Section 45-04-02-06 - Variable benefits under variable annuity contracts1. 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 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 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 benefits. 3. Any variable annuity contract delivered or issued for delivery in this state shall define the investment increment factors to be used in computing the dollar amount of variable benefits or other variable contractual payments or values thereunder, and may guarantee that expense or mortality results shall not adversely affect such dollar amounts. In the case of an individual variable annuity contract under which expense or mortality results may adversely affect the dollar amount of benefits, the expense or mortality factors to be used (as aforesaid for the investment increment factors) shall be defined in the contract. In computing the dollar amount of the first annuity payment, payable on the annuity commencement date, under an individual variable annuity contract:
a. The net annual investment increment assumption shall not exceed five percent per year, except with the approval of the commissioner; and b. With respect to a contract under which the level of benefits may be adversely affected by future mortality results, the mortality assumption shall be based upon the Annuity Mortality Table for 1949, Ultimate, or any modification of such table not having a lower life expectancy at any age, or, if approved by the commissioner, some other table. "Expense" as used in this subsection may exclude some or all taxes, as specified in the contract.
4. The reserve liability for variable annuity contracts shall be established pursuant to the requirements of North Dakota Century Code chapter 26.1-35, in accordance with actuarial procedures that recognize the variable nature of the benefits provided and any mortality guarantees. General Authority: NDCC 26.1-33-17, 26.1-34-11
Law Implemented: NDCC 26.1-33-15, 26.1-34-11
N.D. Admin Code 45-04-02-06