New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter III - Policy and Certificate Provisions › Subchapter A - Life, Accident and Health Insurance › Part 50 - Separate Accounts and Separate Account Contracts › Subpart 50-2 - Separate Accounts and Separate Account Contracts on or after January 1, 2023 › Section 50-2.9 - Standard provisions in separate account contracts

Current through Register Vol. 46, No. 28, July 10, 2024
(a) No individual separate account contract
					 providing variable benefits, other than variable benefits as described in
					 section 50-2.3(a)(7)(iii)  of this Subpart shall be delivered or issued for
					 delivery in this State unless it contains, with respect to those variable
					 benefits, in substance the following provisions, to the extent that the
					 provisions apply to such contract, or provisions that in the opinion of the
					 superintendent are appropriate to individual separate account contracts and are
					 more favorable to the contractholders:
(1) A
					 provision that there shall be a period of grace, either of 30 days or of one
					 month, within which any stipulated payment to the insurer falling due after the
					 first may be made, during which period of grace the contract shall continue in
					 full force. The contract shall include a statement of the basis for determining
					 the date as of which a payment received during the period of grace shall be
					 applied to produce the values arising therefrom under the contract;
(2) A provision that at any time within one
					 year from the date of default in making stipulated payments to the insurer,
					 during the life of the annuitant and unless the cash surrender value has been
					 paid, the contract will be reinstated, on the application of the person
					 entitled thereto pursuant to the provisions of the contract, upon payment to
					 the insurer of such overdue payments as required by the contract and of all
					 indebtedness to the insurer on the contract. The contract shall include a
					 statement of the basis for determining the date as of which the amount to cover
					 the overdue payments and indebtedness shall be applied to produce the values
					 arising therefrom under the contract. Where appropriate, the contract may
					 contain a provision requiring, as a condition for reinstatement, evidence of
					 insurability, including good health, reasonably satisfactory to the
					 insurer;
(3) A provision specifying
					 the options available, prior to the commencement date of the annuity, in the
					 event of default in a stipulated payment or of surrender of the contract.
(i) Such options in the event of surrender
					 shall include an option to receive the cash surrender value of the contract.
					 Such options in the event of default in a stipulated payment shall include an
					 option to receive the cash surrender value and an option to receive a paid-up
					 annuity to commence at the maturity date provided in the contract if the
					 contract is not surrendered for cash.
(ii) The contract shall specify the method by
					 which, and the date as of which, the accumulated value of the contract shall be
					 determined and may provide for the deduction therefrom of a surrender charge in
					 arriving at the amount of cash surrender value payable. Such surrender charge
					 shall not be greater than the amount produced by the percentages in the
					 following table, less the premium charge percentage, if any, provided for under
					 the contract:
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8 and Later
8%
8%
7%
6%
5%
4%
3%
0%
(iii) With respect to any additional premium
					 paid under the contract, the insurer may provide for a surrender charge
					 associated with such additional premium, determined as though the contract
					 holder had purchased a separate contract with such additional premium. The
					 contract shall specify whether the surrender charge is applied to the premiums
					 received or the accumulated value or the portion of such amounts associated
					 with a given premium if the contract is premium specific. If the contract is
					 premium specific, the surrender charge shall be applied on a first in, first
					 out basis.
(iv) If the option to
					 receive a paid-up annuity is elected, the accumulated value of the contract in
					 the separate account or accounts of the insurer at the time of default shall,
					 at the option of the contract holder, be transferred to the general account of
					 the insurer to provide a fixed dollar paid-up annuity. Any amounts so
					 transferred may be subject to a deferral as provided in paragraph (4) of this
					 subdivision. The kind and amount of the paid-up annuity and the conditions of
					 its payment shall be in accordance with the provisions of the contract and the
					 purchase rates stipulated therein subject to paragraph (5) of this
					 subdivision;
(4) In
					 connection with a reservation of right to defer cash surrender payments, any
					 individual separate account contract shall provide, if and to the extent
					 permitted or required under the federal Investment Company Act of 1940, as
					 amended, and any other applicable federal or state law, that the insurer
					 reserves the right, at its option, to defer the:
(i) determination and payment of any cash
					 surrender value for a period of six months after demand therefor with surrender
					 of the contract;
(ii) determination
					 and payment of any cash surrender value for a period of nine months in which
					 installments will be paid; or
(iii)
					 payment of any cash surrender value in accordance with the deferment provisions
					 of the federal Investment Company Act of 1940, as amended; and
(5) A provision that the annuity
					 benefits, at the time they are determined, shall not be less than the benefits
					 that would be paid if the accumulated value were used to purchase any single
					 consideration annuity contract then offered by the insurer to the same class of
					 annuitants.