Compilation of Rules and Regulations of the State of Georgia › Department 120 - OFFICE OF COMMISSIONER OF INSURANCE, SAFETY FIRE COMMISSIONER AND INDUSTRIAL LOAN COMMISSIONER › Chapter 120-2 - RULES OF COMMISSIONER OF INSURANCE › Subject 120-2-73 - Appendix - .05 › Rule 120-2-73-.04 - Contract Summary

Current through Rules and Regulations filed through June 27, 2024
(1) The Contract Summary must be a separate
				document. All information required to be disclosed must be set out in such a
				manner as not to minimize or render any portion thereof obscure. Any amounts
				which remain level for two or more contract years may be represented by a
				single number if it is clearly indicated what amounts are applicable for each
				contract year. Amounts in subparagraphs (2)(f), (g), (i) and (k)3 of this
				section shall, in the Case of flexible premium annuity contracts, be determined
				either according to an anticipated pattern of consideration payments or on the
				assumption that considerations payable will be $100 a month or $1,000 per year.
				If not specified in the contract, annuity payments shall be assumed to commence
				at age sixty-five or ten years from issue, whichever is later. Zero amounts
				shall be displayed as zero and shall not be displayed as blank
				spaces.
(2) For purposes of this
				regulation, "Contract Summary" means a written statement describing the
				elements of the annuity contract and deposit fund, including but not limited
				to, where applicable, the following:
(a) A
				prominently placed title as follows: "Contract Summary" (This shall be followed
				by an identification of the annuity contract or deposit fund, or both, to which
				the summary applies);
(b) The name
				and address of the insurance agent or, if no agent is involved, a statement of
				the procedure to be followed in order to receive responses to inquiries
				regarding the Contract Summary;
(c)
				The full name and home office or administrative office address of the insurer
				which will issue the annuity contract or administer the deposit fund;
(d) One of the options under the contract
				available for annuity payout. This form of annuity payout should be used for
				providing information in subparagraphs (2)(f), (g) and (i) of this
				section;
(e) A prominent statement
				that the contract does not provide cash surrender values if such is the
				case;
(f) The amount of the
				guaranteed annuity payments at the scheduled commencement of the annuity, based
				on the assumption that all scheduled considerations are paid and there are no
				prior withdrawals from or partial surrender of the contract and no indebtedness
				to the insurer on the contract;
(g)
				On the same basis as for subparagraph (2)(f) of this section except for
				guarantees, illustrative annuity payments not greater in amount than those
				based on
1. the current dividend scale and the
				interest rate currently used to accumulate dividends under such contracts, or
				the current excess interest rate credited by the insurer, and
2. current annuity purchase rates.
A dividend scale or excess interest rate which has been
				  publicly declared by the insurer with an effective date not more than two
				  months subsequent to the date of declaration shall be considered a current
				  dividend scale or current excess interest rate;
(h) For annuity contracts or deposit funds
				for which guaranteed cash surrender values at any duration are less than the
				total considerations paid, a prominent statement that such contract or fund may
				result in loss if kept for only a few years, together with a reference to the
				schedule of guaranteed cash surrender values required by subparagraph (2)(i)3.
				of this section;
(i) The following
				amounts, where applicable, for the first ten contract years and representative
				contract years thereafter sufficient to clearly illustrate the patterns of
				considerations and benefits, including but not limited to, the twentieth
				contract year and at least one age from 60-70 and at the scheduled
				commencements of annuity payments:
1. The
				gross annual or single consideration for the annuity contract. Any additional
				considerations for optional benefits, such as disability premium waiver, should
				be shown separately;
2. Scheduled
				annual or single deposit for the deposit fund, if any;
3. The total guaranteed death benefit and
				cash surrender value at the end of the year; or, if no guaranteed cash
				surrender values are provided, the total guaranteed paid-up annuity at the end
				of the year. Values for a deposit fund must be shown separately from those for
				a basic contract;
4. The total
				illustrative death benefit and cash surrender value or paid-up annuity at the
				end of the year, not greater in amount than that based on:
(i) the current dividend scale and the
				interest rate currently used to accumulate dividends under such contracts or
				the current excess interest rate credited by the insurer, and
(ii) current annuity purchase rates.
A dividend scale or excess interest rate which has been
				  publicly declared by the insurer with an effective date not more than two
				  months subsequent to the date of declaration shall be considered a current
				  dividend scale or current excess interest rate.
(j) For a Contract Summary which
				includes values based on the current dividend scale or the current dividend
				accumulation or excess interest rate, a statement that such values are
				illustrations and are not guaranteed.
(k) The following should be shown with regard
				to the consideration for the basic annuity contract or deposit fund.
				Considerations applicable to optional benefits, such as disability premium
				waiver, should be excluded.
1. A statement of
				all fees, charges and loading amounts that are or may be deducted from initial
				or subsequent considerations paid or that are or may be deducted from the
				contract or fund values prior to or at contract maturity, including but not
				limited to any surrender penalties, discontinuance fees, partial surrender or
				withdrawal penalties or fees, transaction fees, and account maintenance
				fees.
2. A statement of the
				interest rates used in calculating the guaranteed and illustrative contract or
				fund values.
3. The yield on gross
				considerations at the end of ten years (if the annuity payments have not yet
				commenced) and at the scheduled commencement of annuity payments. For contracts
				without surrender values, only the yield at the scheduled commencement of
				annuity payments need be shown. The yield shall be figured on the basis of the
				contract value used to determine the annuity payments. These yield figures
				shall be shown on both a guaranteed and illustrative basis. They represent the
				effective annual interest rates at which the accumulation of 100% of all gross
				considerations would be equal to the guaranteed and illustrative cash surrender
				values at the points specified. For contracts without surrender values the
				yields shall be figured on the basis of the contract values used to determine
				annuity payments at the points specified.
(l) The date on which the Contract Summary is
				prepared.