N.Y. Comp. Codes R. & Regs. Tit. 11 §§ 50-1.7

Current through Register Vol. 46, No. 51, December 18, 2024

Section 50-1.7 - Standard provisions in separate account annuity contracts

(a) Individual separate account annuity contracts. No individual separate account annuity contract shall be delivered or issued for delivery in this State unless it contains in substance the following provisions, to the extent that such provisions are applicable to such contract, or provisions which in the opinion of the superintendent are appropriate to individual separate account annuity contracts and are more favorable to the holders of such contracts:

(1) A provision that there shall be a period of grace, either of 30 days or of one month, within which any stipulated payment to the insurer falling due after the first may be made, during which period of grace the contract shall continue in full force. The contract shall include a statement of the basis for determining the date as of which any such payment received during the period of grace shall be applied to produce the values arising therefrom under the contract.

(2) A provision that at any time within one year from the date of default in making stipulated payments to the insurer, during the life of the annuitant and unless the cash surrender value has been paid, the contract will be reinstated, on the application of the person entitled thereto pursuant to the provisions of the contract, upon payment to the insurer of such overdue payments as required by the contract and of all indebtedness to the insurer on the contract. The contract shall include a statement of the basis for determining the date as of which the amount to cover such overdue payments and indebtedness shall be applied to produce the values arising therefrom under the contract. Where appropriate, the contract may contain a provision requiring, as a condition for reinstatement, evidence of insurability, including good health, reasonably satisfactory to the insurer.

(3) A provision specifying the options available, prior to the commencement date of the annuity, in the event of default in a stipulated payment or of surrender of the contract. Such options shall include an option to receive the cash surrender value of the contract or an option to receive a paid-up annuity to commence at the maturity date provided in the contract, if the contract is not surrendered for cash. The contract shall specify the method by which, and the date as of which, the accumulated value of the contract shall be determined and may provide for the deduction therefrom of a reasonable charge for unamortized acquisition expenses in arriving at the amount of cash surrender value payable. If only the option to receive a paid-up annuity is available, the accumulated value of the contract in the separate account or accounts of the company at the time of default shall, at the option of the contractholder, be transferred to the general account of the company to provide a fixed dollar paid-up annuity. Any amounts so transferred shall be considered as cash surrender values for the purpose of paragraph (4) of this section. The kind and amount of the paid-up annuity and the conditions of its payment shall be in accordance with the provisions of the contract and the purchase rates stipulated therein.

(4) In connection with a reservation of right to defer cash surrender payments, any individual separate account annuity contract shall provide, if and to the extent permitted or required under the Federal Investment Company Act of 1940, as amended, and any other applicable Federal or State law, either:

(i) that the company reserves the right, at its option, to defer the determination and payment of any cash surrender value for a period of six months after demand therefor with surrender of the contract;

(ii) that the company reserves the right, at its option, to defer the determination and payment of any cash surrender value for a period of nine months in which installments will be paid; or

(iii) that the company reserves the right, at its option, to defer the payment of any cash surrender value in accordance with the deferment provisions of the Federal Investment Company Act of 1940, as amended.

(b) Group separate account annuity contracts. No group separate account annuity contract shall be delivered or issued for delivery in this State and no certificate shall be used in connection therewith unless it contains in substance the following provisions to the extent that such provisions are applicable to such contract or to such certificate, as the case may be, or provisions which in the opinion of the superintendent are appropriate to group separate account annuity contracts and are more favorable to annuitants, or not less favorable to annuitants and more favorable to the holders of such contracts:

(1) A provision that there shall be a period of grace either of 30 days or of one month, within which any stipulated payment to be remitted by the holder to the insurer, falling due after one year from date of issue may be made, during which period of grace the contract shall continue in full force. The contract shall include a statement of the basis for determining the date as of which any such payment received during the period of grace shall be applied to produce the values arising therefrom under the contract.

(2) A provision, with an appropriate reference thereto in the certificate, specifying the options available to an annuitant who contributes to the cost of the annuity, or to the annuitant's beneficiary or beneficiaries in the event of:

(i) the termination of employment or the termination of the group separate account annuity contract, while the annuitant is alive and prior to the commencement date of the annuity; or

(ii) the annuitant's death prior to the commencement date of the annuity. Such options shall, in any case, include either:

(a) an option to receive a cash payment at least equal to the aggregate amount of the annuitant's contributions made under the contract, without interest; or

(b) an option to receive a cash payment equal to the accumulated value of the annuitant's contributions made under the contract.

N.Y. Comp. Codes R. & Regs. Tit. 11 §§ 50-1.7

Adopted New York State Register August 31, 2022/Volume XLIV, Issue 35, eff. 8/31/2022