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 › Section 50.6 - Variable annuity contracts

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Every
				  variable annuity contract shall be subject to the following provisions:
(1) Each variable annuity contract delivered
				  or issued for delivery in this State shall provide that neither expenses
				  actually incurred, other than taxes on the investment return, nor mortality
				  actually experienced, shall adversely affect the dollar amount of variable
				  annuity payments to any annuitant for whom variable annuity payments have
				  commenced. Where a group variable annuity contract provides that the scale of
				  charges to be made against the assets of a separate account may be changed
				  without the consent of the participants for whom variable annuity payments have
				  commenced, the contract shall provide that such changes may not adversely
				  affect the dollar amount of variable annuity payments which have commenced. The
				  method of computing the dollar amount of variable annuity payments shall be
				  such that, if the annual rate of investment return of the separate account, as
				  defined in section
				  50.1(a)(6) 
				  of this Part, were six and one-half percent at all times from the issue of the
				  contract, such amounts would not decrease. The superintendent may authorize the
				  use of other methods or rates in computing the dollar amount of variable
				  annuity payments where such methods or rates are determined by the
				  superintendent to be fair, equitable, reasonable and not less favorable to
				  participants or annuitants.
(2) The
				  reserve liability for variable annuities shall be established in compliance
				  with the applicable provisions of section 4217  of the Insurance Law, as amended, and
				  in accordance with actuarial procedures that recognize the variable nature of
				  the benefits provided and their dependence on the net investment return of the
				  separate account or accounts. With respect to individual variable annuities,
				  the mortality table used in calculating the reserve liability shall be:
(i) the annuity table for 1949 with
				  projection scale B; or
(ii) the
				  progressive annuity table applicable to persons born in 1900, adjusted by a
				  setback of one year of age for each complete 25 years by which the year of
				  birth is later than 1900, and a set-forward of one year with respect to lives
				  born before 1900; or
(iii) any
				  other table approved by the superintendent. With respect to group variable
				  annuities, the mortality table used in calculating the reserve liability shall
				  be:
(a) the group annuity mortality table for
				  1951, projected to the year of retirement, using projection scale C;
				  or
(b) any other table approved by
				  the superintendent. In determining the valuation factors for group variable
				  annuities, a five-year grouping of calendar years of retirement may be
				  used.
(3)
				  Except as otherwise permitted by the superintendent, each authorized insurance
				  company issuing variable annuity contracts shall accumulate an annuitant
				  mortality fluctuation fund or funds over and above the required contract
				  reserves and liabilities, pursuant to a plan for such accumulation which
				  specifies reasonable maximum targets for such fund or funds and is approved by
				  the superintendent as otherwise reasonable. Losses arising from mortality
				  actually experienced shall first be charged against such mortality fluctuation
				  fund or funds until such fund or funds are exhausted and shall then be charged
				  against the special contingent reserve fund.