New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 4 - ACTUARIAL SERVICES
Subchapter 61 - RETAINED ASSET ACCOUNTS
Section 11:4-61.3 - Disclosure and filing requirements

Universal Citation: NJ Admin Code 11:4-61.3

Current through Register Vol. 56, No. 6, March 18, 2024

(a) All insurers offering RAAs in this State shall, prior to the issuance of a group policy which provides for the payment of claims through an RAA or on which the opening of an RAA is an option, and prior to the transfer of a death benefit on an individual or group policy to an RAA, provide to the prospective owner of the group policy or to the beneficiary of the death benefit a written notice disclosing in easy-to-understand language, pertinent information related to the use of an RAA which shall include, at a minimum, the following:

1. A statement that payment of the full benefit amount is accomplished by delivery of the draft book/checkbook or similar instrument;

2. A statement that one draft or check may be written to access the entire amount, including interest, of the RAA at any time;

3. Notice whether other available settlement options are preserved until the entire balance is withdrawn or the balance drops below the insurer's minimum balance requirement;

4. A statement identifying the account as either a checking or draft account and an explanation of how the account works;

5. Information about the account services provided and contact information where the beneficiary may request and obtain more details about such services;

6. A description of fees charged, if applicable;

7. Information about the frequency of statements showing the current account balance, the interest credited, drafts/checks written and any other account activity, and the method of delivery of such statements (that is, via postal mail, e-mail, etc.);

8. How the interest rate to be credited to the account will be determined;

9. A statement that the interest earned on the account may be taxable;

10. A statement that RAA funds held by insurance companies are not guaranteed by the Federal Deposit Insurance Corporation (FDIC), but are guaranteed by the State Guaranty Associations. The beneficiary should be advised to contact the National Organization of Life and Health Insurance Guaranty Associations ((www.nolhga.com [File Link Not Available])) to learn more about coverage or limitations to his or her account; and

11. A description of the insurer's policy regarding RAAs that may become inactive.

(b) Insurers may provide any additional information deemed appropriate provided that such information is not inconsistent with the information required to be provided pursuant to (a) above.

(c) All insurers shall submit to the Department for its review copies of forms and other written material that describe RAAs offered by the insurer being provided by the insurer to beneficiaries of life insurance policies or to prospective owners of group life policies in accordance with (a) above and copies of all documents utilized by the insurer to establish an RAA, including agreements, claim forms and any other documents containing the information required to be included in such written materials by (a) above. The Department shall notify the filer within 30 days whether the information fails to comply with this subchapter.

(d) All insurers shall provide all beneficiaries of life insurance policies issued in this State information that describes all the settlement options available to the beneficiaries. The information shall be provided with the claim form and use easy-to-understand language that explains how each settlement option works, its benefits to the beneficiaries, how to select the options, and shall include contact information for questions about the options. This information shall not be required to be filed with the Department.

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