Full Text of HB5075 93rd General Assembly
HB5075enr 93RD GENERAL ASSEMBLY
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HB5075 Enrolled |
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LRB093 20967 SAS 46953 b |
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| AN ACT concerning insurance.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Insurance Code is amended by | 5 |
| changing Section 229.4 and adding Section 229.4a as follows:
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| (215 ILCS 5/229.4) (from Ch. 73, par. 841.4)
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| Sec. 229.4. Standard Non-forfeiture Law for Individual | 8 |
| Deferred
Annuities.
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| (1) No contract of annuity issued on or after the operative | 10 |
| date of this
Section except as stated in subsection (11) shall | 11 |
| be delivered or
issued
for delivery in this State unless it | 12 |
| contains in substance the following
provisions or | 13 |
| corresponding provisions which in the opinion of the Director
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| are at least as favorable to the contract holder upon cessation | 15 |
| of payment
of considerations under the contract:
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| (a) That upon cessation of payment of considerations | 17 |
| under a contract,
the company will grant a paid-up annuity | 18 |
| benefit on a plan stipulated in
the contract of such value | 19 |
| as is specified in subsections (3), (4), (5), (6)
and (8).
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| (b) If a contract provides for a lump sum settlement at | 21 |
| maturity, or at
any other time, that upon surrender of the | 22 |
| contract at or prior to the
commencement of any annuity | 23 |
| payments, the company will pay in lieu of any
paid-up | 24 |
| annuity benefit a cash surrender benefit of such amount as | 25 |
| is specified
in subsections (3), (4), (6) and (8). The | 26 |
| company shall reserve the right
to defer the payment of | 27 |
| such cash surrender benefit for a period of 6 months
after | 28 |
| demand therefor with surrender of the contract.
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| (c) A statement of the mortality table, if any, and | 30 |
| interest rates used
in calculating any minimum paid-up | 31 |
| annuity, cash surrender or death benefits
that are | 32 |
| guaranteed under the contract, together with sufficient |
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| information
to determine the amount of such benefits.
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| (d) A statement that any paid-up annuity, cash | 3 |
| surrender or death benefits
that may be available under the | 4 |
| contract are not less than the minimum benefits
required by | 5 |
| any statute of the state in which the contract is delivered
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| and an explanation of the manner in which such benefits are | 7 |
| altered by the
existence of any additional amounts credited | 8 |
| by the company to the contract,
any indebtedness to the | 9 |
| company on the contract or any prior withdrawals
from or | 10 |
| partial surrenders of the contract.
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| Notwithstanding the requirements of this subsection, any | 12 |
| deferred annuity
contract may provide that if no considerations | 13 |
| have been received under
a contract for a period of 2 full | 14 |
| years and the portion of the paid-up
annuity benefit at | 15 |
| maturity on the plan stipulated in the contract arising
from | 16 |
| considerations paid prior to such period would be less than | 17 |
| $20.00
monthly, the company may at its option terminate such | 18 |
| contract by payment
in cash of the present value of such | 19 |
| portion of the paid-up annuity
benefit, calculated on the basis | 20 |
| of the mortality table, if any, and interest
rate specified in | 21 |
| the contract for determining the paid-up annuity benefit,
and | 22 |
| by such payment shall be relieved of any further obligation | 23 |
| under such
contract.
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| (2) The minimum values as specified in subsections (3), | 25 |
| (4), (5), (6)
and (8) of any paid-up annuity, cash surrender or | 26 |
| death benefits available
under an annuity contract shall be | 27 |
| based upon minimum nonforfeiture amounts
as defined in this | 28 |
| subsection.
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| (a) With respect to contracts providing for flexible | 30 |
| considerations,
the minimum nonforfeiture amount at any | 31 |
| time at or prior to the commencement
of any annuity | 32 |
| payments shall be equal to an accumulation up to such time
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| at a rate of interest of 3% per annum of percentages of the | 34 |
| net considerations,
as hereinafter defined, paid prior to | 35 |
| such time, decreased by the sum of
(i) any prior | 36 |
| withdrawals from or partial surrenders of the contract
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| accumulated
at a rate of interest of 3% per annum and (ii) | 2 |
| the amount of any indebtedness
to the company on the | 3 |
| contract, including interest due and accrued, and
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| increased by any existing additional amounts credited by | 5 |
| the company to the
contract.
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| The net considerations for a given contract year used | 7 |
| to define the minimum
nonforfeiture amount shall be an | 8 |
| amount not less than zero and shall be
equal to the | 9 |
| corresponding gross considerations credited to the | 10 |
| contract
during that contract year less an annual contract | 11 |
| charge of $30.00 and less
a collection charge of $1.25 per | 12 |
| consideration credited to the contract
during that | 13 |
| contract year. The percentages of net considerations shall
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| be 65% of the net consideration for the first contract year | 15 |
| and 87 1/2%
of the net considerations for the second and | 16 |
| later contract years.
Notwithstanding
the provisions of | 17 |
| the preceding sentence, the percentage shall be 65% of
the | 18 |
| portion of the total net consideration for any renewal | 19 |
| contract year
which exceeds by not more than two times the | 20 |
| sum of those portions of the
net considerations in all | 21 |
| prior contract years for which the percentage was
65%.
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| (a-5) Notwithstanding the provisions of paragraph (a) | 23 |
| of this
subsection,
the minimum nonforfeiture amount for | 24 |
| any contract issued on or after July 1,
2002 and before | 25 |
| July 1, 2005 shall be based on a rate of interest of 1.5% | 26 |
| per
annum.
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| (b) With respect to contracts providing for fixed | 28 |
| scheduled
considerations,
minimum nonforfeiture amounts | 29 |
| shall be calculated on the assumption that
considerations | 30 |
| are paid annually in advance and shall be defined as for
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| contracts with flexible considerations which are paid | 32 |
| annually, with two
exceptions:
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| (i) The portion of the net consideration for the | 34 |
| first contract year
to be accumulated shall be the sum | 35 |
| of 65% of the net consideration for the
first contract | 36 |
| year plus 22 1/2% of the excess of the net |
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| consideration
for the first contract year over the | 2 |
| lesser of the net considerations for
the second and | 3 |
| third contract years.
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| (ii) The annual contract charge shall be the lesser | 5 |
| of (A) $30.00 or
(B) 10% of the gross annual | 6 |
| consideration.
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| (c) With respect to contracts providing for a single | 8 |
| consideration,
minimum nonforfeiture amounts shall be | 9 |
| defined as for contracts with flexible
considerations | 10 |
| except that the percentage of net consideration used to
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| determine the minimum nonforfeiture amount shall be equal | 12 |
| to 90% and the net
consideration shall be the gross | 13 |
| consideration less a contract charge of
$75.00.
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| (3) Any paid-up annuity benefit available under a contract | 15 |
| shall be
such that its present value on the date annuity | 16 |
| payments are to commence
is at least equal to the minimum | 17 |
| nonforfeiture amount on that date. Such
present value shall be | 18 |
| computed using the mortality table, if any, and the
interest | 19 |
| rate specified in the contract for determining the minimum | 20 |
| paid-up
annuity benefits guaranteed in the contract.
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| (4) For contracts which provide cash surrender benefits, | 22 |
| such cash surrender
benefits available prior to maturity shall | 23 |
| not be less than the present value
as of the date of surrender | 24 |
| of that portion of the maturity value of the
paid-up annuity | 25 |
| benefit which would be provided under the contract at maturity
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| arising from considerations paid prior to the time of cash | 27 |
| surrender reduced
by the amount appropriate to reflect any | 28 |
| prior withdrawals from or partial
surrenders of the contract, | 29 |
| such present value being calculated
on the basis of an interest | 30 |
| rate not more than 1% higher than the interest
rate specified | 31 |
| in the contract for accumulating the net considerations to
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| determine such maturity value, decreased by the amount of any | 33 |
| indebtedness
to the company on the contract, including interest | 34 |
| due and accrued, and
increased by any existing additional | 35 |
| amounts credited by the company to
the contract. In no event | 36 |
| shall any cash surrender benefit be less than
the minimum |
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| nonforfeiture amount at that time. The death benefit under
such | 2 |
| contracts shall be at least equal to the cash surrender | 3 |
| benefit.
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| (5) For contracts which do not provide cash surrender | 5 |
| benefits, the
present value of any paid-up annuity benefit | 6 |
| available as a nonforfeiture
option at any time prior to | 7 |
| maturity shall not be less than the present
value of that | 8 |
| portion of the maturity value of the paid-up benefit provided
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| under the contract arising from considerations paid prior to | 10 |
| the time of
the contract is surrendered in exchange for, or | 11 |
| changed to, a deferred paid-up
annuity, such present value | 12 |
| being calculated for the period prior to the
maturity date on | 13 |
| the basis of the interest rate specified in the contract
for | 14 |
| accumulating the net considerations to determine such maturity | 15 |
| value,
and increased by any existing additional amounts | 16 |
| credited by the company
to the contract. For contracts which do | 17 |
| not provide any death benefits
prior to the commencement of any | 18 |
| annuity payments, such present values shall
be calculated on | 19 |
| the basis of such interest rate and the mortality table
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| specified in the contract for determining the maturity value of | 21 |
| the paid-up
annuity benefit. However, in no event shall the | 22 |
| present value of a paid-up
annuity benefit be less than the | 23 |
| minimum nonforfeiture amount at that time.
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| (6) For the purpose of determining the benefits calculated | 25 |
| under subsections
(4) and (5), in the case of annuity contracts | 26 |
| under which an election may
be made to have annuity payments | 27 |
| commence at optional maturity dates, the
maturity date shall be | 28 |
| deemed to be the latest date for which election shall
be | 29 |
| permitted by the contract, but shall not be deemed to be later | 30 |
| than the
anniversary of the contract next following the | 31 |
| annuitant's seventieth birthday
or the tenth anniversary of the | 32 |
| contract, whichever is later.
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| (7) Any contract which does not provide cash surrender | 34 |
| benefits or does
not provide death benefits at least equal to | 35 |
| the minimum nonforfeiture amount
prior to the commencement of | 36 |
| any annuity payments shall include a statement
in a prominent |
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| place in the contract that such benefits are not provided.
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| (8) Any paid-up annuity, cash surrender or death benefits | 3 |
| available
at any time, other than on the contract anniversary | 4 |
| under any contract with
fixed scheduled considerations, shall | 5 |
| be calculated with allowance for the
lapse of time and the | 6 |
| payment of any scheduled considerations beyond the
beginning of | 7 |
| the contract year in which cessation of payment of | 8 |
| considerations
under the contract occurs.
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| (9) For any contract which provides, within the same | 10 |
| contract by rider
or supplemental contract provision, both | 11 |
| annuity benefits and life insurance
benefits that are in excess | 12 |
| of the greater of cash surrender benefits or
a return of the | 13 |
| gross considerations with interest, the minimum nonforfeiture
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| benefits shall be equal to the sum of the minimum nonforfeiture | 15 |
| benefits
for the annuity portion and the minimum nonforfeiture | 16 |
| benefits, if any,
for the life insurance portion computed as if | 17 |
| each portion were a separate
contract. Notwithstanding the | 18 |
| provisions of subsections (3), (4), (5),
(6) and (8), | 19 |
| additional benefits payable (a) in the event of total and
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| permanent disability, (b) as reversionary annuity or deferred | 21 |
| reversionary
annuity
benefits, or (c) as other policy benefits | 22 |
| additional to life insurance,
endowment, and annuity benefits, | 23 |
| and considerations for all such additional
benefits, shall be | 24 |
| disregarded in ascertaining the minimum nonforfeiture
amounts, | 25 |
| paid-up annuity, cash surrender and death benefits that may be
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| required by this section. The inclusion of such additional | 27 |
| benefits shall
not be required in any paid-up benefits, unless | 28 |
| such additional benefits
separately would require minimum | 29 |
| nonforfeiture amounts, paid-up annuity,
cash surrender and | 30 |
| death benefits.
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| (10) After the effective date of this Section, any company | 32 |
| may file
with the Director a written notice of its election to | 33 |
| comply with the
provisions of this Section after a specified | 34 |
| date before the second anniversary
of the effective date of | 35 |
| this Section. After the filing of such notice, then
upon such | 36 |
| specified date, which shall be the operative date of this |
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| section
for such company, this Section shall become operative | 2 |
| with respect to annuity
contracts thereafter issued by such | 3 |
| company. If a company makes no such
election, the operative | 4 |
| date of this section for such company shall be the
second | 5 |
| anniversary of the effective date of this Section.
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| (11) This Section shall not apply to any reinsurance, group | 7 |
| annuity
purchased under a retirement plan or plan of deferred | 8 |
| compensation established
or maintained by an employer | 9 |
| (including a partnership or sole proprietorship)
or by an | 10 |
| employee organization, or by both, other than a plan providing
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| individual retirement accounts or individual retirement | 12 |
| annuities under
Section 408 of the Internal Revenue Code, as | 13 |
| now or hereafter amended, premium
deposit fund, variable | 14 |
| annuity, investment annuity, immediate annuity, any
deferred | 15 |
| annuity contract after annuity payments have commenced, or
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| reversionary
annuity, nor to any contract which shall be | 17 |
| delivered outside this State
through an agent or other | 18 |
| representative of the company issuing the contract.
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| (12) This Section is repealed on July 1, 2006.
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| (Source: P.A. 92-541, eff. 7-1-02.)
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| (215 ILCS 5/229.4a new)
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| Sec. 229.4a. Standard Non-forfeiture Law for Individual | 23 |
| Deferred
Annuities. | 24 |
| (1)
Title.
This Section shall be known as the Standard | 25 |
| Nonforfeiture Law for Individual Deferred Annuities. | 26 |
| (2) Applicability.
This Section shall not apply to any | 27 |
| reinsurance, group annuity purchased under a retirement plan or | 28 |
| plan of deferred compensation established or maintained by an | 29 |
| employer (including a partnership or sole proprietorship) or by | 30 |
| an employee organization, or by both, other than a plan | 31 |
| providing individual retirement accounts or individual | 32 |
| retirement annuities under Section 408 of the Internal Revenue | 33 |
| Code, as now or hereafter amended, premium deposit fund, | 34 |
| variable annuity, investment annuity, immediate annuity, any | 35 |
| deferred annuity contract after annuity payments have |
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| commenced, or reversionary annuity, nor to any contract which | 2 |
| shall be delivered outside this State through an agent or other | 3 |
| representative of the company issuing the contract. | 4 |
| (3) Nonforfeiture Requirements. | 5 |
| (A) In the case of contracts issued on or after the | 6 |
| operative date of this Section
as defined in subsection | 7 |
| (13), no contract of annuity, except as stated in | 8 |
| subsection (2), shall be delivered or issued for delivery | 9 |
| in this State unless it contains in substance the following | 10 |
| provisions, or corresponding provisions which in the | 11 |
| opinion of the Director of Insurance are at least as | 12 |
| favorable to the contract holder, upon cessation of payment | 13 |
| of considerations under the contract: | 14 |
| (i) That upon cessation of payment of | 15 |
| considerations under a contract, or upon the written | 16 |
| request of the contract owner, the company shall grant | 17 |
| a paid-up annuity benefit on a plan stipulated in the | 18 |
| contract of such value as is specified in subsections | 19 |
| (5), (6), (7), (8) and (10); | 20 |
| (ii)
If a contract provides for a lump sum | 21 |
| settlement at maturity, or at any other time, that upon | 22 |
| surrender of the contract at or prior to the | 23 |
| commencement of any annuity payments, the company | 24 |
| shall pay in lieu of a paid-up annuity benefit a cash | 25 |
| surrender benefit of such amount as is
specified in | 26 |
| subsections (5), (6), (8) and (10). The company may | 27 |
| reserve the right to
defer the payment of the cash | 28 |
| surrender benefit for a period not to exceed 6 months | 29 |
| after demand therefor with surrender of the contract | 30 |
| after making written request and receiving written | 31 |
| approval of the Director. The request shall address the | 32 |
| necessity and equitability to all policyholders of the | 33 |
| deferral; | 34 |
| (iii) A statement of the mortality table, if any, | 35 |
| and interest rates used calculating any minimum | 36 |
| paid-up annuity, cash surrender, or death benefits |
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| that are guaranteed under the contract, together with | 2 |
| sufficient information to determine the amounts of the | 3 |
| benefits; and | 4 |
| (iv)
A statement that any paid-up annuity, cash | 5 |
| surrender or death benefits that may be available under | 6 |
| the contract are not less than the minimum benefits | 7 |
| required by any statute of the state in which the | 8 |
| contract is delivered and an explanation of the manner | 9 |
| in which the benefits are altered by the existence of | 10 |
| any additional amounts credited by the company to the | 11 |
| contract, any indebtedness to the company on the | 12 |
| contract or any prior withdrawals from or partial | 13 |
| surrenders of the contract. | 14 |
| (B) Notwithstanding the requirements of this Section, | 15 |
| a deferred annuity contract may provide that if no | 16 |
| considerations have been received under a contract for a | 17 |
| period of 2 full years and the portion of the paid-up | 18 |
| annuity benefit at maturity on the plan stipulated in the | 19 |
| contract arising from prior considerations paid would be | 20 |
| less than $20 monthly, the company may at its option | 21 |
| terminate the contract by payment in cash of the then | 22 |
| present value of the portion of the paid-up annuity | 23 |
| benefit, calculated on the basis on the mortality table, if | 24 |
| any, and interest rate specified in the contract for | 25 |
| determining the paid-up annuity benefit, and by this | 26 |
| payment shall be relieved of any further obligation under | 27 |
| the contract. | 28 |
| (4) Minimum values. The minimum values as specified in | 29 |
| subsections (5), (6), (7), (8) and (10) of any paid-up annuity, | 30 |
| cash surrender or death benefits available under an annuity | 31 |
| contract shall be based upon minimum nonforfeiture amounts as | 32 |
| defined in this subsection.
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| (A)(i) The minimum nonforfeiture amount at any time at | 34 |
| or prior to the commencement of any annuity payments shall | 35 |
| be equal to an accumulation up to such time at rates of | 36 |
| interest as indicated in subdivision (4)(B) of the net |
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| considerations (as hereinafter defined) paid prior to such | 2 |
| time, decreased by the sum of paragraphs (a) through (d) | 3 |
| below: | 4 |
| (a) Any prior withdrawals from or partial | 5 |
| surrenders of the contract accumulated at rates of | 6 |
| interest as indicated in subdivision (4)(B);
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| (b) An annual contract charge of $50, | 8 |
| accumulated at rates of interest as indicated in | 9 |
| subdivision (4)(B);
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| (c) Any premium tax paid by the company for the | 11 |
| contract, accumulated at rates of interest as | 12 |
| indicated in subdivision (4)(B); and
| 13 |
| (d) The amount of any indebtedness to the | 14 |
| company on the contract, including
interest due and | 15 |
| accrued. | 16 |
| (ii) The net considerations for a given contract year | 17 |
| used to define the minimum nonforfeiture amount shall be an | 18 |
| amount
equal to 87.5% of the gross considerations,
credited | 19 |
| to the contract during that contract year. | 20 |
| (B) The interest rate used in determining minimum | 21 |
| nonforfeiture amounts shall be an
annual rate of interest | 22 |
| determined as the lesser of 3% per annum
and the following, | 23 |
| which shall be specified in the contract if the interest | 24 |
| rate will be reset: | 25 |
| (i) The five-year Constant Maturity Treasury Rate | 26 |
| reported by the Federal Reserve as of a date, or | 27 |
| average over a period, rounded to the nearest 1/20th of | 28 |
| one percent, specified in the contract no longer than | 29 |
| 15 months prior to the contract issue date or | 30 |
| redetermination date under subdivision (4)(B)(iv); | 31 |
| (ii) Reduced by 125 basis points; | 32 |
| (iii) Where the resulting interest rate is not less | 33 |
| than l%; and | 34 |
| (iv) The interest rate shall apply for an initial | 35 |
| period and may be redetermined for additional periods. | 36 |
| The redetermination date, basis and period, if any, |
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| shall be stated in the contract. The basis is the date | 2 |
| or average over a specified period that produces the | 3 |
| value of the 5-year Constant Maturity Treasury Rate to | 4 |
| be used at each redetermination date. | 5 |
| (C) During the period or term that a contract provides | 6 |
| substantive participation in an equity indexed benefit, it | 7 |
| may increase the reduction described in subdivision | 8 |
| (4)(B)(ii)
above by up to an additional 100 basis points to | 9 |
| reflect the value of the equity
index benefit. The present | 10 |
| value at the contract issue date, and at each
| 11 |
| redetermination date thereafter, of the additional | 12 |
| reduction shall not exceed market value of the benefit. The | 13 |
| Director may require a demonstration that the present value | 14 |
| of the additional reduction does not exceed the market | 15 |
| value of the benefit. Lacking such a demonstration that is | 16 |
| acceptable to the Director, the Director may disallow or | 17 |
| limit the additional reduction. | 18 |
| (D) The Director may adopt rules to implement the | 19 |
| provisions of subdivision (4)(C) and to provide for further | 20 |
| adjustments to the calculation of minimum nonforfeiture | 21 |
| amounts for contracts that provide substantive | 22 |
| participation in an equity index benefit and for other | 23 |
| contracts that the Director determines adjustments are | 24 |
| justified. | 25 |
| (5) Computation of Present Value.
Any paid-up annuity | 26 |
| benefit available under a contract shall be such that its | 27 |
| present value on the date annuity payments are to commence is | 28 |
| at least equal to the minimum nonforfeiture amount on that | 29 |
| date. Present value shall be computed using the mortality | 30 |
| table, if any, and the interest rates specified in the contract | 31 |
| for determining the minimum paid-up annuity benefits | 32 |
| guaranteed in the contract. | 33 |
| (6) Calculation of Cash Surrender Value.
For contracts that | 34 |
| provide cash surrender benefits, the cash surrender benefits | 35 |
| available prior to maturity shall not be less than the present | 36 |
| value as of the date of surrender of that portion of the |
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| maturity value of the paid-up annuity benefit that would be | 2 |
| provided under the contract at maturity arising from | 3 |
| considerations paid prior to the time of cash surrender reduced | 4 |
| by the amount appropriate to reflect any prior withdrawals from | 5 |
| or partial surrenders of the contract, such present value being | 6 |
| calculated on the basis of an interest rate not more than 1% | 7 |
| higher than the interest rate specified in the contract for | 8 |
| accumulating the net considerations to determine maturity | 9 |
| value, decreased by the amount of any indebtedness to the | 10 |
| company on the contract, including interest due and accrued, | 11 |
| and increased by any existing additional amounts credited by | 12 |
| the company to the contract. In no event shall any cash | 13 |
| surrender benefit be less than the minimum nonforfeiture amount | 14 |
| at that time. The death benefit under such contracts shall be | 15 |
| at least equal to the cash surrender benefit. | 16 |
| (7) Calculation of Paid-up Annuity Benefits.
For contracts | 17 |
| that do not provide cash surrender benefits, the present value | 18 |
| of any paid-up annuity benefit available as a nonforfeiture | 19 |
| option at any time prior to maturity shall not be less than the | 20 |
| present value of that portion of the maturity value of the | 21 |
| paid-up annuity benefit provided under the contract arising | 22 |
| from considerations paid prior to the time the contract is
| 23 |
| surrendered in exchange for, or changed to, a deferred paid-up | 24 |
| annuity, such present value being calculated for the period | 25 |
| prior to the maturity date on the basis of the interest rate | 26 |
| specified in the contract for accumulating the net | 27 |
| considerations to determine maturity value, and increased by | 28 |
| any additional amounts credited by the company to the contract. | 29 |
| For contracts that do not provide any death benefits prior to | 30 |
| the commencement of any annuity payments, present values shall | 31 |
| be calculated on the basis of such interest rate and the | 32 |
| mortality table specified in the contract for determining the | 33 |
| maturity value of the paid-up annuity benefit. However, in no | 34 |
| event shall the present value of a paid-up annuity benefit be | 35 |
| less than the minimum nonforfeiture amount at that time. | 36 |
| (8) Maturity Date.
For the purpose of determining the |
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HB5075 Enrolled |
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LRB093 20967 SAS 46953 b |
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| benefits calculated under subsections (6) and (7), in the case | 2 |
| of annuity contracts under which an election may be made to | 3 |
| have annuity payments commence at optional maturity dates, the | 4 |
| maturity date shall be deemed to be the latest date for which | 5 |
| election shall be permitted by the contract, but shall not be | 6 |
| deemed to be later than the anniversary of the contract next | 7 |
| following the annuitant's seventieth birthday or the tenth | 8 |
| anniversary of the contract, whichever is later. | 9 |
| (9) Disclosure of Limited Death Benefits.
A contract that | 10 |
| does not provide cash surrender benefits or does not provide | 11 |
| death benefits at least equal to the minimum nonforfeiture | 12 |
| amount prior to the commencement of any annuity payments shall | 13 |
| include a statement in a prominent place in the contract that | 14 |
| such benefits are not
provided. | 15 |
| (10) Inclusion of Lapse of Time Considerations.
Any paid-up | 16 |
| annuity, cash surrender or death benefits available at any | 17 |
| time, other than on the contract anniversary under any contract | 18 |
| with fixed scheduled considerations, shall be calculated with | 19 |
| allowance for the lapse of time and the payment of any | 20 |
| scheduled considerations beyond the beginning of the contract | 21 |
| year in which cessation of payment of considerations under the | 22 |
| contract occurs. | 23 |
| (11) Proration of Values; Additional Benefits.
For a | 24 |
| contract which provides, within the same contract by rider or | 25 |
| supplemental contract provision, both annuity benefits and | 26 |
| life insurance benefits that are in excess of the greater of | 27 |
| cash surrender benefits or a return of the gross considerations | 28 |
| with interest, the minimum nonforfeiture benefits shall be | 29 |
| equal to the sum of the minimum nonforfeiture benefits for the | 30 |
| annuity portion and the minimum nonforfeiture benefits, if any, | 31 |
| for the life insurance portion computed as if each portion were | 32 |
| a separate contract. Notwithstanding the provisions of | 33 |
| subsections (5), (6), (7), (8) and (10), additional benefits | 34 |
| payable in the event of total and permanent disability, as | 35 |
| reversionary annuity or deferred reversionary annuity | 36 |
| benefits, or as other policy benefits additional to life |
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HB5075 Enrolled |
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LRB093 20967 SAS 46953 b |
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| insurance, endowment and annuity benefits, and considerations | 2 |
| for all such additional benefits, shall be disregarded in | 3 |
| ascertaining the minimum nonforfeiture amounts,
paid-up | 4 |
| annuity, cash surrender and death benefits that may be required | 5 |
| under this Section. The inclusion of such benefits shall not be | 6 |
| required in any paid-up benefits, unless the additional | 7 |
| benefits separately would require minimum nonforfeiture | 8 |
| amounts, paid-up annuity, cash surrender and death benefits. | 9 |
| (12) Rules. The Director may adopt rules to implement the | 10 |
| provisions of this Section. | 11 |
| (13) Effective Date. After the effective date of this | 12 |
| amendatory Act of the 93rd General Assembly, a company may | 13 |
| elect to apply its provisions to annuity
contracts on a | 14 |
| contract form-by-contract form basis before July 1, 2006. In | 15 |
| all other instances, this Section shall become operative with | 16 |
| respect to annuity contracts issued by the company on or after | 17 |
| July 1, 2006.
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| (14) This Section is repealed on July 1, 2007.
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| Section 99. Effective date. This Act takes effect on July | 20 |
| 1, 2004.
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