Current through August 31, 2023
01.
Illustrations. Illustrations of benefits payable under any
variable contract providing benefits payable in variable amounts cannot include
projections of past investment experience into the future or attempted
predictions of future investment experience. (3-31-22)
02.
Payment of Periodic Stipulated
Payments. No individual variable annuity contract calling for the
payment of periodic stipulated payments will be delivered or issued for
delivery unless it contains in substance the following provisions or provisions
which are more favorable to the holders of such contracts: (3-31-22)
a. The grace period is for one (1) month, but
not less than thirty (30) days, in which any stipulated payment to the insurer
falling due after the first may be made, during which period of grace the
contract will continue in force. The contract may include a statement of the
basis for determining the date that any such payment received during the period
of grace is applied to produce the values under the contract;
(3-31-22)
b. At any time within one
(1) year from the date of default in making periodic stipulated payments to the
insurer during the life of the annuitant, unless the cash surrender value has
been paid, the contract may be reinstated upon payment to the insurer of such
overdue payments as prescribed by the contract, and payment or reinstatement of
all indebtedness to the insurer on the contract, including interest. The
contract may include a statement of the basis for determining the date which
the amount to cover such overdue payments and indebtedness is applied to
produce the values under the contract; (3-31-22)
c. Specifying the options available in the
event of default in a periodic stipulated payment, which may include an option
to surrender the contract for a cash value as determined by the contract, and
will include an option to receive a paid-up annuity if the contract is not
surrendered for cash, the amount of such paid-up annuity being determined by
applying the value of the contract at the annuity commencement date in
accordance with the terms of the contract. (3-31-22)
03.
Investment Increment Factor.
Any individual variable annuity contract delivered or issued for delivery in
this state will stipulate the investment increment factor to be used in
computing the dollar amount of variable benefits or other contractual payments
or values thereunder, and may guarantee that expense and/or mortality results
do not adversely affect such dollar amounts. If not guaranteed, the expense and
mortality factors are also to be stipulated in the contract. In computing the
dollar amount of variable benefits or other contractual payments or values
under an individual variable contract: (3-31-22)
a. The annual net investment increment
assumption will not exceed five percent (5%), except with the approval of the
Director. (3-31-22)
b. To the
extent that the level of benefits may be affected by future mortality results,
the mortality factor is to be determined from the Annuity Mortality Table for
1949, Ultimate, or any modification of that table not having a higher mortality
rate at any age, or, if approved by the Director, from another table.
(3-31-22)
c. "Expense," as used in
this subsection, may exclude part or all taxes, as stipulated in the contract.
(3-31-22)
04.
Reserve Liability. The reserve liability for variable contracts is
to be established pursuant to the requirements of the standard valuation law in
accordance with actuarial procedures that recognize the variable nature of the
benefits provided, and any mortality guarantees. (3-31-22)
