Current through Register Vol. 47, No. 12, March 26, 2025
(a) Individual
separate account annuity contracts. No individual separate account annuity
contract shall be delivered or issued for delivery in this State unless it
contains in substance the following provisions, to the extent that such
provisions are applicable to such contract, or provisions which in the opinion
of the superintendent are appropriate to individual separate account annuity
contracts and are more favorable to the holders of such contracts:
(1) A provision that there shall be a period
of grace, either of 30 days or of one month, within which any stipulated
payment to the insurer falling due after the first may be made, during which
period of grace the contract shall continue in full force. The contract shall
include a statement of the basis for determining the date as of which any such
payment received during the period of grace shall be applied to produce the
values arising therefrom under the contract.
(2) A provision that at any time within one
year from the date of default in making stipulated payments to the insurer,
during the life of the annuitant and unless the cash surrender value has been
paid, the contract will be reinstated, on the application of the person
entitled thereto pursuant to the provisions of the contract, upon payment to
the insurer of such overdue payments as required by the contract and of all
indebtedness to the insurer on the contract. The contract shall include a
statement of the basis for determining the date as of which the amount to cover
such overdue payments and indebtedness shall be applied to produce the values
arising therefrom under the contract. Where appropriate, the contract may
contain a provision requiring, as a condition for reinstatement, evidence of
insurability, including good health, reasonably satisfactory to the
insurer.
(3) A provision specifying
the options available, prior to the commencement date of the annuity, in the
event of default in a stipulated payment or of surrender of the contract. Such
options shall include an option to receive the cash surrender value of the
contract or an option to receive a paid-up annuity to commence at the maturity
date provided in the contract, if the contract is not surrendered for cash. The
contract shall specify the method by which, and the date as of which, the
accumulated value of the contract shall be determined and may provide for the
deduction therefrom of a reasonable charge for unamortized acquisition expenses
in arriving at the amount of cash surrender value payable. If only the option
to receive a paid-up annuity is available, the accumulated value of the
contract in the separate account or accounts of the company at the time of
default shall, at the option of the contractholder, be transferred to the
general account of the company to provide a fixed dollar paid-up annuity. Any
amounts so transferred shall be considered as cash surrender values for the
purpose of paragraph (4) of this section. The kind and amount of the paid-up
annuity and the conditions of its payment shall be in accordance with the
provisions of the contract and the purchase rates stipulated therein.
(4) In connection with a reservation of right
to defer cash surrender payments, any individual separate account annuity
contract shall provide, if and to the extent permitted or required under the
Federal Investment Company Act of 1940, as amended, and any other applicable
Federal or State law, either:
(i) that the
company reserves the right, at its option, to defer the determination and
payment of any cash surrender value for a period of six months after demand
therefor with surrender of the contract;
(ii) that the company reserves the right, at
its option, to defer the determination and payment of any cash surrender value
for a period of nine months in which installments will be paid; or
(iii) that the company reserves the right, at
its option, to defer the payment of any cash surrender value in accordance with
the deferment provisions of the Federal Investment Company Act of 1940, as
amended.
(b)
Group separate account annuity contracts. No group separate account annuity
contract shall be delivered or issued for delivery in this State and no
certificate shall be used in connection therewith unless it contains in
substance the following provisions to the extent that such provisions are
applicable to such contract or to such certificate, as the case may be, or
provisions which in the opinion of the superintendent are appropriate to group
separate account annuity contracts and are more favorable to annuitants, or not
less favorable to annuitants and more favorable to the holders of such
contracts:
(1) A provision that there shall
be a period of grace either of 30 days or of one month, within which any
stipulated payment to be remitted by the holder to the insurer, falling due
after one year from date of issue may be made, during which period of grace the
contract shall continue in full force. The contract shall include a statement
of the basis for determining the date as of which any such payment received
during the period of grace shall be applied to produce the values arising
therefrom under the contract.
(2) A
provision, with an appropriate reference thereto in the certificate, specifying
the options available to an annuitant who contributes to the cost of the
annuity, or to the annuitant's beneficiary or beneficiaries in the event of:
(i) the termination of employment or the
termination of the group separate account annuity contract, while the annuitant
is alive and prior to the commencement date of the annuity; or
(ii) the annuitant's death prior to the
commencement date of the annuity. Such options shall, in any case, include
either:
(a) an option to receive a cash
payment at least equal to the aggregate amount of the annuitant's contributions
made under the contract, without interest; or
(b) an option to receive a cash payment equal
to the accumulated value of the annuitant's contributions made under the
contract.