Utah Admin. Code R590-227-7 - Additional Procedures for Fixed Annuity Filings

(1) An insurer filing an annuity form shall comply with:

(a) Title 31A, Chapter 21, Contracts in General;

(b) Title 31A, Chapter 22, Part 4, Life Insurance and Annuities;

(c) Rule R590-93;

(d) Rule R590-96; and

(e) Rule R590-191.

(2) A filing of an annuity contract, rider, or endorsement shall include an actuarial memorandum that demonstrates compliance with Section 31A-22-409.

(3) Actuarial Memorandum.

(a) An actuarial memorandum shall be included in each fixed annuity contract filing;

(b) The actuarial memorandum shall:

(i) identify the specific subsections of the Utah nonforfeiture law that apply to the submitted annuity;

(ii) describe each contract provision in detail including any guaranteed and non-guaranteed elements that affect the value;

(iii) identify the guaranteed minimum interest crediting rate;

(iv) describe the methods of crediting interest, including:

(A) guaranteed fixed interest rates; and

(B) guaranteed interest terms;

(v) identify and describe each charge and fee, including loads, surrender charges, market value adjustments, or any other adjustment feature;

(vi) describe each account and factor used to calculate guaranteed minimum nonforfeiture values and minimum cash surrender values in the contract and the elements used in the calculation of the minimum values; and

(vii) include each formula used to calculate the minimum guaranteed values provided by the contract and each formula used to calculate the minimum guaranteed values required by nonforfeiture law.

(c) The actuarial memorandum shall include a demonstration of compliance with nonforfeiture law that shall:

(i) compare a minimum contract value with a minimum nonforfeiture value;

(ii) be based on a representative premium pattern and show values for:

(A) issue age 35 and age 60; and

(B) flexible premium contract, for a single premium and for a level premium; and

(iii) numerically demonstrate that the values based on the guaranteed minimum interest rate, the maximum surrender charges, fees, loads, and any other factor affecting the value, provide values that are in compliance with the Standard Nonforfeiture Law using both the retrospective and the prospective tests.

(d) The actuarial memorandum shall clearly identify the tests in Subsection (3)(c)(iii) and shall include the following:

(i) for the retrospective test:

(A) describe the net consideration and the interest rates used for the accumulation; and

(B) numerically compare the guaranteed contract values with the minimum values required by the nonforfeiture law; and

(ii) for the prospective test:

(A) identify the maturity value and the interest rate used for each respective year to determine the present value; and

(B) numerically compare the guaranteed contract values with the minimum values required by the nonforfeiture law.

(e) The actuarial memorandum shall include:

(i) a certification of compliance with applicable nonforfeiture and valuation laws by a qualified actuary;

(ii) a confirmation that the formulas used and values provided are compliant.

Notes

Utah Admin. Code R590-227-7

Adopted by Utah State Bulletin Number 2023-09, effective 4/21/2023