N.J. Admin. Code § 11:4-43.3
Current through Register Vol. 56, No. 21, November 4, 2024
Section 11:4-43.3 - General requirements and prohibitions(a) All individual annuities shall be filed with the Commissioner pursuant to 17B:25-18; P.L. 1995, c.73, sections 16 and 17; and N.J.A.C. 11:4-40 prior to being delivered or issued for delivery in this State.(b) Individual annuity contract forms shall not contain any provisions which are unjust, unfair, inequitable, ambiguous, misleading, likely to result in misinterpretation or are contrary to law.(c) All individual annuities shall satisfy the following conditions: 1. If a form guarantees an interest rate of less than three percent during the accumulation phase, the insurer shall include with the submission a demonstration that policy values and benefits are not less than the minimum nonforfeiture amounts specified in N.J.S.A. 17B:25-20g.2. If a form offers varying interest rate guarantee periods, specimen specification pages shall be submitted for each of the various guarantee periods.3. The same contract form shall not be issued as both an immediate and a deferred annuity.4. The form shall contain a provision describing any method for adjusting benefits and values on the basis of misstatement of age or sex. Interest may be applied in determining overpayments and underpayments at a rate specified in the form. The same specified rate shall apply to overpayments and underpayments.(d) An insurer shall use the same form for field issue and home office issue contracts when the contract terms are written so as to make the difference in the administrative aspect of the issuance and delivery process negligible.1. The application and policy for field issue individual annuities shall be submitted as separate forms with separate identifying form numbers. The application shall not be substituted for or obscure the policy face page.2. Coverage under a field issue contract shall be effective no later than the date the policy is delivered to the owner. Field issue contracts shall not provide for delayed, deferred or conditional effective dates. Suicide and contestability periods shall commence no later than the effective date of coverage.3. Submissions of field issue forms shall include a certification from an officer of the insurer that the insurer will be bound by all information recorded by the agent on the application, including, but not limited to, the initial interest rate and the initial interest rate guarantee period, even in the case of errors.(e) Payment of premiums for individual annuities may be made by credit card. Submissions of forms which permit payment by credit card shall include a separate certification from an officer of the insurer that the premium will be considered paid when the credit card facility is billed.(f) The form may contain language that permits the insurer unilaterally to amend or modify the form to satisfy any applicable law. However, the owner shall be permitted to refuse any such change unless noncompliance would cause the contract to be null and void or fail to comply with New Jersey or Federal law.(g) The form shall be amended or endorsed to reflect any changes or modifications made to the form subsequent to issue.(h) Death benefits in individual annuities will be considered subsidiary or incidental if they satisfy one of the following conditions:1. A death benefit equal to or less than the contract value (annuity account value or surrender value);2. A death benefit equal to or less than a "highest periodic value" calculated for any prior period for which the contract was in force (for instance, highest contract anniversary value, highest monthly value, highest five-year value) adjusted for subsequent premiums and withdrawals. Such a death benefit provision would only be applicable to an equity-indexed, market value adjusted, or other indexed contract with the potential for increase or decrease in the annuity value;3. A death benefit equal to or less than the greater of the contract value or the accumulation of premiums at a specified interest rate (adjusted for withdrawals), not to exceed 200 percent of premiums, such premiums to be reduced by any withdrawals;4. A death benefit equal to or less than a percentage of the "earnings" or "gain" on the contract (defined as the contract value less premiums paid plus withdrawals), provided that the amount of the death benefit in addition to the contract value is no greater than 50 percent of the gain on the contract;5. A death benefit based on a combination of an "accumulation" death benefit ((h)3 above) and a death benefit based upon the "gain" of the contract ((h)4 above), provided that the combined amount does not exceed the greater of the two death benefits described in (h)3 and 4 above; or6. Any other death benefit which a qualified actuary, as defined in 11:4-47.2, certifies and demonstrates to the Department has an expected and/or maximum value that is within 25 percent of the value of a death benefit permitted by (h)1 through 5 above.N.J. Admin. Code § 11:4-43.3
Amended by R.2000 d.130, effective 3/20/2000.
See: 31 N.J.R. 3910(a), 32 N.J.R. 1024(a).
In (c), deleted a former 1, recodified former 2 through 4 as 1 through 3, and deleted a former second sentence in the new 2.
Amended by R.2001 d.410, effective 11/5/2001.
See: 33 N.J.R. 2265(a), 33 N.J.R. 3748(a).
In (c), added 4; added (f) and (g).
Amended by R.2006 d.374, effective 10/16/2006.
See: 37 N.J.R. 3543(a), 38 N.J.R. 4488(b).
Added (h).
Amended by R.2007 d.131, effective 5/7/2007.
See: 38 N.J.R. 4392(a), 39 N.J.R. 1733(a).
In (d), deleted "not" following "shall" and inserted "when the contract terms are written so as to make the difference in the administrative aspect of the issuance and delivery process negligible".