Ga. Comp. R. & Regs. R. 120-2-22-.05 - Contracts Providing for Variable Benefits
(1) Any variable annuity contract providing
benefits payable in variable amounts delivered or issued for delivery in this
State shall contain a statement of the essential features of the procedures to
be followed by the insurance company in determining the dollar amount of such
variable benefits. Any such contract, including a group contract and any
certificate in evidence of variable benefits issued thereunder, shall state
that such dollar amount will vary to reflect investment experience and shall
contain on its first page a clear statement to the effect that the benefits
thereunder are on a variable basis.
(2) Illustrations of benefits payable under
any variable annuity contract providing benefits payable in variable amounts
shall not include projections of past investment experience into the future or
attempted predictions of future investment experience; provided that nothing
contained herein is intended to prohibit use of hypothetical assumed rates of
return to illustrate possible levels of annuity payments.
(3) No individual variable annuity contract
calling for the payment of periodic stipulated payments 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 more
favorable to the holders of such contracts:
(a) a provision that there shall be a period
of grace 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 force. The contract may 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 under the contract
arising therefrom;
(b) a provision
that, at any time within one year from the date of default, in making periodic
stipulated payments to the insurer during the life of the annuitant and unless
the cash surrender value has been paid, the contract may be reinstated upon
payment to the insurer of such overdue payments as required by the contract,
and of all indebtedness to the insurer on the contract, including interest. The
contract may 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 under the contract arising therefrom.
(4) Any individual variable
annuity contract delivered or issued for delivery in this State shall stipulate
the investment increment factor to be used in computing the dollar amount of
variable benefits or other contractual payments or values thereunder, and may
guarantee that expense and/or mortality results shall not adversely affect such
dollar amounts. If not guaranteed, the expense and mortality factors shall also
be stipulated in the contract.
In computing the dollar amount of variable benefits or other contractual payments or values under an individual variable annuity contract:
(a) the annual net
investment increment assumption shall not exceed 5%, except with the approval
of the Commissioner;
(b) to the
extent that the level of benefits may be affected by future mortality results,
the mortality factor shall be determined from the Annuity Mortality Table for
1949, Ultimate, or any modification of that table not having a lower life
expectancy at any age, or, if approved by the Commissioner, from another table.
"Expense," as used in this paragraph, may exclude some or all taxes, as stipulated in the contract.
(5) Variable annuity contracts may include as
an incidental benefit provision for payment on death during the deferred period
of an amount not in excess of the greater of the sum of the premiums or
stipulated payments paid under the contract or the value of the contract at the
time of death.
(6) The reserve
liability for variable annuities shall be established pursuant to the
requirements of the standard valuation law in accordance with actuarial
procedures that recognize the variable nature of the benefits provided and
mortality guarantees.
Notes
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