N.Y. Comp. Codes R. & Regs. tit. 11 § 44.9

Current through Register Vol. 46, No. 45, November 2, 2024

Section 44.9 - Policy provisions for contracts containing market-value adjustments

(a) The contract cover page shall contain a prominent statement that the contract contains a market-value adjustment formula, and that the operation of the formula may result in both upward and downward adjustments in cash surrender benefits. Points in time when cash surrender benefits are available without the application of the market-value adjustment formula shall also be described on the cover page.

(b) The contract shall contain a description of the market-value adjustment formula containing:

(1) the provisions of the formula and a description of each of the elements used in the formula, along with an identification of the source or publication where the data used in the formula can be found;

(2) if an index of publicly traded obligations is used in the formula, a statement that in the event that this index is no longer available, a suitable replacement index, subject to approval of the superintendent, would then be utilized;

(3) if the new guarantee rate is used in the formula, a statement of the procedure to determine the rate to be used in the event that the new guarantee rate cannot be determined from the company's contracts then being offered (or then in force), and a statement of the procedure to determine the adjustment in the event that the company no longer issues guaranteed rate contracts (see section 44.5[b][3][ii] of this Part);

(4) a statement of the frequency with which market-value adjustments will be calculated, including the dates to be used in identifying the interest factors;

(5) a statement of the points in time when contract values are available without the application of any market-value adjustment formula, and for how long they are available on an unadjusted basis;

(6) a statement that a notice will be mailed at least 15 but not more than 45 days prior to the beginning of each of the 30-day periods referred to in section 44.5(b)(3)(iii) and (iv) of this Part and containing at least the information specified therein (if the periods coincide, a combined notice will suffice); and

(7) in case of flexible premium contracts, a statement as to any separate treatment of premiums as to guaranteed rates, withdrawal charges, specified time intervals and guaranteed benefit dates.

(c) The contract's annuity payment provision shall describe how annuity benefits are affected by the market-value adjustment formula. If the amount applied to provide annuities is adjusted by a market-value adjustment formula, then such adjusted value must be treated as new funds and current annuity purchase rates must be based on new monies.

(d) The contract's death benefit provision shall describe how death benefits are affected by the market-value adjustment formula.

(e) If a loan provision is contained in the contract, this provision shall describe how contract loans and loan accounts are affected by the market-value adjustment formula, including the effect of loan repayments on the actual accumulation amount.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 44.9