56-7-112 - Deferred individual annuity contracts Minimum guaranteed surrender value.
56-7-112. Deferred individual annuity contracts Minimum guaranteed surrender value.
Deferred individual annuity contracts, except variable annuity contracts as provided for in chapter 3, part 5 of this title, filed for approval after July 1, 1976, or issued after July 1, 1977, must provide upon surrender of the contract guaranteed values in the form of a cash value or paid up annuity that are equal to or greater than the following minimum standards:
(1) In the case of contracts providing level premiums or considerations, the minimum cash value shall not be less than fifty percent (50%) of the annual premium or consideration in the first policy year, plus eighty-five percent (85%) of the premiums or considerations for the second to the tenth policy years inclusive, plus ninety percent (90%) of the premiums or considerations after the tenth policy year, all accumulated at not less than three percent (3%) interest. The annual premiums to be accumulated may be diminished by a policy fee not greater than twenty dollars ($20.00) per year;
(2) In the case of contracts providing premiums or considerations that may vary in amount, the minimum values shall be determined according to the same principles as described in subdivision (1), the cash value attributable to an increase in premium or consideration being computed on the basis of fifty percent (50%) of the excess of the premium or consideration over the largest premium or consideration paid in any prior contract year;
(3) In the case of a single premium policy, the minimum cash value shall be equal to at least ninety percent (90%) of the single premium or consideration accumulated at not less than three percent (3%) interest; and
(4) The contract shall provide that the company shall reserve the right to defer payment of the cash values for six (6) months after application for payment is made.
[Acts 1976, ch. 546, § 1; T.C.A., § 56-1171.]