Weekly Tip: Amendments to the Core Standards for Individual Deferred Variable Annuity Standards

 

Weekly Tips

Amendments to the Core Standards for Individual Deferred Variable Annuity Standards

4/08/2015

During phase 2, 3, and 4 of the five-year review, the Insurance Compact made clarification amendments to the Core Standards for Individual Deferred Variable Annuity Standards and two amendments to the Individual Immediate Variable Annuity Standards. In this week’s Weekly Tip, we will focus on these amendments. 

The Product Standards Committee recommended clarification of the variable annuity standards to incorporate the information found in Filing Information Notice 2011-1. Amendments include specifying in the definition of “Account Value” that fixed interest options are a part of the general account and the investment performance of separate accounts must be allocated directly to the benefit option through unit-linked contract values.  The Product Standards Committee also recommended adding a required statement to the Additional Submission Requirements that the separate accounts comply with the requirements of the State of Domicile and adding a statement to the Contract Provisions for Separate Accounts requiring, when applicable, that the contract shall include a provision that the domiciliary state requires the separate accounts to be insulated.  Section 3. Contact Provisions (X)(2) has been amended to read:

The contract may contain a provision stating that the portion of assets of a separate account equal to the reserves and other contract liabilities with respect to the account shall not be charged with liabilities arising out of any other business the company may conduct. If the company’s domiciliary state requires separate accounts to be insulated, the contract shall include this provision.

If you have any questions regarding the amendments to the Core Standards for Individual Deferred Variable Annuity Standards and two amendments to the Individual Immediate Variable Annuity Standards or this Weekly Tip, please reach out to Karen Givens.  If you have any questions regarding the Insurance Compact, please contact the Office.