2023 Montana Code Annotated › Title 33. Insurance and Insurance Companies › Chapter 20. Life Insurance › Part 9. Annuity Disclosure › 33-20-905. Standards for disclosure document and buyer's guide

33-20-905. Standards for disclosure document and buyer's guide.
(1) When the application for an annuity contract is taken in a face-to-face meeting, the applicant must be given, at or before the time of application, both the disclosure document and the buyer's guide.
(2) (a) When the application for an annuity contract is taken by means other than in a face-to-face meeting, the applicant must be sent both the disclosure document and the buyer's guide not later than 5 business days after the completed application is received by the insurer.
(b) When an application is received as a result of a direct solicitation through the mail, providing a disclosure document and a buyer's guide in the mailing inviting prospective applicants to apply for an annuity contract satisfies the requirement that the disclosure document and buyer's guide be provided not later than 5 business days after receipt of the application.
(c) When an application is received over the internet, taking reasonable steps to make the disclosure document and buyer's guide available for viewing and printing on the insurer's website satisfies the requirement that the disclosure document and the buyer's guide be provided not later than 5 business days of receipt of the application.
(d) A solicitation for an annuity contract provided in other than a face-to-face meeting must include a statement that the proposed applicant may contact the commissioner's office for a free annuity buyer's guide, or an insurer may include a statement that the prospective applicant may contact the insurer for a free annuity buyer's guide.
(3) When the disclosure document and buyer's guide are not provided at or before the time of application, a free-look period of not less than 15 days must be provided for the applicant to return the annuity contract without penalty. This free-look period must run concurrently with any other free-look period provided under state law.
(4) At a minimum, the following information must be included in the disclosure document:
(a) the generic name of the contract, the company product name, if different, the form number, and the fact that it is an annuity;
(b) the insurer's name and address;
(c) a description of the contract and its benefits, emphasizing its long-term nature, including when appropriate:
(i) the guaranteed elements, nonguaranteed elements, and determinable elements of the contract and their limitations, if any, and an explanation of how the elements operate;
(ii) an explanation of the initial crediting rate, specifying any bonus or introductory portion, the duration of the rate, and the fact that rates may change from time to time and are not guaranteed;
(iii) periodic income options both on a guaranteed and nonguaranteed basis;
(iv) any value reductions caused by withdrawals from or surrender of the contract within 10 years of issuance under 33-20-309;
(v) how values in the contract can be accessed;
(vi) the death benefit, if one is available, and how it will be calculated;
(vii) a summary of the federal tax status of the contract and any penalties applicable on withdrawal of values from the contract; and
(viii) the impact of any rider, such as a long-term care rider;
(d) specific dollar amount or percentage charges and fees with an explanation of how they apply; and
(e) information about the current guaranteed rate for new contracts that contains a clear notice that the rate is subject to change.
(5) Insurers shall define terms used in the disclosure statement in language that facilitates the understanding by a typical person within the segment of the public to which the disclosure statement is directed.
History: En. Sec. 11, Ch. 476, L. 2007; amd. Sec. 2, Ch. 177, L. 2017.