Current through Register Vol. 56, No. 18, September 16, 2024
(a) All
individual life insurance and annuities contracts on a variable basis shall
include the following:
1. A provision
describing the periodic reports;
2.
A provision specifying any rights for deferral. Any deferral of a minimum
guaranteed death benefit for an individual variable life insurance contract
shall comply with
17B:25-11; and
3. A provision describing any conditions for
partial withdrawals, partial surrenders, loans, transfers and new deposits. Any
required minimum amount for a partial withdrawal, partial surrender, loan or
transfer shall not exceed $ 1,000.
(b) In addition to the standards set forth at
(a) above, all individual life insurance and annuities contracts on a variable
basis shall comply with the requirements of
17B:28-1 et seq., and with all
statutes and regulations applicable to non-variable life and annuity forms
which are not inconsistent with the variable nature of the form.
(c) All individual life insurance contracts
on a variable basis shall include a period of free review as described at
11:4-41.3(b)1.
The amount to be returned to the policyholder following cancellation of the
contract pursuant to this subsection shall be no less than premiums (including
fees and charges) applied to the separate account, adjusted for investment
gains and losses, plus premiums (including fees and charges) applied to any
general account option.
(d)
Individual life insurance and annuities contracts on a variable basis may
include the following:
1. The contract may
permit monies to be deposited into a general account fund. Such fund shall be
subject to the Department's requirements for individual general account
contracts, including, but not limited to, those set forth at N.J.A.C. 11:4-41
and 11:4-43.
2. The contract may
contain variable wording, identified by the use of brackets, to describe the
separate account funds and related charges. Variable wording may also be used
in application forms which describe separate account funds.
(e) Death benefits in annuity
contracts issued on a variable basis 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;
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 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 ((e)3
above) and a death benefit based upon the "gain" of the contract ((e)4 above),
provided that the combined amount does not exceed the greater of the two death
benefits described in (e)3 and 4 above;
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 (e)1 through 5
above.
