§ 27-4.4-3 - Nonforfeiture requirements.
SECTION 27-4.4-3
§ 27-4.4-3 Nonforfeiture requirements.– (a) In the case of contracts issued on or after July 7, 2004, no contract ofannuity, except as stated in § 27-4.4-2, shall be delivered or issued fordelivery in this state unless it contains in substance the followingprovisions, or corresponding provisions which in the opinion of thecommissioner of insurance are at least as favorable to the contract holder,upon cessation of payment of considerations under the contract:
(1) That upon cessation of payment of considerations undercontract, or upon written request of the contract owner, the company shallgrant a paid-up annuity benefit on a plan stipulated in the contract of suchvalue as is specified in §§ 27-4.4-5 – 27-4.4-8 and 27-4.4-10;
(2) If a contract provides for a lump sum settlement atmaturity, or at any other time, that upon surrender of the contract at or priorto the commencement of any annuity payments, the company shall pay in lieu ofany paid up annuity benefit a cash surrender benefit of such amount as isspecified in §§ 27-4.4-5, 27-4.4-6, 27-4.4-8 and 27-4.4-10. Thecompany may reserve the right to defer the payment of the cash surrenderbenefit for a period not to exceed six (6) months after demand therefore withsurrender of the contract after making a written request and receiving writtenapproval of the commissioner. The request shall address the necessity andequitability to all policyholders of the deferral;
(3) A statement of the mortality table, if any, and interestrates used in calculating any minimum paid up annuity, cash surrender, or deathbenefits that are guaranteed under the contract, together with sufficientinformation to determine the amounts of the benefits; and
(4) A statement that any paid-up annuity, cash surrender, ordeath benefits that may be available under the contract are not less than theminimum benefits required by any statute of the state in which the contract isdelivered and an explanation of the manner in which the benefits are altered bythe existence of any additional amounts credited by the company to thecontract, any indebtedness to the company on the contract, or any priorwithdrawals from or partial surrenders of the contract.
(b) Notwithstanding the requirements of this section, anydeferred annuity contract may provide that if no considerations have beenreceived under a contract for a period of two (2) full years and the portion ofthe paid-up annuity benefit at maturity on the plan stipulated in the contractarising from considerations paid prior to the period would be less than twentydollars ($20.00) monthly, the company may at its option terminate the contractby payment in cash of the then present value of the portion of the paid upannuity benefit, calculated on the basis on the mortality table, if any, andinterest rate specified in the contract for determining the paid-up annuitybenefit, and by the payment shall be relieved of any further obligation underthe contract.