A. The minimum values specified in §§ 38.2-3222 through 38.2-3225 and38.2-3227 of any paid-up annuity, cash surrender or death benefits availableunder an annuity contract shall be based upon the minimum nonforfeitureamounts defined in this section and applied as follows:
1. For contracts issued before April 1, 2003, the amounts shall be determinedin accordance with subsections B, C, and D.
2. For contracts issued on or after April 1, 2003, and before July 1, 2004,the amounts shall be determined in accordance with the applicable provisionsof subsections B, C, D, and E of this section.
3. For contracts issued on or after July 1, 2004, and before July 1, 2005,the amounts shall be determined in accordance with the applicable provisionsof subsections B, C, D, and E of this section unless the insurer makes theelection authorized by subsection F of this section in which case the amountsshall be determined in accordance with subdivisions F 1 through F 4.
4. For contracts issued on or after July 1, 2005, the amounts shall bedetermined in accordance with subdivisions F 1 through F 4.
B. 1. For contracts providing for flexible considerations, the minimumnonforfeiture amount at or any time before the beginning of any annuitypayments shall equal any accumulation up to that time at an annual rate ofinterest of three percent of percentages of the net considerations as definedin this subsection, paid prior to that time, increased by an existingadditional amount credited by the insurer to the contract and decreased bythe sum of:
a. Any prior withdrawals from or partial surrenders of the contractaccumulated at a rate of interest of three percent per year; and
b. The amount of any indebtedness to the insurer on the contract, includinginterest due and accrued.
2. The net considerations for a given contract year used to define theminimum nonforfeiture amount shall be not less than zero and shall equal thecorresponding gross considerations credited to the contract during thatcontract year less an annual contract charge of $30 and less a collectioncharge of $1.25 per consideration credited to the contract during thatcontract year. The percentages of net considerations shall be 65 percent ofthe net consideration for the first contract year and 87 1/2 percent of thenet considerations for the second and later contract years. Notwithstandingthe provisions of the preceding sentence, the percentage shall be 65 percentof the portion of the total net consideration for any renewal contract yearthat exceeds by not more than two times the sum of those portions of the netconsiderations in all prior contract years for which the percentage was 65percent.
C. For contracts providing for fixed scheduled considerations, minimumnonforfeiture amounts shall be calculated on the assumption thatconsiderations are paid annually in advance and shall be the same as forcontracts with flexible considerations that are paid annually with twoexceptions:
1. The portion of the net consideration for the first contract year to beaccumulated shall be the sum of 65 percent of the net consideration for thefirst contract year plus 22 1/2 percent of the excess of the netconsideration for the first contract year over the lesser of the netconsiderations for the second and third contract years.
2. The annual contract charge shall be the lesser of (i) $30 or (ii) 10percent of the gross annual consideration.
D. For contracts providing for a single consideration, minimum nonforfeitureamounts shall be the same as for contracts with flexible considerationsexcept that the percentage of net consideration used to determine the minimumnonforfeiture amount shall equal 90 percent, and the net consideration shallbe the gross consideration less a contract charge of $75.
E. Notwithstanding any other provision of this section, for any contractissued on or after April 1, 2003, and before July 1, 2005, the interest rateat which net considerations, partial withdrawals, and partial surrenders maybe accumulated, for the purposes of determining minimum nonforfeitureamounts, may be one and one-half percent per year.
F. The following provisions shall apply for contracts issued on or after July1, 2005, and at the election of the insurer may apply also to specifiedcontracts issued on or after July 1, 2004. An insurer may make this electionon a contract-form-by-contract-form basis by filing written notice with theCommission and specifying a date for the provisions to apply prior to July 1,2005.
1. The minimum nonforfeiture amount at or any time before the beginning ofany annuity payments shall equal an accumulation up to that time at rates ofinterest, as indicated in subdivision 3 of this subsection, of the netconsiderations as defined in this subsection, paid prior to that time, anddecreased by the sum of:
a. Any prior withdrawals from or partial surrenders of the contractaccumulated at rates of interest as indicated in subdivision 3 of thissubsection;
b. An annual contract charge of $50, accumulated at rates of interest asindicated in subdivision 3 of this subsection;
c. Any premium tax paid by the insurer for the contract, accumulated at ratesof interest as indicated in subdivision 3 of this subsection, adjusted forany tax that is not actually paid or which has been credited back to theinsurer, such as upon early termination of the contract; and
d. The amount of any indebtedness to the insurer on the contract, includinginterest due and accrued.
2. The net considerations for a given contract year used to define theminimum nonforfeiture amount shall be equal to 87.5 percent of the grossconsiderations credited to the contract during that contract year.
3. The interest rate used in determining minimum nonforfeiture amounts shallbe an annual rate of interest determined as the lesser of three percent perannum and the following, which shall be specified in the contract if theinterest rate will be reset:
a. The five-year Constant Maturity Treasury Rate reported by the FederalReserve as of a date, or average over a period, rounded to the nearestone-twentieth of one percent, specified in the contract no longer than 15months prior to the contract issue date or redetermination date under thissubdivision;
b. Reduced by 125 basis points;
c. Where the resulting interest rate is not less than one percent; and
d. The interest rate shall apply for an initial period and may beredetermined for additional periods. The redetermination date, basis andperiod, if any, shall be stated in the contract. The basis is the date oraverage over a specified period that produces the value of the five-yearConstant Maturity Treasury Rate to be used at each redetermination date.
4. During the period or term that a contract provides substantiveparticipation in an equity indexed benefit, it may increase the reductiondescribed in subdivision 3 b of this subsection by up to an additional 100basis points to reflect the value of the equity index benefit. The presentvalue at the contract issue date, and at each redetermination datethereafter, of the additional reduction shall not exceed the market value ofthe benefit. The Commission may require a demonstration that the presentvalue of the additional reduction does not exceed the market value of thebenefit. Where administration is lacking or unacceptable, the Commission may,at its discretion, disallow or limit the additional reduction.
G. The Commission may adopt rules and regulations to implement the provisionsof subdivision F 4 of this section and to provide for further adjustments tothe calculation of minimum nonforfeiture amounts for contracts that providesubstantive participation in an equity index benefit and for other contractsfor which the Commission determines adjustments are justified.
(1979, c. 437, § 38.1-470.1; 1986, c. 562; 2003, c. 440; 2004, c. 313.)
A. The minimum values specified in §§ 38.2-3222 through 38.2-3225 and38.2-3227 of any paid-up annuity, cash surrender or death benefits availableunder an annuity contract shall be based upon the minimum nonforfeitureamounts defined in this section and applied as follows:
1. For contracts issued before April 1, 2003, the amounts shall be determinedin accordance with subsections B, C, and D.
2. For contracts issued on or after April 1, 2003, and before July 1, 2004,the amounts shall be determined in accordance with the applicable provisionsof subsections B, C, D, and E of this section.
3. For contracts issued on or after July 1, 2004, and before July 1, 2005,the amounts shall be determined in accordance with the applicable provisionsof subsections B, C, D, and E of this section unless the insurer makes theelection authorized by subsection F of this section in which case the amountsshall be determined in accordance with subdivisions F 1 through F 4.
4. For contracts issued on or after July 1, 2005, the amounts shall bedetermined in accordance with subdivisions F 1 through F 4.
B. 1. For contracts providing for flexible considerations, the minimumnonforfeiture amount at or any time before the beginning of any annuitypayments shall equal any accumulation up to that time at an annual rate ofinterest of three percent of percentages of the net considerations as definedin this subsection, paid prior to that time, increased by an existingadditional amount credited by the insurer to the contract and decreased bythe sum of:
a. Any prior withdrawals from or partial surrenders of the contractaccumulated at a rate of interest of three percent per year; and
b. The amount of any indebtedness to the insurer on the contract, includinginterest due and accrued.
2. The net considerations for a given contract year used to define theminimum nonforfeiture amount shall be not less than zero and shall equal thecorresponding gross considerations credited to the contract during thatcontract year less an annual contract charge of $30 and less a collectioncharge of $1.25 per consideration credited to the contract during thatcontract year. The percentages of net considerations shall be 65 percent ofthe net consideration for the first contract year and 87 1/2 percent of thenet considerations for the second and later contract years. Notwithstandingthe provisions of the preceding sentence, the percentage shall be 65 percentof the portion of the total net consideration for any renewal contract yearthat exceeds by not more than two times the sum of those portions of the netconsiderations in all prior contract years for which the percentage was 65percent.
C. For contracts providing for fixed scheduled considerations, minimumnonforfeiture amounts shall be calculated on the assumption thatconsiderations are paid annually in advance and shall be the same as forcontracts with flexible considerations that are paid annually with twoexceptions:
1. The portion of the net consideration for the first contract year to beaccumulated shall be the sum of 65 percent of the net consideration for thefirst contract year plus 22 1/2 percent of the excess of the netconsideration for the first contract year over the lesser of the netconsiderations for the second and third contract years.
2. The annual contract charge shall be the lesser of (i) $30 or (ii) 10percent of the gross annual consideration.
D. For contracts providing for a single consideration, minimum nonforfeitureamounts shall be the same as for contracts with flexible considerationsexcept that the percentage of net consideration used to determine the minimumnonforfeiture amount shall equal 90 percent, and the net consideration shallbe the gross consideration less a contract charge of $75.
E. Notwithstanding any other provision of this section, for any contractissued on or after April 1, 2003, and before July 1, 2005, the interest rateat which net considerations, partial withdrawals, and partial surrenders maybe accumulated, for the purposes of determining minimum nonforfeitureamounts, may be one and one-half percent per year.
F. The following provisions shall apply for contracts issued on or after July1, 2005, and at the election of the insurer may apply also to specifiedcontracts issued on or after July 1, 2004. An insurer may make this electionon a contract-form-by-contract-form basis by filing written notice with theCommission and specifying a date for the provisions to apply prior to July 1,2005.
1. The minimum nonforfeiture amount at or any time before the beginning ofany annuity payments shall equal an accumulation up to that time at rates ofinterest, as indicated in subdivision 3 of this subsection, of the netconsiderations as defined in this subsection, paid prior to that time, anddecreased by the sum of:
a. Any prior withdrawals from or partial surrenders of the contractaccumulated at rates of interest as indicated in subdivision 3 of thissubsection;
b. An annual contract charge of $50, accumulated at rates of interest asindicated in subdivision 3 of this subsection;
c. Any premium tax paid by the insurer for the contract, accumulated at ratesof interest as indicated in subdivision 3 of this subsection, adjusted forany tax that is not actually paid or which has been credited back to theinsurer, such as upon early termination of the contract; and
d. The amount of any indebtedness to the insurer on the contract, includinginterest due and accrued.
2. The net considerations for a given contract year used to define theminimum nonforfeiture amount shall be equal to 87.5 percent of the grossconsiderations credited to the contract during that contract year.
3. The interest rate used in determining minimum nonforfeiture amounts shallbe an annual rate of interest determined as the lesser of three percent perannum and the following, which shall be specified in the contract if theinterest rate will be reset:
a. The five-year Constant Maturity Treasury Rate reported by the FederalReserve as of a date, or average over a period, rounded to the nearestone-twentieth of one percent, specified in the contract no longer than 15months prior to the contract issue date or redetermination date under thissubdivision;
b. Reduced by 125 basis points;
c. Where the resulting interest rate is not less than one percent; and
d. The interest rate shall apply for an initial period and may beredetermined for additional periods. The redetermination date, basis andperiod, if any, shall be stated in the contract. The basis is the date oraverage over a specified period that produces the value of the five-yearConstant Maturity Treasury Rate to be used at each redetermination date.
4. During the period or term that a contract provides substantiveparticipation in an equity indexed benefit, it may increase the reductiondescribed in subdivision 3 b of this subsection by up to an additional 100basis points to reflect the value of the equity index benefit. The presentvalue at the contract issue date, and at each redetermination datethereafter, of the additional reduction shall not exceed the market value ofthe benefit. The Commission may require a demonstration that the presentvalue of the additional reduction does not exceed the market value of thebenefit. Where administration is lacking or unacceptable, the Commission may,at its discretion, disallow or limit the additional reduction.
G. The Commission may adopt rules and regulations to implement the provisionsof subdivision F 4 of this section and to provide for further adjustments tothe calculation of minimum nonforfeiture amounts for contracts that providesubstantive participation in an equity index benefit and for other contractsfor which the Commission determines adjustments are justified.
(1979, c. 437, § 38.1-470.1; 1986, c. 562; 2003, c. 440; 2004, c. 313.)
A. The minimum values specified in §§ 38.2-3222 through 38.2-3225 and38.2-3227 of any paid-up annuity, cash surrender or death benefits availableunder an annuity contract shall be based upon the minimum nonforfeitureamounts defined in this section and applied as follows:
1. For contracts issued before April 1, 2003, the amounts shall be determinedin accordance with subsections B, C, and D.
2. For contracts issued on or after April 1, 2003, and before July 1, 2004,the amounts shall be determined in accordance with the applicable provisionsof subsections B, C, D, and E of this section.
3. For contracts issued on or after July 1, 2004, and before July 1, 2005,the amounts shall be determined in accordance with the applicable provisionsof subsections B, C, D, and E of this section unless the insurer makes theelection authorized by subsection F of this section in which case the amountsshall be determined in accordance with subdivisions F 1 through F 4.
4. For contracts issued on or after July 1, 2005, the amounts shall bedetermined in accordance with subdivisions F 1 through F 4.
B. 1. For contracts providing for flexible considerations, the minimumnonforfeiture amount at or any time before the beginning of any annuitypayments shall equal any accumulation up to that time at an annual rate ofinterest of three percent of percentages of the net considerations as definedin this subsection, paid prior to that time, increased by an existingadditional amount credited by the insurer to the contract and decreased bythe sum of:
a. Any prior withdrawals from or partial surrenders of the contractaccumulated at a rate of interest of three percent per year; and
b. The amount of any indebtedness to the insurer on the contract, includinginterest due and accrued.
2. The net considerations for a given contract year used to define theminimum nonforfeiture amount shall be not less than zero and shall equal thecorresponding gross considerations credited to the contract during thatcontract year less an annual contract charge of $30 and less a collectioncharge of $1.25 per consideration credited to the contract during thatcontract year. The percentages of net considerations shall be 65 percent ofthe net consideration for the first contract year and 87 1/2 percent of thenet considerations for the second and later contract years. Notwithstandingthe provisions of the preceding sentence, the percentage shall be 65 percentof the portion of the total net consideration for any renewal contract yearthat exceeds by not more than two times the sum of those portions of the netconsiderations in all prior contract years for which the percentage was 65percent.
C. For contracts providing for fixed scheduled considerations, minimumnonforfeiture amounts shall be calculated on the assumption thatconsiderations are paid annually in advance and shall be the same as forcontracts with flexible considerations that are paid annually with twoexceptions:
1. The portion of the net consideration for the first contract year to beaccumulated shall be the sum of 65 percent of the net consideration for thefirst contract year plus 22 1/2 percent of the excess of the netconsideration for the first contract year over the lesser of the netconsiderations for the second and third contract years.
2. The annual contract charge shall be the lesser of (i) $30 or (ii) 10percent of the gross annual consideration.
D. For contracts providing for a single consideration, minimum nonforfeitureamounts shall be the same as for contracts with flexible considerationsexcept that the percentage of net consideration used to determine the minimumnonforfeiture amount shall equal 90 percent, and the net consideration shallbe the gross consideration less a contract charge of $75.
E. Notwithstanding any other provision of this section, for any contractissued on or after April 1, 2003, and before July 1, 2005, the interest rateat which net considerations, partial withdrawals, and partial surrenders maybe accumulated, for the purposes of determining minimum nonforfeitureamounts, may be one and one-half percent per year.
F. The following provisions shall apply for contracts issued on or after July1, 2005, and at the election of the insurer may apply also to specifiedcontracts issued on or after July 1, 2004. An insurer may make this electionon a contract-form-by-contract-form basis by filing written notice with theCommission and specifying a date for the provisions to apply prior to July 1,2005.
1. The minimum nonforfeiture amount at or any time before the beginning ofany annuity payments shall equal an accumulation up to that time at rates ofinterest, as indicated in subdivision 3 of this subsection, of the netconsiderations as defined in this subsection, paid prior to that time, anddecreased by the sum of:
a. Any prior withdrawals from or partial surrenders of the contractaccumulated at rates of interest as indicated in subdivision 3 of thissubsection;
b. An annual contract charge of $50, accumulated at rates of interest asindicated in subdivision 3 of this subsection;
c. Any premium tax paid by the insurer for the contract, accumulated at ratesof interest as indicated in subdivision 3 of this subsection, adjusted forany tax that is not actually paid or which has been credited back to theinsurer, such as upon early termination of the contract; and
d. The amount of any indebtedness to the insurer on the contract, includinginterest due and accrued.
2. The net considerations for a given contract year used to define theminimum nonforfeiture amount shall be equal to 87.5 percent of the grossconsiderations credited to the contract during that contract year.
3. The interest rate used in determining minimum nonforfeiture amounts shallbe an annual rate of interest determined as the lesser of three percent perannum and the following, which shall be specified in the contract if theinterest rate will be reset:
a. The five-year Constant Maturity Treasury Rate reported by the FederalReserve as of a date, or average over a period, rounded to the nearestone-twentieth of one percent, specified in the contract no longer than 15months prior to the contract issue date or redetermination date under thissubdivision;
b. Reduced by 125 basis points;
c. Where the resulting interest rate is not less than one percent; and
d. The interest rate shall apply for an initial period and may beredetermined for additional periods. The redetermination date, basis andperiod, if any, shall be stated in the contract. The basis is the date oraverage over a specified period that produces the value of the five-yearConstant Maturity Treasury Rate to be used at each redetermination date.
4. During the period or term that a contract provides substantiveparticipation in an equity indexed benefit, it may increase the reductiondescribed in subdivision 3 b of this subsection by up to an additional 100basis points to reflect the value of the equity index benefit. The presentvalue at the contract issue date, and at each redetermination datethereafter, of the additional reduction shall not exceed the market value ofthe benefit. The Commission may require a demonstration that the presentvalue of the additional reduction does not exceed the market value of thebenefit. Where administration is lacking or unacceptable, the Commission may,at its discretion, disallow or limit the additional reduction.
G. The Commission may adopt rules and regulations to implement the provisionsof subdivision F 4 of this section and to provide for further adjustments tothe calculation of minimum nonforfeiture amounts for contracts that providesubstantive participation in an equity index benefit and for other contractsfor which the Commission determines adjustments are justified.
(1979, c. 437, § 38.1-470.1; 1986, c. 562; 2003, c. 440; 2004, c. 313.)
