending on June 30 of the calendar year preceding the year of
issue, of the monthly average of the composite yield on seasoned corporate
bonds, as published by Moody’s Investors Service (MIS).”
Can someone explain me this in a simpler form, probably using a mathematical equation or using an example? Thanks
I have also attached the screenshot of VM-20 for your reference.