Individual Fixed Premium Deferred Variable Annuity Contract ...

More documents

Recommendations

Info

Date: 9/28/07As adopted by the IIPRCINDIVIDUAL FIXED PREMIUM DEFERRED VARIABLEANNUITY CONTRACT STANDARDS(WITH SEPARATE AND GENERAL ACCOUNTS)Scope: These standards apply to an individual deferred variable annuity contract that provides for fixedpremium payments as specified and provides for funds to be held in separate and general accounts. Thestandards do not apply to an individual deferred variable annuity contract that provides for indexing,bonuses, guaranteed death benefits, guaranteed living benefits or other guarantees for the separateaccount funds.Although references to “age” or “annuitant” are being made in these standards, it does not preclude thecontract from having more than one annuitant.As used in these standards the following definitions apply:“Account value” is the total amount of premium paid, reduced by specified charges and expenses, at noless than the guaranteed minimum interest rate.“Cash surrender value” is the cash value reduced by indebtedness.“Cash value” is the account value less any surrender charges.Drafting Notes:Other terms may be used in the contract provided they are consistent.Although references to “age” or “annuitant” are being made in these standards, such references do notpreclude the contract from having more than one annuitant.The references to “contract” do not preclude Fraternal Benefit Societies from substituting “certificate” intheir forms.§1. ADDITIONAL SUBMISSION REQUIREMENTSThe following additional filing submission requirements shall apply:(1) All forms filed for approval shall be included with the filing. Changes to a previously approvedform shall be highlighted. The specifications page of a contract shall be completed withhypothetical data that is realistic and consistent with the other contents of the contract and anyrequired actuarial memorandum in support of nonforfeiture values.(2) If a filing is being submitted on behalf of a company, a letter or other document authorizing thefirm to file on behalf of the company shall be included with the filing.(3) If the filing contains an insert page, an explanation of when the insert page will be used shouldbe included in the filing.© IIPRC 2
Date: 9/28/07As adopted by the IIPRC(4) If the specification page of the contract contains variable items, the submission shall include theStatement of Variability. The submission shall also include a certification that any change ormodification to a variable item shall be administered in accordance with the requirements in theVariability of Information section, including any requirements for prior approval of a change ormodification.(5) If the contract provides for a benefit waiving surrender charges contingent on a declared interestrate, the company shall provide a certification that the owner will be provided a timelynotification when the declared interest rate declines to a point at which the waiver of surrendercharge benefit is available.(6) An actuarial memorandum shall be prepared, dated and signed by the member of the AmericanAcademy of Actuaries who provides the following information concerning the calculation of thenonforfeiture values:(a)(b)(c)(d)(e)(f)(g)A description of the contract and contract provisions that affect nonforfeiture values;All maximum benefit, surrender and expense charges (e.g. mortality and expense riskcharge);The range of issue ages;The maximum maturity date. For contracts where the maturity date may not be changedat the option of the owner, this date is the fixed maturity date;A description of the basis used in the establishment of the initial nonforfeiture rateapplicable to any general account values under the contract. “Basis” in this context meansthe specified period over which an average is computed that produces the value of the 5Year Constant Maturity Treasury (CMT) Rate and also the period for which the initialnonforfeiture rate so determined will apply. (If there is no redetermination of thenonforfeiture rate under the contract, the period the initial nonforfeiture rate will applymay be the entire duration of the contract). As defined in these standards, pursuant to theNAIC Annuity Nonforfeiture Model Regulation, model #806, “nonforfeiture rate” is theinterest rate used in determining the minimum nonforfeiture amount. This will bedetermined at issue (initial nonforfeiture rate) and, if applicable, each subsequentredetermination period (redetermination nonforfeiture rate).A description of the redetermination method, if any, under the contract, including theredetermination date, basis, and period of applicability for all future redeterminationnonforfeiture rates applicable to any general account values under the contract.A nonforfeiture demonstration that the values of the contract comply with Section 7 ofthe NAIC Model Variable Annuity Regulation, model #250. The free partial withdrawalprovision of the Contract may be used in the demonstration of compliance, if necessary.Any general account nonforfeiture calculations shall be presented in the formatprescribed in Appendix A of these standards;© IIPRC 3
Page 1: Individual Fixed Premium Deferred V
Page 6 and 7: Date: 9/28/07As adopted by the IIPR
Page 24: Date: 9/28/07As adopted by the IIPR

Individual Fixed Premium Deferred Variable Annuity Contract ...

Create successful ePaper yourself

Delete template?

Save as template?