«ALLOCATED GROUP ANNUITY CONTRACTS NOT SUBJECT TO SECTION 4223 (Last Updated 5/21/13) I) Applicability I.A) Scope II) Filing Process II.A) General ...»
Andrew M. Cuomo Benjamin M. Lawsky
ALLOCATED GROUP ANNUITY CONTRACTSNOT SUBJECT TO SECTION 4223 (Last Updated 5/21/13) I) Applicability
II) Filing Process
II.A) General Information
A.1) Prior Approval Requirement
A.2) Discretionary Authority For Disapproval
A.3) No Filing Fee
A.4) Self-Support Requirement
II.B) Types of Filings
B.1) Prior Approval
B.2) Alternative Approval Procedure
B.3) Prior Approval With Certification Procedure
B.4) Filing of Non-English Versions of Forms
B.5) Out-of-State Filings
II.C) Prefiled Insurance Coverage
C.2) Conditions for Providing Coverage Prior to Approval
C.3) Recommended Practice
II.D) Preparation of Forms – Circular Letter 1963-6
D.2) Form Numbers
D.3) Hypothetical Data
D.5) Final Format
D.6) Submissions Made on Behalf of the Insurer
D.7) Incorporation by Reference
II.E) Submission Letters/SERFF Requirements
i E.1) Caption Requirement
E.2) Submission Letters/SERFF Filing Description -- Circular Letter No. 6 (1963) §I.G
E.3) Explanation of Unique Features and Market
E.4) Guaranteed Living Benefits
E.5) Maximum Maturity Date or Maximum Annuitization Age
E.7) Applicability of Market-Value Adjustment
E.8) Fixed Account Availability Restrictions and Rights to Refuse Premium Contributions............ 9 E.9) Noncompliance Explanation
E.10) Circular Letter No. 14 (1997)
E.12) Informational Filing
F.1) Explanation of Variable Material
F.2) Readability Requirement -- Flesch Score Certification
F.3) Plan of Operation
F.4) Prospectus/Offering Memorandum
F.5) Tax Qualified Endorsements and Riders
F.6) Group Annuity Summary Sheet
II.G) Key Legal Sources
III) Group Requirements
III.A) Eligible Groups
A.1) Insurer Responsibilities
A.2) Recognized Groups
III.B) Non-Recognized Groups
III.C) Unauthorized Insurers
IV) Contract Requirements
IV.A) Cover Page
A.1) Company’s Name and Address
A.2) Form Identification Number
A.3) Brief Description of the Contract
A.4) Separate Account Disclosures
A.5) Officer’s Signatures
A.6) Disclosure of Restrictions or Reserved Right to Restrict Availability of Fixed Account.......... 17 A.7) Disclosure of Reserved Right to Refuse Premium Contributions
IV.B) Specification Page
B.1) Hypothetical Data
B.2) Current Interest Rate
B.3) Guaranteed Minimum Interest Rate
ii B.4) Guaranteed Maximum Charges/Minimum Credits
B.5) Current Charges/Credits
B.6) Sub-accounts of the Separate Account
B.7) Smallest Annual Rate of Return
IV.C) Table of Contents
IV.D) Standard Provisions
D.1) Grace Period-§3223(a)
D.2) Entire Contract-§3223(b)
D.3) Misstatement of Age or Sex-§3223(c)
D.4) Active Life Certificate
D.5) Retired Life Certificate
IV.E) Regulation No. 139 Provisions
E.1) Plan Benefit Rule
E.2) Betterment of Rates
E.3) Allocated Share of Benefit Payments
E.4) Participant Directed Investment Option
E.5) Plan Amendments or Changes In Plan Administration
E.6) Bona Fide Termination of Employment
E.7) Contract Termination
E.8) Market-Value Adjustment Provision
E.9) Liquidated Damages Provision
IV.F) Separate Account Provisions -- Section 4240 and Regulation No. 47
F.1) Isolation/Segregation Provision
F.2) Asset Identification
F.3) Guarantees of Value
F.5) Asset Maintenance
F.7) Asset Ownership
F.8) Insulation Provision
F.9) Incidental Death Benefit
F.10) Involuntary Cashout - Small Annuities
F.11) Mortality and Expense Guarantees
F.12) Variable Annuity Payment Computation
F.13) Deferral of Payment
F.14) Annual Reports
F.16) Nonforfeiture Requirements Applicable to Separate Account Annuity Contracts................. 35 F.17) Termination of Employment and Death Benefit
iii IV.G) Other Provisions
G.1) Loan Provisions
G.2) Dividend Provision
G.3) Non-Benefit Related Withdrawals and Transfers
G.4) Competing Funds Provision
G.5) Liquidity Protection Provision
G.6) Purchase Rate Guarantee/Unilateral Change
G.7) Credit Rating Downgrade Provisions
G.8) Annuity Settlement Options
G.9) Commutation of Payments
G.10) Annuity Commencement Date Waiting Period
G.11) Maturity Date or Maximum Annuitization Age
G.12) Transfers Between Accounts
G.13) Owner and Beneficiary Provisions
G.14) Variable Annuity Guaranteed Living Benefits (VAGLB)
G.15) Waiver of Surrender Charges or Reduction in Fees
G.16) Telephone Transfers
G.17) Interest on Surrenders
G.18) Interest on Deferrals of Death Proceeds
G.19) Claims of Creditors
G.22) Private Placement
IV.H) Fixed Account Availability and Rights to Refuse Premium Contributions
H.1) Insurer-Initiated Transfers
H.2) Money Market Option/Default
H.3) Prior Notice Restriction
H.4) Scope of Reserved Right
V) Separate Account Plan of Operation
V.A) Prior Approval Requirement
A.2) Form Marketing
A.3) Fund Changes
V.B) Qualification Requirements
B.1) Contract Description
B.2) Method of Operation
B.3) Biographical Data
B.4) Authorized Foreign Insurer
B.5) Other Information
iv V.C) Informal Guidelines
This outline is current as of 5/21/13. Subsequent changes to statutes, regulations, circular letters, etc., may not be reflected in the outline. In case of any doubt, please contact the Life Bureau.
For paper filings, the “re” of the submission letter must identify each form and the memorandum of variable material for each form that is being submitted for approval or filed for informational purposes and must be in compliance with Circular Letter No. 8 (1999). Section 3201(b)(6) (“Deemer”) filings must be identified in the “re” or caption. Circular Letter No. 6 (2004) filings must be identified in bold print in the body of the submission letter or in the “re” or caption. For SERFF filings, please see the Department’s guidance for SERFF filings available on the Department’s website at http://www.dfs.ny.gov/insurance/serflife.htm.
Submission Letters/SERFF Filing Description -- Circular Letter No. 6 (1963) §I.G.
E.2) (a) For paper submissions, the submission letter must be submitted in duplicate and signed by a representative of the company authorized to submit forms for the company.
(b) For SERFF submissions, the Life Bureau no longer requires that a separate signed cover letter be included with submissions. Instead, any information that would ordinarily be included in the signed Cover Letter must be placed in the SERFF Filing Description. Inclusion of “Please see cover letter” or phrases of similar intent in the filing description section will not be considered as meeting filing requirements.
Note: References in this outline to submission letter content requirements are also requirements for the SERFF Filing Description unless otherwise noted.
(c) Advise as to whether or not the form is replacing a previously submitted form.
If there have not been a substantial number of changes, submit a highlighted copy showing the material differences or changes made to the form. If the changes are too extensive, then a highlighted copy is not required, but the changes must be identified in the submission letter. State whether the previously submitted form was approved, disapproved, withdrawn or otherwise disposed or is still pending approval (under review) with the Department and provide the form number and file number of the such form.
(d) If a form being filed for formal approval had previously been submitted for preliminary review, a reference to the previous submission and a statement setting out either (a) that the formal filing agrees precisely with the previous submission or (b) the changes made in the form since the time of preliminary review. Submit a highlighted copy showing the differences or changes made to the form. A redlined copy is helpful.
(e) If a form is intended to replace a very recently approved form because of an error found in the approved form and the approved form was not issued, the insurer may request to make a substitution of the approved form. The substitution request letter must confirm that the form has not been issued and identify the changes made to the corrected form. The insurer may, under these circumstances, use the same form number on the corrected form being submitted. If the original form was approved in paper format the insurer must also return the stamped original of the approved form to the Department. If, however, the form has been issued, the insurer must place a new form number on the corrected form and need not return the previously approved form. This option is not available for policy forms approved under Circular Letter 6 (2004) filings.
(f) If the form being submitted is other than a contract (i.e. rider, endorsement, or insert page), give the form number of the contract and certificate forms with which it will be used, or, if for more general use, describe the type or group of such forms as well as whether the pending form(s) will be used with new and/or previously issued/delivered contracts/certificates.
(g) When the policy form is designed as an insert page form, the insurer must submit a statement of the mandatory pages which must always be included in the policy form, and a list of all optional pages, if any, including application forms, together with an explanation of how the form will be used (previously approved forms should be identified by form number and approval date). We object to a company’s use of the matrix approach that identifies benefit provisions within a document with separate form numbers. See Circular Letter No. 6 (1963) § I.G.8. and Circular Letter No. 4 (1963) § I.A.2.
(h) Statement as to how the form will be used as described in Circular Letter 1976-12.
(i) Description of the benefits and coverage provided. Circular Letter 1963-6 § I.G.2 and 7.
(j) Identify the type of group as defined in §4238(b). Specify the applicable paragraph or paragraphs in §4238(b) which best describe the group or groups for which the policy forms are intended. The statement that the forms are for use with all eligible groups should be avoided.
(k) Description of the type of plan or program funded by the contract (i.e., defined benefit plan, defined contribution plan, profit sharing, money purchase, etc.) and identify the applicable Code provision (e.g., IRC §§401(a), 401(k), 403(b), 408 Simple IRA and SEP IRA, 457, etc.).
(l) Statement as to whether the contract is contributory or noncontributory, together with a description of the contribution as voluntary or involuntary and tax status of the contribution. We regard salary reduction contributions in IRC §§401(k), 403(b), 457 and other similar plans as employee contributions.
(m)For contracts with variable accounts, submission letters should indicate whether the contract has been filed with the Securities and Exchange Commission (“SEC”) and the current status of such filing.
(n) If the contract provides commutation benefits the letter must so indicate.
(o) If partial withdrawals do not result in a pro rata reduction in the death benefit provided under a variable annuity contract, the letter must disclose this fact.
Explanation of Unique Features and Market E.3) Submission letters should be as detailed as possible explaining any unique or innovative products or features and any special markets intended. (In general, an innovative or unique product or feature would include one that has not been previously approved by the Department for the insurer).
Guaranteed Living Benefits E.4) (a) These benefits provide for a guaranteed floor on certain elective benefits (e.g., cash surrender value) regardless of the performance of the variable funds. The submission letter must disclose any guaranteed living benefits (e.g., guaranteed minimum account balance [GMAB], guaranteed minimum income benefit [GMIB], or guaranteed minimum withdrawal benefit [GMWB]) provided under the contract, including whether the certificate holder can discontinue the benefit (and charge for the benefit) once elected.
(b) The submission letter must include a description of any asset allocation models, (e.g., investment allocation restrictions or limitations as well as transfer limitations) associated with the VAGLB. Detailed trading rules associated with the VAGLB, if any are applicable, must be submitted to the Department for filing.
Maximum Maturity Date or Maximum Annuitization Age E.5) If the contract provides for a maximum annuitization age or maximum maturity date, the submission letter must specify the maximum issue age. See also §IV.G.11 of this outline.
Sex-Distinct/Unisex E.6) Submission letter must advise whether the policy/certificate is sex-distinct or unisex. If sex-distinct, the letter must confirm that the certificate will not be delivered under the policy in any employer-employee situation subject to the Norris decision and/or Title VII of the Civil Rights Act of 1964. If a previously approved unisex endorsement or unisex pages will be used with the contract for Norris or Title VII situations, the submission letter should so state.
Applicability of Market-Value Adjustment E.7) Submission letter must indicate whether a market value adjustment (MVA) formula is applicable.