Louisiana Administrative Code › Title 37 - INSURANCE › Part XIII - Regulations › Chapter 77 - Regulation 28-Variable Contract Regulation › Section XIII-7709 - Contracts Providing for Variable Benefits

Current through Register Vol. 50, No. 6, June 20, 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 insurance company in determining the
				dollar amount of benefits. Any such contract providing benefits which vary
				during the payment period, including a group contract and any certificate
				issued thereunder, shall state that the periodic payments will vary to reflect
				investment experience and shall contain, on its first page, a clear statement
				to the effect that the periodic payments thereunder are on a variable basis.
				Any such contract which provides values which are vested in an annuitant under
				an individual contract or in the holder of a certificate under a group contract
				prior to the commencement of the payment period, which values will vary to
				reflect investment experience, shall state that such values are on the variable
				basis. Any certificate issued under a group contract providing such variable
				values shall also contain the statements required by the preceding sentence. If
				any such contract provides such variable periodic payments, as well as such
				variable values, the statements required by the preceding sentences may be
				combined.
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 annuity payments.
C.
1. Any individual variable annuity contract
				delivered or issued for delivery in this state shall stipulate the investment
				increment factors to be used in computing the dollar amount of variable
				benefits or other contractual payments or values thereunder, and may guarantee
				that expenses and/or mortality results shall not adversely affect such dollar
				amounts. If not guaranteed, the expense and mortality factors shall also be
				stipulated in the contract.
2. In
				computing the dollar amount of variable benefits or other contractual payments
				or values under an individual variable annuity contract:
a. the annual net investment increment
				assumption shall not exceed 5 percent, except with the approval of the
				commissioner;
b. to the extent that
				the level of benefits may be affected by future mortality results, the
				mortality factor shall be determined from the Annuity Mortality Table for 1949,
				Ultimate, or any modification of that table not having a higher mortality rate
				at any age, or, if approved by the commissioner, from another table.
3.
Expense
, as
				used in this Subsection, may exclude some or all taxes, as stipulated in the
				contract.
4. Variable annuity
				contracts delivered or issued for delivery in this state may include as an
				incidental benefits provision for payment on death during the deferred period
				of an amount not in excess of the greater of the sum of the premiums or
				stipulated payments paid under the contract or the value of the contract at the
				time of death; such provisions will not be deemed to be contracts of life
				insurance and therefore not subject to the provisions of the Insurance Law
				governing life insurance. Provision for any other benefit on death during the
				deferred period will be subject to such insurance provisions.
5. The reserve liability for variable
				annuities shall be established pursuant to the requirements of the standard
				valuation law, in accordance with actuarial procedures that recognize the
				variable nature of the benefits provided.