Individual Deferred Non-Variable Annuity Contract Standard

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Date: 02/08/08Revisions proposed by the Product Standards Committee with respect to Alaska comment dated 1/23/08.MINIMUM PREMIUM/MAXIMUM PREMIUM(1) The contract shall state the dollar amount of any minimum or maximum contract premiumrequirements.MISSTATEMENT OF AGE OR SEX(1) The contract shall contain a misstatement of age provision or, if the contract is written on a sexdistinct basis a misstatement of age or sex provision, providing that the amount payable shall besuch as the premium payments to the company would have purchased at the correct age or thecorrect age and sex.(2) Any overpayments/underpayments by the company on account of misstatement of age or sexshall, with interest at a rate specified in the contract but not exceeding 6%, be charged/creditedagainst the current or next succeeding payments to be made by the company.(3) If there is more than one annuitant, the misstatement provision may provide that the amountpayable may be adjusted due to the misstatement in the age or the age or sex, as appropriate, ofany annuitant.NONFORFEITURE VALUES(1) The contract shall contain provisions at least as favorable to the owner as the following:(a)(b)(c)(d)(e)A provision that upon cessation of payment of premiums under the contract, thecompany will grant a paid-up annuity benefit as specified in the contract. For singlepremium or modified single premium contracts, the company will grant a paid-up annuitybenefit as specified in the contract.If the contract provides for a lump sum settlement at maturity or at any other time, aprovision that upon surrender of the contract at or prior to the commencement of anyannuity payments, the company will pay in lieu of a paid-up annuity benefit a cashsurrender benefit.A statement of the mortality table, if any, and interest rates used in calculating anyminimum paid-up annuity, cash surrender or death benefits that are guaranteed under thecontract, together with sufficient information to determine the amounts of such benefits.The sufficient information includes all expense, partial withdrawal and surrender charges.A statement that any paid-up annuity, cash surrender or death benefits that may beavailable under the contract are not less than the minimum benefits required by the NAICStandard Nonforfeiture Law for Individual Deferred Annuities, model #805.An explanation of the manner in which the paid-up annuity, cash surrender or deathbenefits are altered by the existence of any additional amounts credited by the companyto the contract, any indebtedness to the company on the contract or any prior withdrawalsfrom or partial surrenders of the contract.© IIPRC 12
Date: 02/08/08Revisions proposed by the Product Standards Committee with respect to Alaska comment dated 1/23/08.(2) A contract may provide the following:(a)(b)If no premiums have been received under a contract for a period of two full years and theportion of the paid-up annuity benefit at maturity on the plan stipulated in the contractarising from premiums paid prior to such period would be less than $20 monthly, thecompany may, at its option, terminate the contract by payment in cash of the presentvalue of such portion of the paid-up annuity benefit, calculated on the basis of themortality table, if any, and interest rate specified in the contract for determining the paidupannuity benefit, and by that payment shall be relieved of any further obligation undersuch contract.For single and modified single premium contracts, if the paid-up annuity benefit atmaturity on the plan stipulated in the contract arising from premiums paid prior to suchperiod would be less than $20 monthly, the company may, at its option, terminate thecontract by payment in cash of the present value of such portion of the paid-up annuitybenefit, calculated on the basis of the mortality table, if any, and interest rate specified inthe contract for determining the paid-up annuity benefit, and by that payment shall berelieved of any further obligation under such contract.(3) If the contract provides for the redetermination of the nonforfeiture rate applicable under thecontract, the contract shall include a description of the redetermination method to be used,including the redetermination date, basis, and period of applicability for all futureredetermination nonforfeiture rates.(4) If the contract utilizes the minimum nonforfeiture values under the NAIC Standard NonforfeitureLaw for Individual Deferred Annuities, model #805, in the determination of the minimumcontract values applicable under the contract, the minimum nonforfeiture value parameters(expense loads and initial nonforfeiture rate) shall be disclosed on the specifications page.OWNERSHIP(1) The contract shall contain an ownership provision. The provision shall describe the proceduresfor designating or changing the owner and indicating when the designation is effective. Thecontract shall not include any restriction on change of owner other than for purposes of satisfyingapplicable laws or regulations.(2) The contract shall state that changes in owner designation, unless otherwise specified by theowner, shall take effect on the date the notice of change is signed by the owner, subject to anypayments made or actions taken by the company prior to receipt of this notice.(3) The contract shall state what happens on the death of the owner.Drafting Note: Restrictions on change of owner in contracts such as right of first refusal or first offerprovisions are prohibited by Item (1).PARTIAL WITHDRAWAL(1) A contract that develops cash values may provide for a partial withdrawal provision.© IIPRC 13
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Individual Deferred Non-Variable Annuity Contract Standard

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