New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 4 - ACTUARIAL SERVICES
Subchapter 43 - INDIVIDUAL ANNUITY CONTRACT FORM STANDARDS
Section 11:4-43.5 - Individual deferred annuities

Universal Citation: NJ Admin Code 11:4-43.5

Current through Register Vol. 56, No. 18, September 16, 2024

(a) Insurers shall include a provision in all individual flexible premium annuity forms specifying any upper and/or lower dollar limits on premium payments, which the insurer may waive in a uniform and nondiscriminatory manner upon written notice of any new limits to the owner. Forms shall describe the initial limits and the required written notice of any new limits. Insurers shall not arbitrarily refuse premium payments.

(b) An annuity form shall only be identified as a flexible premium annuity and use the corresponding formula for the derivation of the minimum nonforfeiture amount for a contract providing flexible considerations set forth at N.J.S.A. 17B:25-20g(1) if the owner is permitted to pay premiums for a period of no less than five years. Notwithstanding this requirement, insurers may issue individual flexible premium deferred annuities that require annuitization at a fixed age to persons who are less than five years from such fixed age. Any annuity contract providing flexible premiums for less than five years shall use the formula for derivation of the minimum nonforfeiture amount for a contract providing a single consideration set forth at N.J.S.A. 17B:25-20g(3).

(c) An annuity form shall not be identified as a single premium contract if it contains a provision for additional premiums.

(d) An annuity form shall not permit a single premium annuity to be paid in installments.

(e) Insurers shall provide written notice to all prospective purchasers of individual flexible premium annuities at or before application. The notification form shall be submitted to the Department upon filing any individual flexible premium annuity form. The written notice shall include the following:

1. A statement that cash values under a flexible premium annuity where only one premium is paid can be lower than those under a single premium annuity, and that purchase of a flexible premium annuity may be inappropriate in such a case; and

2. A signature by the purchaser.

(f) The requirements at (e) above shall be waived if the insurer includes in its submission a separate actuarial memorandum which demonstrates that the values provided under the form on the guaranteed basis equal or exceed minimum values as described at N.J.S.A. 17B:25-20g for both a single premium or flexible premium contract.

(g) An individual deferred annuity form which describes credited interest in terms of a published index shall state how interest shall be credited upon the discontinuance of the index, and that any substitute index is subject to Department approval.

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