Article 4.--GENERAL PROVISIONS RELATING TO LIFE INSURANCE COMPANIES
40-4,104.Same; minimum values; rules andregulations.The minimum values as specified inK.S.A. 2009 Supp.40-4,105, 40-4,106,40-4,107, 40-4,108 and 40-4,110, and amendmentsthereto, of any paid-up annuity, cash surrender or death benefits availableunder an annuitycontract shall be based upon minimum nonforfeiture amounts as defined in thissection andamendments thereto.
(a) (1) The minimum nonforfeiture amount at any time at or prior to thecommencement of anyannuity payments shall be equal to an accumulation up to such time at rates ofinterest asindicated in subsection (b) of the net considerations, as hereinafter defined,paid prior to suchtime, decreased by the sum of subparagraphs (A) through (D) below:
(A) Any prior withdrawals from or partial surrenders of the contractaccumulated at ratesof interest as indicated in subsection (b).
(B) An annual contract charge of $50, accumulated at rates of interest asindicated insubsection (b).
(C) Any premium tax paid by the company for the contract, accumulated atrates ofinterest as indicated in subsection (b).
(D) The amount of any indebtedness to the company on the contract, includinginterestdue and accrued.
(2) The net considerations for a given contract year used to define theminimumnonforfeiture amount shall be an amount equal to 87.5% of the grossconsiderations credited tothe annuity contract during that contract year.
(b) The interest rate used in determining minimum nonforfeiture amounts shall be anannual rate of interest determined as the lesser of three percent per annum and the following,which shall be specified in the annuity contract if the interest rate will be reset:
(1) The five-year constant maturity treasury rate reported by the federalreserve as of a date, or average over a period, rounded to the nearest1/20th of one percent, specified in the contract no longerthan 15 months prior to the annuity contract's issue date or redeterminationdate of paragraph (4) of subsection (b) of this section and amendments thereto;
(2) reduced by 125 basis points;
(3) where the resulting interest rate is not less than one percent; and
(4) the interest rate shall apply for an initial period and may beredetermined foradditional periods. The redetermination date, basis and period, if any, shallbe stated in theannuity contract. The basis is the date or average over a specified period thatproduces the valueof the five-year constant maturity treasury rate to be used at eachredetermination date.
(c) During the period or term that an annuity contract provides substantiveparticipation inan equity indexed benefit, such annuity contract may increase the reductiondescribed inparagraph (2) of subsection (b) above by up to an additional 100 basis pointsto reflect the valueof the equity index benefit. The present value at the issue date of suchannuity contract, and ateach redetermination date thereafter, of the additional reduction shall notexceed the marketvalue of the benefit. The commissioner may require a demonstration that thepresent value of theadditional reduction does not exceed the market value of the benefit. Lackingsuch ademonstration that is acceptable to the commissioner, the commissioner maydisallow or limitthe additional reduction.
(d) The commissioner may adopt rules and regulations to implement theprovisions ofsubsection (c) of this section, and amendments thereto, and to provide forfurtheradjustments to the calculation of minimum nonforfeiture amounts for annuitycontracts that provide substantiveparticipation in an equity index benefit and for such other annuity contractsthat thecommissioner determines adjustments are justified.
Article 4.--GENERAL PROVISIONS RELATING TO LIFE INSURANCE COMPANIES
40-4,104.Same; minimum values; rules andregulations.The minimum values as specified inK.S.A. 2009 Supp.40-4,105, 40-4,106,40-4,107, 40-4,108 and 40-4,110, and amendmentsthereto, of any paid-up annuity, cash surrender or death benefits availableunder an annuitycontract shall be based upon minimum nonforfeiture amounts as defined in thissection andamendments thereto.
(a) (1) The minimum nonforfeiture amount at any time at or prior to thecommencement of anyannuity payments shall be equal to an accumulation up to such time at rates ofinterest asindicated in subsection (b) of the net considerations, as hereinafter defined,paid prior to suchtime, decreased by the sum of subparagraphs (A) through (D) below:
(A) Any prior withdrawals from or partial surrenders of the contractaccumulated at ratesof interest as indicated in subsection (b).
(B) An annual contract charge of $50, accumulated at rates of interest asindicated insubsection (b).
(C) Any premium tax paid by the company for the contract, accumulated atrates ofinterest as indicated in subsection (b).
(D) The amount of any indebtedness to the company on the contract, includinginterestdue and accrued.
(2) The net considerations for a given contract year used to define theminimumnonforfeiture amount shall be an amount equal to 87.5% of the grossconsiderations credited tothe annuity contract during that contract year.
(b) The interest rate used in determining minimum nonforfeiture amounts shall be anannual rate of interest determined as the lesser of three percent per annum and the following,which shall be specified in the annuity contract if the interest rate will be reset:
(1) The five-year constant maturity treasury rate reported by the federalreserve as of a date, or average over a period, rounded to the nearest1/20th of one percent, specified in the contract no longerthan 15 months prior to the annuity contract's issue date or redeterminationdate of paragraph (4) of subsection (b) of this section and amendments thereto;
(2) reduced by 125 basis points;
(3) where the resulting interest rate is not less than one percent; and
(4) the interest rate shall apply for an initial period and may beredetermined foradditional periods. The redetermination date, basis and period, if any, shallbe stated in theannuity contract. The basis is the date or average over a specified period thatproduces the valueof the five-year constant maturity treasury rate to be used at eachredetermination date.
(c) During the period or term that an annuity contract provides substantiveparticipation inan equity indexed benefit, such annuity contract may increase the reductiondescribed inparagraph (2) of subsection (b) above by up to an additional 100 basis pointsto reflect the valueof the equity index benefit. The present value at the issue date of suchannuity contract, and ateach redetermination date thereafter, of the additional reduction shall notexceed the marketvalue of the benefit. The commissioner may require a demonstration that thepresent value of theadditional reduction does not exceed the market value of the benefit. Lackingsuch ademonstration that is acceptable to the commissioner, the commissioner maydisallow or limitthe additional reduction.
(d) The commissioner may adopt rules and regulations to implement theprovisions ofsubsection (c) of this section, and amendments thereto, and to provide forfurtheradjustments to the calculation of minimum nonforfeiture amounts for annuitycontracts that provide substantiveparticipation in an equity index benefit and for such other annuity contractsthat thecommissioner determines adjustments are justified.
Article 4.--GENERAL PROVISIONS RELATING TO LIFE INSURANCE COMPANIES
40-4,104.Same; minimum values; rules andregulations.The minimum values as specified inK.S.A. 2009 Supp.40-4,105, 40-4,106,40-4,107, 40-4,108 and 40-4,110, and amendmentsthereto, of any paid-up annuity, cash surrender or death benefits availableunder an annuitycontract shall be based upon minimum nonforfeiture amounts as defined in thissection andamendments thereto.
(a) (1) The minimum nonforfeiture amount at any time at or prior to thecommencement of anyannuity payments shall be equal to an accumulation up to such time at rates ofinterest asindicated in subsection (b) of the net considerations, as hereinafter defined,paid prior to suchtime, decreased by the sum of subparagraphs (A) through (D) below:
(A) Any prior withdrawals from or partial surrenders of the contractaccumulated at ratesof interest as indicated in subsection (b).
(B) An annual contract charge of $50, accumulated at rates of interest asindicated insubsection (b).
(C) Any premium tax paid by the company for the contract, accumulated atrates ofinterest as indicated in subsection (b).
(D) The amount of any indebtedness to the company on the contract, includinginterestdue and accrued.
(2) The net considerations for a given contract year used to define theminimumnonforfeiture amount shall be an amount equal to 87.5% of the grossconsiderations credited tothe annuity contract during that contract year.
(b) The interest rate used in determining minimum nonforfeiture amounts shall be anannual rate of interest determined as the lesser of three percent per annum and the following,which shall be specified in the annuity contract if the interest rate will be reset:
(1) The five-year constant maturity treasury rate reported by the federalreserve as of a date, or average over a period, rounded to the nearest1/20th of one percent, specified in the contract no longerthan 15 months prior to the annuity contract's issue date or redeterminationdate of paragraph (4) of subsection (b) of this section and amendments thereto;
(2) reduced by 125 basis points;
(3) where the resulting interest rate is not less than one percent; and
(4) the interest rate shall apply for an initial period and may beredetermined foradditional periods. The redetermination date, basis and period, if any, shallbe stated in theannuity contract. The basis is the date or average over a specified period thatproduces the valueof the five-year constant maturity treasury rate to be used at eachredetermination date.
(c) During the period or term that an annuity contract provides substantiveparticipation inan equity indexed benefit, such annuity contract may increase the reductiondescribed inparagraph (2) of subsection (b) above by up to an additional 100 basis pointsto reflect the valueof the equity index benefit. The present value at the issue date of suchannuity contract, and ateach redetermination date thereafter, of the additional reduction shall notexceed the marketvalue of the benefit. The commissioner may require a demonstration that thepresent value of theadditional reduction does not exceed the market value of the benefit. Lackingsuch ademonstration that is acceptable to the commissioner, the commissioner maydisallow or limitthe additional reduction.
(d) The commissioner may adopt rules and regulations to implement theprovisions ofsubsection (c) of this section, and amendments thereto, and to provide forfurtheradjustments to the calculation of minimum nonforfeiture amounts for annuitycontracts that provide substantiveparticipation in an equity index benefit and for such other annuity contractsthat thecommissioner determines adjustments are justified.
