Current through Register Vol. 56, No. 18, September 16, 2024
(a) All
individual annuities shall be filed with the Commissioner pursuant to
17B:25-18; P.L. 1995, c.73,
sections 16 and 17; and N.J.A.C. 11:4-40 prior to being delivered or issued for
delivery in this State.
(b)
Individual annuity contract forms shall not contain any provisions which are
unjust, unfair, inequitable, ambiguous, misleading, likely to result in
misinterpretation or are contrary to law.
(c) All individual annuities shall satisfy
the following conditions:
1. If a form
guarantees an interest rate of less than three percent during the accumulation
phase, the insurer shall include with the submission a demonstration that
policy values and benefits are not less than the minimum nonforfeiture amounts
specified in N.J.S.A. 17B:25-20g.
2. If a form offers varying interest rate
guarantee periods, specimen specification pages shall be submitted for each of
the various guarantee periods.
3.
The same contract form shall not be issued as both an immediate and a deferred
annuity.
4. The form shall contain
a provision describing any method for adjusting benefits and values on the
basis of misstatement of age or sex. Interest may be applied in determining
overpayments and underpayments at a rate specified in the form. The same
specified rate shall apply to overpayments and underpayments.
(d) An insurer shall use the same
form for field issue and home office issue contracts when the contract terms
are written so as to make the difference in the administrative aspect of the
issuance and delivery process negligible.
1.
The application and policy for field issue individual annuities shall be
submitted as separate forms with separate identifying form numbers. The
application shall not be substituted for or obscure the policy face
page.
2. Coverage under a field
issue contract shall be effective no later than the date the policy is
delivered to the owner. Field issue contracts shall not provide for delayed,
deferred or conditional effective dates. Suicide and contestability periods
shall commence no later than the effective date of coverage.
3. Submissions of field issue forms shall
include a certification from an officer of the insurer that the insurer will be
bound by all information recorded by the agent on the application, including,
but not limited to, the initial interest rate and the initial interest rate
guarantee period, even in the case of errors.
(e) Payment of premiums for individual
annuities may be made by credit card. Submissions of forms which permit payment
by credit card shall include a separate certification from an officer of the
insurer that the premium will be considered paid when the credit card facility
is billed.
(f) The form may contain
language that permits the insurer unilaterally to amend or modify the form to
satisfy any applicable law. However, the owner shall be permitted to refuse any
such change unless noncompliance would cause the contract to be null and void
or fail to comply with New Jersey or Federal law.
(g) The form shall be amended or endorsed to
reflect any changes or modifications made to the form subsequent to
issue.
(h) Death benefits in
individual annuities will be considered subsidiary or incidental if they
satisfy one of the following conditions:
1. A
death benefit equal to or less than the contract value (annuity account value
or surrender value);
2. A death
benefit equal to or less than a "highest periodic value" calculated for any
prior period for which the contract was in force (for instance, highest
contract anniversary value, highest monthly value, highest five-year value)
adjusted for subsequent premiums and withdrawals. Such a death benefit
provision would only be applicable to an equity-indexed, market value adjusted,
or other indexed contract with the potential for increase or decrease in the
annuity value;
3. A death benefit
equal to or less than the greater of the contract value or the accumulation of
premiums at a specified interest rate (adjusted for withdrawals), not to exceed
200 percent of premiums, such premiums to be reduced by any
withdrawals;
4. A death benefit
equal to or less than a percentage of the "earnings" or "gain" on the contract
(defined as the contract value less premiums paid plus withdrawals), provided
that the amount of the death benefit in addition to the contract value is no
greater than 50 percent of the gain on the contract;
5. A death benefit based on a combination of
an "accumulation" death benefit ((h)3 above) and a death benefit based upon the
"gain" of the contract ((h)4 above), provided that the combined amount does not
exceed the greater of the two death benefits described in (h)3 and 4 above;
or
6. Any other death benefit which
a qualified actuary, as defined in
11:4-47.2, certifies and
demonstrates to the Department has an expected and/or maximum value that is
within 25 percent of the value of a death benefit permitted by (h)1 through 5
above.
