(a) This section shall not apply to any: - (ii) Group annuity contract purchases in connection with one or more retirement plans or plans of deferred compensation established or maintained by or for one or more employers (including partnerships or sole proprietorships), employee organizations, or any combination thereof, or other than plans providing individual retirement accounts or individual retirement annuities under Section 408 of the Internal Revenue Code, as now or hereafter amended;
- (iii) Premium deposit fund;
- (vi) Deferred annuity contract after annuity payments have commenced;
- (vii) Reversionary annuity; or
- (viii) To any contract which is to be delivered outside this state through an insurance producer or other representative of the company issuing the contract.
(b) To the extent that a variable annuity contract provides benefits that do not vary in accordance with the investment performance of a separate account before the annuity commencement date, the contract shall contain provisions that satisfy the requirements of W.S. §§ 26-16-401 et seq. and shall not otherwise be subject to this section.
(c) For contracts issued on or after the effective date of this regulation no variable annuity contract, except as stated in Subsections (a) and (b), shall be delivered or issued for delivery in this state unless it contains in substance the following provisions, or provisions which in the opinion of the commissioner are at least as favorable to the contractholder, upon cessation of payment of considerations under the contract: - (i) That upon cessation of payment of considerations under a contract, the company will grant a paid-up annuity benefit on a plan described in the contract that complies with Subsection (g). The description will include a statement of the mortality table, if any, and guaranteed or assumed interest rates used in calculating annuity payments.
- (ii) 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 annuity payments, the company will pay in lieu of a paid-up annuity benefit a cash surrender benefit described in the contract that complies with Subsection (h). The contract may provide that the company reserves the right, at its option, to defer the determination and payment of a cash surrender benefit for any period during which the New York Stock Exchange is closed for trading (except for normal holiday closing) or when the Securities and Exchange Commission has determined that a state of emergency exists that may make determination and payment impractical.
- (iii) A statement that a 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 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.
(d) The minimum values as specified in this section of paid-up annuity, cash surrender or death benefits available under a variable annuity contract shall be based upon nonforfeiture amounts meeting the requirements of this subsection. - (i) The minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be equal to an accumulation up to that time at rates of interest equal to the net investment return (as hereinafter defined) of the net considerations (as defined in Subsection (e)) paid prior to that time, decreased by the sum of Paragraphs (A) through (D) below:
- (A) Any prior withdrawals from or partial surrenders of the contract accumulated at rates of interest equal to the net investment return;
- (B) An annual contract charge of $50, accumulated at rates of interest equal to the net investment return;
- (C) Any premium tax paid by the company for the contract, accumulated at rates of interest equal to the net investment return; and
- (D) The amount of any indebtedness to the company on the contract, including interest due and accrued.
- (ii) "Net investment return" means that the rate of investment return to be credited to the variable annuity contract in accordance with the terms of the contract after deductions for tax charges, if any, and for asset charges either at a rate not in excess of that stated in the contract, or in the case of a contract issued by a nonprofit corporation under which the contractholder participates fully in the investment, mortality and expense experience of the account, in an amount not in excess of the actual expense not offset by other deductions. The net investment return to be credited to a contract shall be determined at least monthly.
(e) The net considerations for a given contract year used to define the minimum nonforfeiture amount in Subsection (d) shall be an amount equal to eighty-seven and one-half percent (87.5%) of the gross considerations credited to the contract during that contract year.
(f) Demonstration that a contract's nonforfeiture amounts comply with this section shall be based on the following assumptions: - (i) Values should be tested at the end of each of the first twenty (20) contract years;
- (ii) A net investment return of seven percent (7%) per year should be used;
- (iii) If the contract provides for transfers to another separate account or to another investment division within the same separate account, one transfer per contract year should be assumed;
- (iv) In determining the state premium tax applicable to the contract, the state of residence should be assumed to equal the state of delivery;
- (v) With respect to contracts providing for periodic considerations, monthly considerations of $100 should be assumed for each of the first 240 months;
- (vi) With respect to contracts providing for a single consideration, a $10,000 single consideration should be assumed; and
(g) Any paid-up annuity benefit available under a variable annuity contract shall be such that its present value on the annuity commencement date is at least equal to the minimum nonforfeiture amount on that date. The present value shall be computed using the mortality table, if any, and the guaranteed or assumed interest rates used in calculating the annuity payments.
(h) For variable annuity contracts that provide cash surrender benefits, the cash surrender benefit at any time prior to the annuity commencement date shall not be less than the minimum nonforfeiture amount computed after the request for surrender is received by the company. The death benefit under such contracts shall be at least equal to the cash surrender benefit.
(i) A variable annuity contract that does not provide cash surrender benefits or does not provide death benefits at least equal to the minimum nonforfeiture amount prior to the annuity commencement date shall include a statement in a prominent place in the contract that these benefits are not provided.
(j) Notwithstanding the requirements of this section, a variable annuity contract may provide under the situations specified in Paragraph (i) or (ii) of this subsection that the company, at its option, may cancel the annuity and pay the contractholder its accumulated value and by such payment be released of any further obligation under the contract: - (i) If, at the time the annuity becomes payable, the accumulated value is less than $2,000, or would provide an initial income of less than $20 per month; or
- (ii) If, prior to the time the annuity becomes payable under a periodic payment variable annuity contract, no considerations have been received under the contract for a period of two (2) full years and the total considerations paid prior to such period, reduced to reflect any partial withdrawals from or partial surrenders of the contract, and the accumulated value amount to less than $2,000.
(k) For a variable annuity contract that 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 Subsection (d) 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 additional benefits shall not be required in any paid-up benefits, unless the additional benefits separately would require minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits.
044-66 Wyo. Code R. § 66-7