California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 11 - Separate Account or Accounts-Variable Contracts › Section 2530 - Contracts Providing for Variable Benefits

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Any variable contract delivered or issued
				  for delivery in this State shall contain a statement of the essential features
				  of the procedures to be followed by the insurer in determining the dollar
				  amount of such variable or fixed benefits. Any variable contract providing
				  benefits payable in variable amounts, including such 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. As to any contract providing benefits
				  payable in fixed amounts during the annuity payment period, such statements may
				  be modified to reflect that the benefits, although guaranteed after the annuity
				  commencement date, depend upon the experience of the separate account prior to
				  the annuity commencement date.
(b)
				  Illustrations of benefits payable under any variable 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.
(c) No individual variable annuity contract
				  providing 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:
(1) 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 payment 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:
(2) A provision that, at any time within 2
				  years from the date of default, in making periodic stipulated payments to the
				  insurer during the life of the annuitant 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;
(3) A provision specifying the options
				  available in the event of default in a periodic stipulated payment. Such
				  options may include an option to surrender the contract for a cash value as
				  determined by the contract, and shall include an option to receive a paid-up
				  annuity if the contract is not surrendered for cash, the amount of such paid-up
				  annuity being determined by applying the value of the contract at the annuity
				  commencement date in accordance with the terms of the
				  contract.