Missouri Revised Statutes
Chapter 376
Life, Health and Accident Insurance
←376.670
Section 376.671.1
376.672→
August 28, 2015
Provisions which shall be contained in annuity contracts--inapplicability date.
376.671. 1. This section shall not apply to any reinsurance, group
annuity purchased under a retirement plan or plan of deferred compensation
established or maintained by an employer (including a partnership or sole
proprietorship) or by an employee organization, or by both, other than a
plan providing individual retirement accounts or individual retirement
annuities under Section 408 of the Internal Revenue Code, as now or
hereafter amended, premium deposit fund, variable annuity, investment
annuity, immediate annuity, any deferred annuity contract after annuity
payments have commenced, or reversionary annuity, nor to any contract which
shall be delivered outside this state through an agent or other
representative of the company issuing the contract.
2. In the case of contracts issued on or after the operative date of
this section as defined in subsection 11 of this section, no contract of
annuity, except as stated in subsection 1 of this section, shall be
delivered or issued for delivery in this state unless it contains in
substance the following provisions, or corresponding provisions which in
the opinion of the director are at least as favorable to the
contractholder, upon cessation of payment of considerations under the
contract:
(1) That upon cessation of payment of considerations under a
contract, the company will grant a paid-up annuity benefit on a plan
stipulated in the contract of such value as is specified in subsections 4,
5, 6, 7, and 9 of this section;
(2) If a contract provides for a lump sum settlement at maturity, or
at any other time, that upon surrender of the contract at or prior to the
commencement of any annuity payments, the company will pay in lieu of any
paid-up annuity benefit a cash surrender benefit of such amount as is
specified in subsections 4, 5, 7, and 9 of this section. The company shall
reserve the right to defer the payment of such cash surrender benefit for a
period of six months after demand therefor with surrender of the contract;
(3) A statement of the mortality table, if any, and interest rates
used in calculating any minimum paid-up annuity, cash surrender or death
benefits that are guaranteed under the contract, together with sufficient
information to determine the amounts of such benefits;
(4) A statement that any paid-up annuity, cash surrender or death
benefits that may be available under the contract are not less than the
minimum benefits required by any statute of the state in which the contract
is delivered and an explanation of the manner in which such benefits are
altered by the existence of any additional amounts credited by the company
to the contract, any indebtedness to the company on the contract or any
prior withdrawals from or partial surrenders of the contract.
Notwithstanding the requirements of this section, any deferred annuity
contract may provide that if no considerations have been received under a
contract for a period of two full years and the portion of the paid-up
annuity benefit at maturity on the plan stipulated in the contract arising
from considerations paid prior to such period would be less than twenty
dollars monthly, the company may at its option terminate such contract by
payment in cash of the then present value of such portion of the paid-up
annuity benefit, calculated on the basis of the mortality table, if any,
and interest rate specified in the contract for determining the paid-up
annuity benefit, and by such payment shall be relieved of any further
obligation under such contract.
3. The minimum values as specified in subsections 4, 5, 6, 7, and 9
of this section of any paid-up annuity, cash surrender or death benefits
available under an annuity contract shall be based upon minimum
nonforfeiture amounts as defined in this section.
(1) With respect to contracts providing for flexible considerations,
the minimum nonforfeiture amount at any time at or prior to the
commencement of any annuity payment shall be equal to an accumulation up to
such time at a rate of interest of three percent per annum of percentages
of the net considerations (as hereinafter defined) paid prior to such time,
decreased by the sum of:
(a) Any prior withdrawals from or partial surrenders of the contract
accumulated at a rate of interest of three percent per annum; and
(b) The amount of any indebtedness to the company on the contract,
including interest due and accrued and increased by any existing additional
amounts credited by the company to the contract. The net considerations
for a given contract year used to define the minimum nonforfeiture amount
shall be an amount not less than zero and shall be equal to the
corresponding gross considerations credited to the contract during that
contract year less an annual contract charge of thirty dollars and less a
collection charge of one dollar and twenty-five cents per consideration
credited to the contract during that contract year. The percentages of net
considerations shall be sixty-five percent of the net consideration for the
first contract year and eighty-seven and one-half percent of the net
considerations for the second and later contract years. Notwithstanding
the provisions of the preceding sentence, the percentage shall be
sixty-five percent of the portion of the total net consideration for any
renewal contract year which exceeds by not more than two times the sum of
those portions of the net considerations in all prior contract years for
which the percentage was sixty-five percent;
(2) With respect to contracts providing for fixed scheduled
considerations, minimum nonforfeiture amounts shall be calculated on the
assumption that considerations are paid annually in advance and shall be
defined as for contracts with flexible considerations which are paid
annually with two exceptions:
(a) The portion of the net consideration for the first contract year
to be accumulated shall be the sum of sixty-five percent of the net
consideration for the first contract year plus twenty-two and one-half
percent of the excess of the net consideration for the first contract year
over the lesser of the net considerations for the second and third contract
years;
(b) The annual contract charge shall be the lesser of thirty dollars
or ten percent of the gross annual consideration;
(3) With respect to contracts providing for a single consideration,
minimum nonforfeiture amounts shall be defined as for contracts with
flexible considerations except that the percentage of net consideration
used to determine the minimum nonforfeiture amount shall be equal to ninety
percent, and the net consideration shall be the gross consideration less a
contract charge of seventy-five dollars;
(4) Notwithstanding any other provision of this subsection, for any
contract issued on or after July 1, 2002, and before July 1, 2006, the
interest rate at which net considerations, prior withdrawals, and partial
surrenders shall be accumulated, for the purpose of determining minimum
nonforfeiture amounts, shall be one and one-half percent per annum.
4. Any paid-up annuity benefit available under a contract shall be
such that its present value on the date annuity payments are to commence is
at least equal to the minimum nonforfeiture amount on that date. Such
present value shall be computed using the mortality table, if any, and the
interest rate specified in the contract for determining the minimum paid-up
annuity benefits guaranteed in the contract.
5. For contracts which provide cash surrender benefits, such cash
surrender benefits available prior to maturity shall not be less than the
present value as of the date of surrender of that portion of the maturity
value of the paid-up annuity benefit which would be provided under the
contract at maturity arising from considerations paid prior to the time of
cash surrender reduced by the amount appropriate to reflect any prior
withdrawals from or partial surrenders of the contract, such present value
being calculated on the basis of an interest rate not more than one percent
higher than the interest rate specified in the contract for accumulating
the net considerations to determine such maturity value, decreased by the
amount of any indebtedness to the company on the contract, including
interest due and accrued, and increased by any existing additional amounts
credited by the company to the contract. In no event shall any cash
surrender benefit be less than the minimum nonforfeiture amount at that
time. The death benefit under such contracts shall be at least equal to
the cash surrender benefit.
6. For contracts which do not provide cash surrender benefits, the
present value of any paid-up annuity benefit available as a nonforfeiture
option at any time prior to maturity shall not be less than the present
value of that portion of the maturity value of the paid-up annuity benefit
provided under the contract arising from considerations paid prior to the
time the contract is surrendered in exchange for, or changed to, a deferred
paid-up annuity, such present value being calculated for the period prior
to the maturity date on the basis of the interest rate specified in the
contract for accumulating the net considerations to determine such maturity
value, and increased by any existing additional amounts credited by the
company to the contract. For contracts which do not provide any death
benefits prior to the commencement of any annuity payments, such present
values shall be calculated on the basis of such interest rate and the
mortality table specified in the contract for determining the maturity
value of the paid-up annuity benefit. However, in no event shall the
present value of a paid-up annuity benefit be less than the minimum
nonforfeiture amount at that time.
7. For the purpose of determining the benefits calculated under
subsections 5 and 6 of this section, in the case of annuity contracts under
which an election may be made to have annuity payments commence at optional
maturity date, the maturity date shall be deemed to be the latest date for
which election shall be permitted by the contract, but shall not be deemed
to be later than the anniversary of the contract next following the
annuitant's seventieth birthday or the tenth anniversary of the contract,
whichever is later.
8. Any contract which does not provide cash surrender benefits or
does not provide death benefits at least equal to the minimum nonforfeiture
amount prior to the commencement of any annuity payments shall include a
statement in a prominent place in the contract that such benefits are not
provided.
9. Any paid-up annuity, cash surrender or death benefits available at
any time, other than on the contract anniversary under any contract with
fixed scheduled considerations, shall be calculated with allowance for the
lapse of time and the payment of any scheduled considerations beyond the
beginning of the contract year in which cessation of payment of
considerations under the contract occurs.
10. For any contract which provides, within the same contract by
rider or supplemental contract provision, both annuity benefits and life
insurance benefits that are in excess of the greater of cash surrender
benefits or a return of the gross considerations with interest, the minimum
nonforfeiture benefits shall be equal to the sum of the minimum
nonforfeiture benefits for the annuity portion and the minimum
nonforfeiture benefits, if any, for the life insurance portion computed as
if each portion were a separate contract. Notwithstanding the provisions
of subsections 4, 5, 6, 7, and 9 of this section, additional benefits
payable in the event of total and permanent disability, as reversionary
annuity or deferred reversionary annuity benefits, or as other policy
benefits additional to life insurance, endowment and annuity benefits, and
considerations for all such additional benefits, shall be disregarded in
ascertaining the minimum nonforfeiture amounts, paid-up annuity, cash
surrender and death benefits that may be required by this section. The
inclusion of such additional benefits shall not be required in any paid-up
benefits, unless such additional benefits separately would require minimum
nonforfeiture amounts, paid-up annuity, cash surrender and death benefits.
11. After September 28, 1979, any company may file with the director
a written notice of its election to comply with the provisions of this
section after a specified date before September 28, 1981. After the filing
of such notice, then upon such specified date, which shall be the operative
date of this section for such company, this section shall become operative
with respect to annuity contracts thereafter issued by such company. If a
company makes no such election, the operative date of this section for such
company shall be September 28, 1981.
12. The provisions of this section shall not apply to any new
contract entered into after July 1, 2006.
(L. 1979 S.B. 325, A.L. 2002 H.B. 1568 merged with S.B. 1009, A.L.
2004 H.B. 938 merged with S.B. 1188, A.L. 2010 H.B. 1965)
2004
2002
1991
2004
376.671. 1. This section shall not apply to any reinsurance, group
annuity purchased under a retirement plan or plan of deferred compensation
established or maintained by an employer (including a partnership or sole
proprietorship) or by an employee organization, or by both, other than a
plan providing individual retirement accounts or individual retirement
annuities under Section 408 of the Internal Revenue Code, as now or
hereafter amended, premium deposit fund, variable annuity, investment
annuity, immediate annuity, any deferred annuity contract after annuity
payments have commenced, or reversionary annuity, nor to any contract which
shall be delivered outside this state through an agent or other
representative of the company issuing the contract.
2. In the case of contracts issued on or after the operative date of
this section as defined in subsection 11 of this section, no contract of
annuity, except as stated in subsection 1 of this section, shall be
delivered or issued for delivery in this state unless it contains in
substance the following provisions, or corresponding provisions which in
the opinion of the director are at least as favorable to the
contractholder, upon cessation of payment of considerations under the
contract:
(1) That upon cessation of payment of considerations under a
contract, the company will grant a paid-up annuity benefit on a plan
stipulated in the contract of such value as is specified in subsections 4,
5, 6, 7, and 9 of this section;
(2) If a contract provides for a lump sum settlement at maturity, or
at any other time, that upon surrender of the contract at or prior to the
commencement of any annuity payments, the company will pay in lieu of any
paid-up annuity benefit a cash surrender benefit of such amount as is
specified in subsections 4, 5, 7, and 9 of this section. The company shall
reserve the right to defer the payment of such cash surrender benefit for a
period of six months after demand therefor with surrender of the contract;
(3) A statement of the mortality table, if any, and interest rates
used in calculating any minimum paid-up annuity, cash surrender or death
benefits that are guaranteed under the contract, together with sufficient
information to determine the amounts of such benefits;
(4) A statement that any paid-up annuity, cash surrender or death
benefits that may be available under the contract are not less than the
minimum benefits required by any statute of the state in which the contract
is delivered and an explanation of the manner in which such benefits are
altered by the existence of any additional amounts credited by the company
to the contract, any indebtedness to the company on the contract or any
prior withdrawals from or partial surrenders of the contract.
Notwithstanding the requirements of this section, any deferred annuity
contract may provide that if no considerations have been received under a
contract for a period of two full years and the portion of the paid-up
annuity benefit at maturity on the plan stipulated in the contract arising
from considerations paid prior to such period would be less than twenty
dollars monthly, the company may at its option terminate such contract by
payment in cash of the then present value of such portion of the paid-up
annuity benefit, calculated on the basis of the mortality table, if any,
and interest rate specified in the contract for determining the paid-up
annuity benefit, and by such payment shall be relieved of any further
obligation under such contract.
3. The minimum values as specified in subsections 4, 5, 6, 7, and 9
of this section of any paid-up annuity, cash surrender or death benefits
available under an annuity contract shall be based upon minimum
nonforfeiture amounts as defined in this section.
(1) With respect to contracts providing for flexible considerations,
the minimum nonforfeiture amount at any time at or prior to the
commencement of any annuity payment shall be equal to an accumulation up to
such time at a rate of interest of three percent per annum of percentages
of the net considerations (as hereinafter defined) paid prior to such time,
decreased by the sum of:
(a) Any prior withdrawals from or partial surrenders of the contract
accumulated at a rate of interest of three percent per annum; and
(b) The amount of any indebtedness to the company on the contract,
including interest due and accrued and increased by any existing additional
amounts credited by the company to the contract. The net considerations
for a given contract year used to define the minimum nonforfeiture amount
shall be an amount not less than zero and shall be equal to the
corresponding gross considerations credited to the contract during that
contract year less an annual contract charge of thirty dollars and less a
collection charge of one dollar and twenty-five cents per consideration
credited to the contract during that contract year. The percentages of net
considerations shall be sixty-five percent of the net consideration for the
first contract year and eighty-seven and one-half percent of the net
considerations for the second and later contract years. Notwithstanding
the provisions of the preceding sentence, the percentage shall be
sixty-five percent of the portion of the total net consideration for any
renewal contract year which exceeds by not more than two times the sum of
those portions of the net considerations in all prior contract years for
which the percentage was sixty-five percent;
(2) With respect to contracts providing for fixed scheduled
considerations, minimum nonforfeiture amounts shall be calculated on the
assumption that considerations are paid annually in advance and shall be
defined as for contracts with flexible considerations which are paid
annually with two exceptions:
(a) The portion of the net consideration for the first contract year
to be accumulated shall be the sum of sixty-five percent of the net
consideration for the first contract year plus twenty-two and one-half
percent of the excess of the net consideration for the first contract year
over the lesser of the net considerations for the second and third contract
years;
(b) The annual contract charge shall be the lesser of thirty dollars
or ten percent of the gross annual consideration;
(3) With respect to contracts providing for a single consideration,
minimum nonforfeiture amounts shall be defined as for contracts with
flexible considerations except that the percentage of net consideration
used to determine the minimum nonforfeiture amount shall be equal to ninety
percent, and the net consideration shall be the gross consideration less a
contract charge of seventy-five dollars;
(4) Notwithstanding any other provision of this subsection, for any
contract issued on or after July 1, 2002, and before July 1, 2006, the
interest rate at which net considerations, prior withdrawals, and partial
surrenders shall be accumulated, for the purpose of determining minimum
nonforfeiture amounts, shall be one and one-half percent per annum.
4. Any paid-up annuity benefit available under a contract shall be
such that its present value on the date annuity payments are to commence is
at least equal to the minimum nonforfeiture amount on that date. Such
present value shall be computed using the mortality table, if any, and the
interest rate specified in the contract for determining the minimum paid-up
annuity benefits guaranteed in the contract.
5. For contracts which provide cash surrender benefits, such cash
surrender benefits available prior to maturity shall not be less than the
present value as of the date of surrender of that portion of the maturity
value of the paid-up annuity benefit which would be provided under the
contract at maturity arising from considerations paid prior to the time of
cash surrender reduced by the amount appropriate to reflect any prior
withdrawals from or partial surrenders of the contract, such present value
being calculated on the basis of an interest rate not more than one percent
higher than the interest rate specified in the contract for accumulating
the net considerations to determine such maturity value, decreased by the
amount of any indebtedness to the company on the contract, including
interest due and accrued, and increased by any existing additional amounts
credited by the company to the contract. In no event shall any cash
surrender benefit be less than the minimum nonforfeiture amount at that
time. The death benefit under such contracts shall be at least equal to
the cash surrender benefit.
6. For contracts which do not provide cash surrender benefits, the
present value of any paid-up annuity benefit available as a nonforfeiture
option at any time prior to maturity shall not be less than the present
value of that portion of the maturity value of the paid-up annuity benefit
provided under the contract arising from considerations paid prior to the
time the contract is surrendered in exchange for, or changed to, a deferred
paid-up annuity, such present value being calculated for the period prior
to the maturity date on the basis of the interest rate specified in the
contract for accumulating the net considerations to determine such maturity
value, and increased by any existing additional amounts credited by the
company to the contract. For contracts which do not provide any death
benefits prior to the commencement of any annuity payments, such present
values shall be calculated on the basis of such interest rate and the
mortality table specified in the contract for determining the maturity
value of the paid-up annuity benefit. However, in no event shall the
present value of a paid-up annuity benefit be less than the minimum
nonforfeiture amount at that time.
7. For the purpose of determining the benefits calculated under
subsections 5 and 6 of this section, in the case of annuity contracts under
which an election may be made to have annuity payments commence at optional
maturity date, the maturity date shall be deemed to be the latest date for
which election shall be permitted by the contract, but shall not be deemed
to be later than the anniversary of the contract next following the
annuitant's seventieth birthday or the tenth anniversary of the contract,
whichever is later.
8. Any contract which does not provide cash surrender benefits or
does not provide death benefits at least equal to the minimum nonforfeiture
amount prior to the commencement of any annuity payments shall include a
statement in a prominent place in the contract that such benefits are not
provided.
9. Any paid-up annuity, cash surrender or death benefits available at
any time, other than on the contract anniversary under any contract with
fixed scheduled considerations, shall be calculated with allowance for the
lapse of time and the payment of any scheduled considerations beyond the
beginning of the contract year in which cessation of payment of
considerations under the contract occurs.
10. For any contract which provides, within the same contract by
rider or supplemental contract provision, both annuity benefits and life
insurance benefits that are in excess of the greater of cash surrender
benefits or a return of the gross considerations with interest, the minimum
nonforfeiture benefits shall be equal to the sum of the minimum
nonforfeiture benefits for the annuity portion and the minimum
nonforfeiture benefits, if any, for the life insurance portion computed as
if each portion were a separate contract. Notwithstanding the provisions
of subsections 4, 5, 6, 7, and 9 of this section, additional benefits
payable in the event of total and permanent disability, as reversionary
annuity or deferred reversionary annuity benefits, or as other policy
benefits additional to life insurance, endowment and annuity benefits, and
considerations for all such additional benefits, shall be disregarded in
ascertaining the minimum nonforfeiture amounts, paid-up annuity, cash
surrender and death benefits that may be required by this section. The
inclusion of such additional benefits shall not be required in any paid-up
benefits, unless such additional benefits separately would require minimum
nonforfeiture amounts, paid-up annuity, cash surrender and death benefits.
11. After September 28, 1979, any company may file with the director
a written notice of its election to comply with the provisions of this
section after a specified date before September 28, 1981. After the filing
of such notice, then upon such specified date, which shall be the operative
date of this section for such company, this section shall become operative
with respect to annuity contracts thereafter issued by such company. If a
company makes no such election, the operative date of this section for such
company shall be September 28, 1981.
12. The provisions of this section shall expire on July 1, 2006.
2002
376.671. 1. This section shall not apply to any reinsurance, group
annuity purchased under a retirement plan or plan of deferred compensation
established or maintained by an employer (including a partnership or sole
proprietorship) or by an employee organization, or by both, other than a
plan providing individual retirement accounts or individual retirement
annuities under Section 408 of the Internal Revenue Code, as now or
hereafter amended, premium deposit fund, variable annuity, investment
annuity, immediate annuity, any deferred annuity contract after annuity
payments have commenced, or reversionary annuity, nor to any contract which
shall be delivered outside this state through an agent or other
representative of the company issuing the contract.
2. In the case of contracts issued on or after the operative date of
this section as defined in subsection 11, no contract of annuity, except as
stated in subsection 1, shall be delivered or issued for delivery in this
state unless it contains in substance the following provisions, or
corresponding provisions which in the opinion of the director are at least
as favorable to the contractholder, upon cessation of payment of
considerations under the contract:
(1) That upon cessation of payment of considerations under a
contract, the company will grant a paid-up annuity benefit on a plan
stipulated in the contract of such value as is specified in subsections 4,
5, 6, 7, and 9;
(2) If a contract provides for a lump sum settlement at maturity, or
at any other time, that upon surrender of the contract at or prior to the
commencement of any annuity payments, the company will pay in lieu of any
paid-up annuity benefit a cash surrender benefit of such amount as is
specified in subsections 4, 5, 7, and 9. The company shall reserve the
right to defer the payment of such cash surrender benefit for a period of
six months after demand therefor with surrender of the contract;
(3) A statement of the mortality table, if any, and interest rates
used in calculating any minimum paid-up annuity, cash surrender or death
benefits that are guaranteed under the contract, together with sufficient
information to determine the amounts of such benefits;
(4) A statement that any paid-up annuity, cash surrender or death
benefits that may be available under the contract are not less than the
minimum benefits required by any statute of the state in which the contract
is delivered and an explanation of the manner in which such benefits are
altered by the existence of any additional amounts credited by the company
to the contract, any indebtedness to the company on the contract or any
prior withdrawals from or partial surrenders of the contract.
Notwithstanding the requirements of this section, any deferred annuity
contract may provide that if no considerations have been received under a
contract for a period of two full years and the portion of the paid-up
annuity benefit at maturity on the plan stipulated in the contract arising
from considerations paid prior to such period would be less than twenty
dollars monthly, the company may at its option terminate such contract by
payment in cash of the then present value of such portion of the paid-up
annuity benefit, calculated on the basis of the mortality table, if any,
and interest rate specified in the contract for determining the paid-up
annuity benefit, and by such payment shall be relieved of any further
obligation under such contract.
3. The minimum values as specified in subsections 4, 5, 6, 7, and 9
of any paid-up annuity, cash surrender or death benefits available under an
annuity contract shall be based upon minimum nonforfeiture amounts as
defined in this section.
(1) With respect to contracts providing for flexible considerations,
the minimum nonforfeiture amount at any time at or prior to the
commencement of any annuity payment shall be equal to an accumulation up to
such time at a rate of interest of three percent per annum of percentages
of the net considerations (as hereinafter defined) paid prior to such time,
decreased by the sum of
(a) Any prior withdrawals from or partial surrenders of the contract
accumulated at a rate of interest of three percent per annum; and
(b) The amount of any indebtedness to the company on the contract,
including interest due and accrued and increased by any existing additional
amounts credited by the company to the contract. The net considerations
for a given contract year used to define the minimum nonforfeiture amount
shall be an amount not less than zero and shall be equal to the
corresponding gross considerations credited to the contract during that
contract year less an annual contract charge of thirty dollars and less a
collection charge of one dollar and twenty-five cents per consideration
credited to the contract during that contract year. The percentages of net
considerations shall be sixty-five percent of the net consideration for the
first contract year and eighty-seven and one-half percent of the net
considerations for the second and later contract years. Notwithstanding
the provisions of the preceding sentence, the percentage shall be
sixty-five percent of the portion of the total net consideration for any
renewal contract year which exceeds by not more than two times the sum of
those portions of the net considerations in all prior contract years for
which the percentage was sixty-five percent;
(2) With respect to contracts providing for fixed scheduled
considerations, minimum nonforfeiture amounts shall be calculated on the
assumption that considerations are paid annually in advance and shall be
defined as for contracts with flexible considerations which are paid
annually with two exceptions:
(a) The portion of the net consideration for the first contract year
to be accumulated shall be the sum of sixty-five percent of the net
consideration for the first contract year plus twenty-two and one-half
percent of the excess of the net consideration for the first contract year
over the lesser of the net considerations for the second and third contract
years;
(b) The annual contract charge shall be the lesser of thirty dollars
or ten percent of the gross annual consideration;
(3) With respect to contracts providing for a single consideration,
minimum nonforfeiture amounts shall be defined as for contracts with
flexible considerations except that the percentage of net consideration
used to determine the minimum nonforfeiture amount shall be equal to ninety
percent, and the net consideration shall be the gross consideration less a
contract charge of seventy-five dollars;
(4) Notwithstanding any other provision of this subsection, for any
contract issued on or after July 1, 2002, and before July 1, 2004, the
interest rate at which net considerations, prior withdrawals, and partial
surrenders shall be accumulated, for the purpose of determining minimum
nonforfeiture amounts, shall be one and one-half percent per annum.
4. Any paid-up annuity benefit available under a contract shall be
such that its present value on the date annuity payments are to commence is
at least equal to the minimum nonforfeiture amount on that date. Such
present value shall be computed using the mortality table, if any, and the
interest rate specified in the contract for determining the minimum paid-up
annuity benefits guaranteed in the contract.
5. For contracts which provide cash surrender benefits, such cash
surrender benefits available prior to maturity shall not be less than the
present value as of the date of surrender of that portion of the maturity
value of the paid-up annuity benefit which would be provided under the
contract at maturity arising from considerations paid prior to the time of
cash surrender reduced by the amount appropriate to reflect any prior
withdrawals from or partial surrenders of the contract, such present value
being calculated on the basis of an interest rate not more than one percent
higher than the interest rate specified in the contract for accumulating
the net considerations to determine such maturity value, decreased by the
amount of any indebtedness to the company on the contract, including
interest due and accrued, and increased by any existing additional amounts
credited by the company to the contract. In no event shall any cash
surrender benefit be less than the minimum nonforfeiture amount at that
time. The death benefit under such contracts shall be at least equal to
the cash surrender benefit.
6. For contracts which do not provide cash surrender benefits, the
present value of any paid-up annuity benefit available as a nonforfeiture
option at any time prior to maturity shall not be less than the present
value of that portion of the maturity value of the paid-up annuity benefit
provided under the contract arising from considerations paid prior to the
time the contract is surrendered in exchange for, or changed to, a deferred
paid-up annuity, such present value being calculated for the period prior
to the maturity date on the basis of the interest rate specified in the
contract for accumulating the net considerations to determine such maturity
value, and increased by any existing additional amounts credited by the
company to the contract. For contracts which do not provide any death
benefits prior to the commencement of any annuity payments, such present
values shall be calculated on the basis of such interest rate and the
mortality table specified in the contract for determining the maturity
value of the paid-up annuity benefit. However, in no event shall the
present value of a paid-up annuity benefit be less than the minimum
nonforfeiture amount at that time.
7. For the purpose of determining the benefits calculated under
subsections 5 and 6, in the case of annuity contracts under which an
election may be made to have annuity payments commence at optional maturity
date, the maturity date shall be deemed to be the latest date for which
election shall be permitted by the contract, but shall not be deemed to be
later than the anniversary of the contract next following the annuitant's
seventieth birthday or the tenth anniversary of the contract, whichever is
later.
8. Any contract which does not provide cash surrender benefits or
does not provide death benefits at least equal to the minimum nonforfeiture
amount prior to the commencement of any annuity payments shall include a
statement in a prominent place in the contract that such benefits are not
provided.
9. Any paid-up annuity, cash surrender or death benefits available at
any time, other than on the contract anniversary under any contract with
fixed scheduled considerations, shall be calculated with allowance for the
lapse of time and the payment of any scheduled considerations beyond the
beginning of the contract year in which cessation of payment of
considerations under the contract occurs.
10. For any contract which provides, within the same contract by
rider or supplemental contract provision, both annuity benefits and life
insurance benefits that are in excess of the greater of cash surrender
benefits or a return of the gross considerations with interest, the minimum
nonforfeiture benefits shall be equal to the sum of the minimum
nonforfeiture benefits for the annuity portion and the minimum
nonforfeiture benefits, if any, for the life insurance portion computed as
if each portion were a separate contract. Notwithstanding the provisions
of subsections 4, 5, 6, 7, and 9, additional benefits payable in the event
of total and permanent disability, as reversionary annuity or deferred
reversionary annuity benefits, or as other policy benefits additional to
life insurance, endowment and annuity benefits, and considerations for all
such additional benefits, shall be disregarded in ascertaining the minimum
nonforfeiture amounts, paid-up annuity, cash surrender and death benefits
that may be required by this section. The inclusion of such additional
benefits shall not be required in any paid-up benefits, unless such
additional benefits separately would require minimum nonforfeiture amounts,
paid-up annuity, cash surrender and death benefits.
11. After September 28, 1979, any company may file with the director
a written notice of its election to comply with the provisions of this
section after a specified date before September 28, 1981. After the filing
of such notice, then upon such specified date, which shall be the operative
date of this section for such company, this section shall become operative
with respect to annuity contracts thereafter issued by such company. If a
company makes no such election, the operative date of this section for such
company shall be September 28, 1981.
1991
376.671. 1. This section shall not apply to any reinsurance, group
annuity purchased under a retirement plan or plan of deferred compensation
established or maintained by an employer (including a partnership or sole
proprietorship) or by an employee organization, or by both, other than a plan
providing individual retirement accounts or individual retirement annuities
under section 408 of the Internal Revenue Code, as now or hereafter amended,
premium deposit fund, variable annuity, investment annuity, immediate annuity,
any deferred annuity contract after annuity payments have commenced, or
reversionary annuity, nor to any contract which shall be delivered outside
this state through an agent or other representative of the company issuing the
contract.
2. In the case of contracts issued on or after the operative date of
this section as defined in subsection 11, no contract of annuity, except as
stated in subsection 1, shall be delivered or issued for delivery in this
state unless it contains in substance the following provisions, or
corresponding provisions which in the opinion of the director are at least as
favorable to the contractholder, upon cessation of payment of considerations
under the contract:
(1) That upon cessation of payment of considerations under a contract,
the company will grant a paid-up annuity benefit on a plan stipulated in the
contract of such value as is specified in subsections 4, 5, 6, 7, and 9;
(2) If a contract provides for a lump sum settlement at maturity, or at
any other time, that upon surrender of the contract at or prior to the
commencement of any annuity payments, the company will pay in lieu of any
paid-up annuity benefit a cash surrender benefit of such amount as is
specified in subsections 4, 5, 7, and 9. The company shall reserve the right
to defer the payment of such cash surrender benefit for a period of six months
after demand therefor with surrender of the contract;
(3) A statement of the mortality table, if any, and interest rates used
in calculating any minimum paid-up annuity, cash surrender or death benefits
that are guaranteed under the contract, together with sufficient information
to determine the amounts of such benefits;
(4) A statement that any paid-up annuity, cash surrender or death
benefits that may be available under the contract are not less than the
minimum benefits required by any statute of the state in which the contract is
delivered and an explanation of the manner in which such benefits are altered
by the existence of any additional amounts credited by the company to the
contract, any indebtedness to the company on the contract or any prior
withdrawals from or partial surrenders of the contract.
Notwithstanding the requirements of this section, any deferred annuity
contract may provide that if no considerations have been received under a
contract for a period of two full years and the portion of the paid-up annuity
benefit at maturity on the plan stipulated in the contract arising from
considerations paid prior to such period would be less than twenty dollars
monthly, the company may at its option terminate such contract by payment in
cash of the then present value of such portion of the paid-up annuity benefit,
calculated on the basis of the mortality table, if any, and interest rate
specified in the contract for determining the paid-up annuity benefit, and by
such payment shall be relieved of any further obligation under such contract.
3. The minimum values as specified in subsections 4, 5, 6, 7, and 9 of
any paid-up annuity, cash surrender or death benefits available under an
annuity contract shall be based upon minimum nonforfeiture amounts as defined
in this section.
(1) With respect to contracts providing for flexible considerations, the
minimum nonforfeiture amount at any time at or prior to the commencement of
any annuity payment shall be equal to an accumulation up to such time at a
rate of interest of three percent per annum of percentages of the net
considerations (as hereinafter defined) paid prior to such time, decreased by
the sum of
(a) Any prior withdrawals from or partial surrenders of the contract
accumulated at a rate of interest of three percent per annum; and
(b) The amount of any indebtedness to the company on the contract,
including interest due and accrued and increased by any existing additional
amounts credited by the company to the contract. The net considerations for a
given contract year used to define the minimum nonforfeiture amount shall be
an amount not less than zero and shall be equal to the corresponding gross
considerations credited to the contract during that contract year less an
annual contract charge of thirty dollars and less a collection charge of one
dollar and twenty-five cents per consideration credited to the contract during
that contract year. The percentages of net considerations shall be sixty-five
percent of the net consideration for the first contract year and eighty-seven
and one-half percent of the net considerations for the second and later
contract years. Notwithstanding the provisions of the preceding sentence, the
percentage shall be sixty-five percent of the portion of the total net
consideration for any renewal contract year which exceeds by not more than two
times the sum of those portions of the net considerations in all prior
contract years for which the percentage was sixty-five percent;
(2) With respect to contracts providing for fixed scheduled
considerations, minimum nonforfeiture amounts shall be calculated on the
assumption that considerations are paid annually in advance and shall be
defined as for contracts with flexible considerations which are paid annually
with two exceptions:
(a) The portion of the net consideration for the first contract year to
be accumulated shall be the sum of sixty-five percent of the net consideration
for the first contract year plus twenty-two and one-half percent of the excess
of the net consideration for the first contract year over the lesser of the
net considerations for the second and third contract years;
(b) The annual contract charge shall be the lesser of thirty dollars or
ten percent of the gross annual consideration;
(3) With respect to contracts providing for a single consideration,
minimum nonforfeiture amounts shall be defined as for contracts with flexible
considerations except that the percentage of net consideration used to
determine the minimum nonforfeiture amount shall be equal to ninety percent,
and the net consideration shall be the gross consideration less a contract
charge of seventy-five dollars.
4. Any paid-up annuity benefit available under a contract shall be such
that its present value on the date annuity payments are to commence is at
least equal to the minimum nonforfeiture amount on that date. Such present
value shall be computed using the mortality table, if any, and the interest
rate specified in the contract for determining the minimum paid-up annuity
benefits guaranteed in the contract.
5. For contracts which provide cash surrender benefits, such cash
surrender benefits available prior to maturity shall not be less than the
present value as of the date of surrender of that portion of the maturity
value of the paid-up annuity benefit which would be provided under the
contract at maturity arising from considerations paid prior to the time of
cash surrender reduced by the amount appropriate to reflect any prior
withdrawals from or partial surrenders of the contract, such present value
being calculated on the basis of an interest rate not more than one percent
higher than the interest rate specified in the contract for accumulating the
net considerations to determine such maturity value, decreased by the amount
of any indebtedness to the company on the contract, including interest due and
accrued, and increased by any existing additional amounts credited by the
company to the contract. In no event shall any cash surrender benefit be less
than the minimum nonforfeiture amount at that time. The death benefit under
such contracts shall be at least equal to the cash surrender benefit.
6. For contracts which do not provide cash surrender benefits, the
present value of any paid-up annuity benefit available as a nonforfeiture
option at any time prior to maturity shall not be less than the present value
of that portion of the maturity value of the paid-up annuity benefit provided
under the contract arising from considerations paid prior to the time the
contract is surrendered in exchange for, or changed to, a deferred paid-up
annuity, such present value being calculated for the period prior to the
maturity date on the basis of the interest rate specified in the contract for
accumulating the net considerations to determine such maturity value, and
increased by any existing additional amounts credited by the company to the
contract. For contracts which do not provide any death benefits prior to the
commencement of any annuity payments, such present values shall be calculated
on the basis of such interest rate and the mortality table specified in the
contract for determining the maturity value of the paid-up annuity benefit.
However, in no event shall the present value of a paid-up annuity benefit be
less than the minimum nonforfeiture amount at that time.
7. For the purpose of determining the benefits calculated under
subsections 5 and 6, in the case of annuity contracts under which an election
may be made to have annuity payments commence at optional maturity date, the
maturity date shall be deemed to be the latest date for which election shall
be permitted by the contract, but shall not be deemed to be later than the
anniversary of the contract next following the annuitant's seventieth birthday
or the tenth anniversary of the contract, whichever is later.
8. Any contract which does not provide cash surrender benefits or does
not provide death benefits at least equal to the minimum nonforfeiture amount
prior to the commencement of any annuity payments shall include a statement in
a prominent place in the contract that such benefits are not provided.
9. Any paid-up annuity, cash surrender or death benefits available at
any time, other than on the contract anniversary under any contract with fixed
scheduled considerations, shall be calculated with allowance for the lapse of
time and the payment of any scheduled considerations beyond the beginning of
the contract year in which cessation of payment of considerations under the
contract occurs.
10. For any contract which provides, within the same contract by rider
or supplemental contract provision, both annuity benefits and life insurance
benefits that are in excess of the greater of cash surrender benefits or a
return of the gross considerations with interest, the minimum nonforfeiture
benefits shall be equal to the sum of the minimum nonforfeiture benefits for
the annuity portion and the minimum nonforfeiture benefits, if any, for the
life insurance portion computed as if each portion were a separate contract.
Notwithstanding the provisions of subsections 4, 5, 6, 7, and 9, additional
benefits payable in the event of total and permanent disability, as
reversionary annuity or deferred reversionary annuity benefits, or as other
policy benefits additional to life insurance, endowment and annuity benefits,
and considerations for all such additional benefits, shall be disregarded in
ascertaining the minimum nonforfeiture amounts, paid-up annuity, cash
surrender and death benefits that may be required by this section. The
inclusion of such additional benefits shall not be required in any paid-up
benefits, unless such additional benefits separately would require minimum
nonforfeiture amounts, paid-up annuity, cash surrender and death benefits.
11. After September 28, 1979, any company may file with the director a
written notice of its election to comply with the provisions of this section
after a specified date before September 28, 1981. After the filing of such
notice, then upon such specified date, which shall be the operative date of
this section for such company, this section shall become operative with
respect to annuity contracts thereafter issued by such company. If a company
makes no such election, the operative date of this section for such company
shall be September 28, 1981.
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