Current through Register 2024 Notice Reg. No. 52, December 27, 2024
(a) At any point in time, an annuity contract
(or certificate) without an equity-indexed benefit will have one nonforfeiture
rate and one nonforfeiture amount applicable to the entire contract that is
determined in compliance with Section
10168.25 of
the Insurance Code.
(b) For an
annuity contract (or certificate) in which equity-indexed benefits are
available the annuity contract (or certificate) may have more than one
nonforfeiture rate applicable to the contract (or certificate) subject to the
following:
(1) If the contract has a non
equity-indexed benefit, the nonforfeiture interest rate applicable to the non
equity-indexed benefit shall be determined in compliance with Subsection
10168.25(d)
of the Insurance Code.
(2) If an
additional reduction is elected for equity-indexed benefits, reduced
nonforfeiture interest rates may apply to each equity-indexed benefit for which
the additional reduction is elected in compliance with Subsection
10168.25(e)
of the Insurance Code and Section
2523.5 of this Article.
(3) The minimum nonforfeiture amount for the
contract is determined by calculating a nonforfeiture amount, without any
reduction for indebtedness to the company on the contract including interest
due and accrued on the indebtedness, for each equity-indexed and non
equity-indexed benefit using the nonforfeiture interest rates described in this
subsection, summing the results, and then deducting any indebtedness to the
company on the contract including interest due and accrued on the
indebtedness.
(4) When contract
value is transferred (see the example of transfer of minimum nonforfeiture
amount in Section
2523.6, Appendix B)
(A) From a benefit, the benefit's minimum
nonforfeiture amount is reduced by the benefit's minimum nonforfeiture amount
prior to the transfer multiplied by the proportion of the benefit's contract
value that is transferred;
(B) To a
benefit, the benefit's minimum nonforfeiture amount is increased by the sum of
all reductions in minimum nonforfeiture amounts determined under (A) multiplied
by the proportion of total contract value that is transferred to that
benefit;
(C) For purposes of the
calculations specified in (A) and (B) above, the contract value must first be
reduced by any fees associated with the transfer.
(5) In the case of a withdrawal from a
benefit in which the amount of withdrawal exceeds the benefit's nonforfeiture
amount, the insurer shall treat the excess withdrawal in a manner at least as
favorable to the contract holder as deducting the excess withdrawal from the
nonforfeiture amounts of other benefits in order from lowest to highest
nonforfeiture interest rate.
(6)
Any contract charge or premium taxes paid by the company must be allocated to a
benefit's minimum nonforfeiture amount based on the percentage of that
benefit's contract value to the total contract value.
1. New
section filed 12-19-2012; operative 12-19-2012 pursuant to Government Code
section
11343.4
(Register 2012, No. 51).
Note: Authority cited: Sections
10168.25(f)
and
10168.92,
Insurance Code. Reference: Section
10168.25,
Insurance Code.
