New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 46 - SYNTHETIC GUARANTEED INVESTMENT CONTRACT FORMS › Section 11:4-46.2 - Definitions

Current through Register Vol. 56, No. 14, July 15, 2024
The following words and terms, as used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:
"Commissioner" means the Commissioner of the New Jersey Department of Banking and Insurance.
"Contract value record" means an accounting record established pursuant to the contract in relation to the portfolio of assets which is credited with a fixed rate of return over regular periods. The contract value record is used to measure the extent of the insurer's obligations to the contractholder.
"Crediting rate" means either:
1. A specified rate; or
2. A rate determined using a mathematical formula that calculates the fixed rate of return credited to the contract value record during any rate period, based upon:
i. The yield on the assets held in the segregated portfolio or an alternative benchmark portfolio; and
ii. The difference between the contract value record and the market value record amortized over a period of time related to the average duration of the assets held in the segregated portfolio, or an alternative benchmark against which the assets are managed.
"Custodian" means a bank, trust company or other duly licensed fiduciary services provider.
"Department" means the New Jersey Department of Banking and Insurance.
"Insurer" means a life insurance or annuity company operating pursuant to N.J.S.A. 17B:1-1 et seq. and additionally qualified pursuant to 17B:28-2 to issue separate account contracts.
"Investment guidelines" means the set of written criteria established by the contractholder setting forth the portfolio characteristics and constraints within which the investment manager may invest and reinvest the assets within the segregated portfolio.
"Investment manager" means the entity appointed to manage the segregated portfolio in accordance with the investment guidelines. The investment manager shall be:
1. An entity, including, but not limited to, the insurer offering the synthetic guaranteed investment contract, that is registered as an investment adviser under the Investment Advisers Act of 1940 ( 15 U.S.C. §§
										80b-1 et seq.) or any similar statute that may be enacted in substitution therefor; or
2. An entity, including, but not limited to, any bank, that lawfully may perform the functions of an investment adviser as defined under the Investment Advisers Act of 1940 or any similar statute that may be enacted in substitution therefor, but that is exempt from registration under such statute.
"Market value record" means an accounting record established by the contract in relation to the market value of the portfolio of assets and expressed as the sum of:
1. The aggregate of the prices at which the publicly traded assets held in the segregated portfolio are traded as of any valuation date, or in the case of any asset for which no such price is available (including private placement securities), a price that appropriately reflects its fair market value; plus
2. Any related cash or cash equivalents held in the segregated portfolio.
"Rate period" means the period of time during which the fixed rate of return credited to the contract value record is applicable between crediting rate formula adjustments.
"Separate account contract" is a contract as defined at 17B:28-1.
"Segregated portfolio" means a portfolio of assets to which the contract pertains that is held in a custody or trust account by a custodian and identified on the records of such custodian as special custody assets held for the exclusive benefit of the entities on whose behalf the contractholder holds the contract, and any related cash or cash equivalents received by the custodian for the account of the contractholder and held in a deposit account, cash management account or fund for the exclusive benefit of the entities on whose behalf the contractholder holds the contract.
"Synthetic guaranteed investment contract" or "contract" means a group annuity contract or other agreement that establishes the insurer's payment obligations by reference to a portfolio of assets neither owned by nor in the possession of the insurer.