N.J. Admin. Code § Tit. 11, ch. 4, subch. 59, app APPENDIX

Current through Register Vol. 56, No. 24, December 18, 2024

Appendix - APPENDIX

ANNUITY DISCLOSURE STATEMENT

(a) The issuing insurer's name and address. The form should include the street address, not just a PO Box number. If address is not in state of domicile, both domiciliary address and administrative address should be given.

(b) The generic name of the annuity (i.e., Fixed Single Premium Deferred Annuity Disclosure, Flexible Premium Deferred Annuity Disclosure, or Single Premium Immediate Annuity Disclosure).

-- The insurer's product/marketing name, if any

-- Annuity form number for which the disclosure will be used, and

-- The same information for any rider or endorsement to the annuity;

(This information should be shown at the top of the page. A company logo may also be inserted.)

(c) A statement that the product is a deferred or immediate annuity, accompanied by a definition of an annuity or immediate annuity.

1. This statement shall briefly explain each of the major features of the annuity. (Suggested language: (i) This annuity is fixed, which means it earns a guaranteed interest rate during the entire life of the contract; (ii) This annuity is deferred, which means payouts begin at a future date. You don't pay taxes on the interest it earns until the money is paid to you; or (iii) This is an immediate annuity which means payouts must begin within 13 months of the issue date.)

2. The disclosure shall state that the account value has premiums and interest credited, and expense charges subtracted. It also shall state that the account value is used to determine annuity, death, and surrender or withdrawal payments.

3. The term flexible premiums must indicate any limits (maximum, minimum, or timing) on premiums.

(d) A summary describing how the annuity earns interest, clearly distinguishing between guaranteed, non-guaranteed, and determinable elements, including any charge, by dollar amount or percentage, and other considerations provided for the annuity, with an explanation of their application under the contract.

1. A detailed description of the crediting interest rate. (The fixed annuity guaranteed interest rate during the entire life of the contract should be disclosed. Also, any initial guaranteed interest rate period, non-guaranteed interest, features such as bonuses or equity-indexed, and indexed guaranteed interest rate should be disclosed.)

2. The amount of surrender charges, if any, and when they are paid.

3. Any other charges or adjustments in the amount received when taking money from an annuity.

4. A separate section stating the amounts of any other fees or charges, such as a market value adjustment, if applicable, contract fees and annual service fees, and when and how they are collected.

5. A statement that describes the expense charges. If there are no explicit expense charges (other than the surrender charges) the statement should so indicate.

(e) If a table is included, it must contain an explanation with an example using information from the table.

(f) Definitions for the terms "owner", "annuitant" and "beneficiary".

(g) Each income payment option, including whether there is a specified maturity date.

(h) A description on payment options and restrictions on withdrawing money.

(i) A statement on what happens if the annuitant doesn't choose a payout option.

(j) A statement addressing the ability (or inability) of the annuitant to surrender (cancel) the annuity once payouts begin.

(k) Any death benefit and the method of its calculation.

1. A detailed description on death options. The different options for a spouse, civil union partner, or other beneficiary must be mentioned, if applicable.

(l) A brief description of all optional riders, including either the range or maximum fee charged for each option.

(m) If no optional benefit riders are offered, a statement that no such riders are available.

(n) A summary of the Federal tax status of the annuity, and any tax penalty applicable based upon a withdrawal or surrender. The disclosure should clearly indicate the tax status (i.e., qualified, non-qualified) of the annuity contract.

(o) In addition to including wording that a penalty tax of 10 percent may be charged on distributions prior to age 591/2, the form shall also state that there may be exceptions to the penalty, and that the person may wish to consult a tax professional for further information.

(p) A statement that a tax-deferred annuity can be exchanged for another without paying taxes on earnings.

(q) A statement that there is no additional tax advantage to purchasing an annuity as part of a qualified plan, other than the tax advantage provided by the qualified plan itself.

(r) At least a 10-day cancellation period to return the annuity for any or no reason and receive a prompt refund of the premium paid, including any contract fees or charges. Also, the disclosure should explain the cancellation procedure.

(s) Required statement: "This is a summary document and not part of your contract with the insurer."

(t) A general description of the company as well as all contact information, including an address, phone number, website, and e-mail address (as applicable). The insurer may also include financial strength ratings.

(u) A statement that the annuity is subject to regulatory oversight by the New Jersey Department of Banking and Insurance and that consumers may contact the Department at 609-272-7272 or 1-800-446-7467 or at the website http://www.njdobi.org for assistance.

N.J. Admin. Code Tit. 11, ch. 4, subch. 59, app APPENDIX