N.Y. Comp. Codes R. & Regs. tit. 11 § 43.5

Current through Register Vol. 46, No. 43, October 23, 2024

Section 43.5 - Advertising and disclosure with respect to market-value adjustment and formula

(a) Each statement of preliminary information furnished to an applicant pursuant to section 3209 of the Insurance Law shall contain a description of the market-value adjustment formula contained in the policy. The description of the market-value adjustment formula shall include:

(1) the provisions of the formula, a description of each of the elements of the formula, including if the formula is based on an index of publicly traded obligations, the nature of the index and the manner in which it is used in the formula, and identification of the source or publication where any data used in the formula may be found;

(2) a statement of the frequency with which adjustments made in accordance with the formula will be made;

(3) a statement of the points in time when cash surrender benefits are available without application of the formula, and for how long they are available on an unadjusted basis;

(4) a prominent statement that the application of the formula may result in both upward and downward adjustments of cash surrender benefits and loan values;

(5) numerical examples of such upward and downward adjustments;

(6) a prominent statement as to any surrender charges and the periods during which the charges may be made;

(7) in the case of flexible premium policies, a statement as to any separate treatment of different premiums as to guaranteed rates, market-value adjustments, surrender charges, specified time intervals and guaranteed benefit dates; and

(8) a statement that loan repayments will be treated as a current premium remittance for interest crediting and subsequent market-value adjustment purposes.

(b)

(1) The annual report required under section 4221(a)(7) of the Insurance Law shall, in addition to the information called for by that section, disclose any amount by which cash surrender benefits and policy loan values were adjusted in accordance with the market-value adjustment formula since the last annual report. The report should also indicate:

(i) that future application of the market-value adjustment formula may result in both upward and downward adjustments to the cash surrender benefits and policy loan values; and

(ii) the date on which cash surrender benefits will be determined without the use of such formula.

(2) The format of the report shall be filed with the department with the policy form submission.

(c) In addition to complying with the provisions of Part 219 of this Title, any advertisement mentioning cash surrender benefits or policy loan values shall include:

(1) a statement of the frequency with which adjustments made in accordance with the formula will be made;

(2) a statement that the application of the formula may result in both upward and downward adjustments of cash surrender benefits and loan values; and

(3) a statement of the points in time when cash surrender values are available without application of the formula.

(d) The disclosure requirements of this section are in addition to any other disclosure requirements that the superintendent may prescribe for policies subject to section 4232(b) or 4518 of the Insurance Law or that are otherwise imposed by law.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 43.5