N.Y. Comp. Codes R. & Regs. Tit. 11 §§ 50-2.8

Current through Register Vol. 46, No. 51, December 18, 2024

Section 50-2.8 - Variable income payments

(a) Every separate account annuity contract that provides for annuity income payments that vary with the investment experience of any separate account shall be subject to the following:

(1) Each separate account annuity contract that provides for annuity income payments that vary with the investment experience of any separate account delivered or issued for delivery in this State shall provide that neither expenses actually incurred, other than taxes on the investment return, nor mortality actually experienced, shall adversely affect the dollar amount of variable annuity payments to any annuitant for whom variable annuity payments have commenced. Where a group variable annuity contract provides that the scale of charges to be made against the assets of a separate account may be changed without the consent of the participants for whom variable annuity payments have commenced, the contract shall provide that such changes shall not adversely affect the dollar amount of variable annuity payments that have commenced. The method of computing the dollar amount of variable annuity payments shall be such that, if the annual rate of investment return of the separate account, as defined in section 50-2.3(a)(9) of this Subpart, were six and one-half percent at all times from the issue of the contract, the amounts would not decrease. The superintendent may authorize the use of other methods or rates in computing the dollar amount of variable annuity payments where the methods or rates are determined by the superintendent to be fair, equitable, reasonable and not less favorable to the participants or annuitants; and

(2) Except as otherwise permitted by the superintendent, each authorized insurer issuing separate account annuity contracts that provide for annuity income payments that vary with the investment experience of any separate account shall accumulate an annuitant mortality fluctuation fund or funds over and above the required contract reserves and liabilities, pursuant to a plan for such accumulation that specifies reasonable maximum targets for the fund or funds and is approved by the superintendent as otherwise reasonable. Losses arising from mortality actually experienced shall be charged against the mortality fluctuation fund or funds until the fund or funds are exhausted.

(b) Every individual separate account annuity contract that provides for annuity income payments that vary with the investment experience of any separate account delivered or issued for delivery in this State, and every certificate or other writing furnished by the insurer to an employee in this State under a group separate account annuity contract in connection with the election of a variable annuity that provides for annuity income payments that vary with the investment experience of any separate account shall contain on its first page, in addition to the requirements set forth in Insurance Law section 4240(a)(11), a statement that:

(1) discloses the smallest annual rate of investment return that would have to be earned on the assets of the separate account so that the dollar amount of variable annuity payments will not decrease; or

(2) sets forth the conditions under which the dollar amount of variable annuity payments will not decrease, and a statement of any explicit contractual charges against the assets of the separate account.

(c) Every separate account annuity contract or certificate and any other writing furnished by the insurer to any person in connection with the sale or election of a variable annuity that provides for annuity income payments that vary with the investment experience of any separate account shall contain a concise and clear statement of the method used in computing the dollar amount of variable benefits.

N.Y. Comp. Codes R. & Regs. Tit. 11 §§ 50-2.8

Adopted New York State Register August 31, 2022/Volume XLIV, Issue 35, eff. 8/31/2022