With some of the legislative sessions winding down, now is a good time to assess changes that need to be accounted for in the annuity business. From annuity disclosures to replacement requirements, and a variety of developments in between, legislative activity across the country continues to impact the life insurance industry.
From around the states
Looking first at annuity disclosures updates, the Iowa Insurance Division (IID) provides guidance in its Bulletin 13-01, issued April 3, to life insurers regarding state standards for the disclosure of certain minimum information to consumers considering the purchase of annuity contracts. The IID addresses issues for both insurers and producers concerning the annuity disclosure rules (191 IAC 15.61-15.69), which became effective on April 11, 2012 and applied to certain annuities issued after January 1. The bulletin details and clarifies requirements on multiple topics including:
- Buyer's Guide
- Content of disclosure documents
- Standards for annuity illustrations
- Use of illustrations
- Delivery requirements
- Tracking of values for each crediting method
- Allocations to more than one account
- Hypothetical generic examples
- Surrender value
- Portrayal of periodic income options
- Use of Internet materials
- Account value vs. index value; and
- Modal premiums
Recent legislative and regulatory developments addressing same sex marriage also present changes for insurers to address. Rhode Island's Bulletin 2013-2 provides additional information on that state's same sex marriage statutory provisions that become effective August 1. As current civil unions will no longer be available after that date, the Department of Business Regulation indicates that it plans to amend existing Insurance Regulation 118 on civil unions to reflect the new statutory provisions for same sex marriages. The Department further directs that "all new form filings to be effective on or after August 1, 2013 shall include same sex marriage within the definition of 'spouse' or 'marriage' in accordance with the law." Minnesota's HF 1054 (2013), also effective August 1, amends 517.01 to read: "A civil marriage, so far as its validity in law is concerned, is a civil contract between two persons, to which the consent of the parties, capable in law of contracting, is essential."
Product filers also witnessed some changes so far this year. These 2013 sessions have produced three additional states joining the Interstate Insurance Product Regulation Compact. Arkansas and Montana enacted bills earlier this year, while the Florida governor signed HB 383 into law on June 7, all with varying effective dates.
Model 275
