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.(3) If the filing contains an insert page, an explanation of when the insert page will be used shouldbe included in the filing.(4) If the specifications 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) Include a certification signed by a company officer that the contract has a minimum Flesch Scoreof 50.(7) 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)(de)(ef)A description of the contract and contract provisions that affect nonforfeiture values;All maximum benefit, surrender and expense charges;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 rate.“Basis” in this context means the specified period over which an average is computedthat produces the value of the 5 Year Constant Maturity Treasury (CMT) Rate and alsothe period for which the initial nonforfeiture rate so determined will apply. (If there is noredetermination of the nonforfeiture rate under the contract, the period the initialnonforfeiture rate will apply may be the entire duration of the contract). As defined inthese standards, pursuant to the NAIC Annuity Nonforfeiture Model Regulation, model#806, “nonforfeiture rate” is the interest rate used in determining the minimumnonforfeiture amount. This will be determined at issue (initial nonforfeiture rate) and, ifapplicable, for each subsequent redetermination period (redetermination nonforfeiturerate).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 values under the contract.© IIPRC 2
Date: 02/08/08Revisions proposed by the Product Standards Committee with respect to Alaska comment dated 1/23/08.(fg)(gh)(hi)(ij)A nonforfeiture demonstration that the values of the contract comply with the NAICStandard Nonforfeiture Law for Individual Deferred Annuities, model #805. The freepartial withdrawal provision of the contract may be used in the demonstration ofcompliance, if applicable. The nonforfeiture calculations shall be presented in the formatprescribed in Appendix A of these standards;. For the purpose of the nonforfeituredemonstration, notwithstanding the language of the contract, the maturity date shall bethe later of the tenth contract anniversary or the contract anniversary following theannuitant’s 70 th birthday. Maturity value used to demonstrate compliance with theprospective test shall be the contract account value. No surrender charge is permitted onor past the maturity date.Sample calculations of any nonforfeiture values for representative issue ages includingissue age 60 if within the issue age range. The calculations shall properly reflectwithdrawal amounts made during the surrender charge period that are not subject to anysurrender charge;Certification as to the compliance with the NAIC Standard Nonforfeiture Law forIndividual Deferred Annuities, model #805; andCertification that the procedures used in the determination and, if applicable,redetermination of the contract nonforfeiture rate or rates applicable to any values underthe contract are in compliance with the NAIC Annuity Nonforfeiture Model Regulation,model # 806 as modified by Paragraph (7)(g) of the ADDITIONAL SUBMISSIONREQUIREMENTS of these standards.(8) Certification by a company officer that written request will be made to and written approvalreceived from the chief insurance regulator of the state of domicile of the company prior to thecompany exercising any contractual right to defer the payment of any cash value, withdrawal, orloan value for a period of not more than six months.(9) If the contract is for use with more than one plan, the submission shall include a separate set ofuniquely numbered specifications pages for each plan being submitted for approval, along with aseparate actuarial memorandum for each plan. The company may not use the same contract formto provide alternate plans by making any features and benefits described in the contract asinapplicable by a zero entry or by indicating that the benefit is not applicable on thespecifications page or in the contract. For example, the use of one contract with and withoutsurrender charges is unacceptable.(10) A description of any innovative or unique features of each contract form.VARIABILITY OF INFORMATION(1) The company may identify items that will be considered variable only in the specification page.The items shall be bracketed or otherwise marked to denote variability. The submission shallinclude a Statement of Variability that will discuss the conditions under which each variable itemmay change.© IIPRC 3
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Individual Deferred Non-Variable Annuity Contract Standard

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