Current through Register 2024 Notice Reg. No. 38, September 20, 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.
