Current through Register Vol. 46, No. 39, September 25, 2024
(a) Each statement
of preliminary information furnished to an applicant pursuant to section
3209 of the
Insurance Law shall contain a description of the market-value adjustment
formula contained in the policy. The description of the market-value adjustment
formula shall include:
(1) the provisions of
the formula, a description of each of the elements of the formula, including if
the formula is based on an index of publicly traded obligations, the nature of
the index and the manner in which it is used in the formula, and identification
of the source or publication where any data used in the formula may be
found;
(2) a statement of the
frequency with which adjustments made in accordance with the formula will be
made;
(3) a statement of the points
in time when cash surrender benefits are available without application of the
formula, and for how long they are available on an unadjusted basis;
(4) a prominent statement that the
application of the formula may result in both upward and downward adjustments
of cash surrender benefits and loan values;
(5) numerical examples of such upward and
downward adjustments;
(6) a
prominent statement as to any surrender charges and the periods during which
the charges may be made;
(7) in the
case of flexible premium policies, a statement as to any separate treatment of
different premiums as to guaranteed rates, market-value adjustments, surrender
charges, specified time intervals and guaranteed benefit dates; and
(8) a statement that loan repayments will be
treated as a current premium remittance for interest crediting and subsequent
market-value adjustment purposes.
(b)
(1) The
annual report required under section
4221
(a)(7) of the Insurance Law shall, in
addition to the information called for by that section, disclose any amount by
which cash surrender benefits and policy loan values were adjusted in
accordance with the market-value adjustment formula since the last annual
report. The report should also indicate:
(i)
that future application of the market-value adjustment formula may result in
both upward and downward adjustments to the cash surrender benefits and policy
loan values; and
(ii) the date on
which cash surrender benefits will be determined without the use of such
formula.
(2) The format
of the report shall be filed with the department with the policy form
submission.
(c) In
addition to complying with the provisions of Part 219 of this Title, any
advertisement mentioning cash surrender benefits or policy loan values shall
include:
(1) a statement of the frequency with
which adjustments made in accordance with the formula will be made;
(2) a statement that the application of the
formula may result in both upward and downward adjustments of cash surrender
benefits and loan values; and
(3) a
statement of the points in time when cash surrender values are available
without application of the formula.
(d) The disclosure requirements of this
section are in addition to any other disclosure requirements that the
superintendent may prescribe for policies subject to section
4232
(b) or
4518 of the
Insurance Law or that are otherwise imposed by law.
