House Journal: Page 895: Monday, March 31, 2003
47 surrender, or death benefits available under an
48 annuity contract shall be based upon minimum
49 nonforfeiture amounts as defined in this section.
50 a. The minimum nonforfeiture amount at any time at
Page 2
1 or prior to the commencement of any annuity payments
2 shall be equal to an accumulation up to such time at
3 rates of interest as indicated in paragraph "b" of the
4 net considerations (as hereinafter defined) paid prior
5 to such time, decreased by the sum of all of the
6 following:
7 (1) Any prior withdrawals from or partial
8 surrenders of the contract accumulated at rates of
9 interest as indicated in paragraph "b".
10 (2) An annual contract charge of fifty dollars,
11 accumulated at rates of interest as indicated in
12 paragraph "b".
13 (3) The amount of any indebtedness to the company
14 on the contract, including interest due and accrued.
15 The net considerations for a given contract year
16 used to define the minimum nonforfeiture amount shall
17 be an amount equal to eighty-seven and one-half
18 percent of the gross considerations credited to the
19 contract during the contract year.
20 b. The interest rate used in determining minimum
21 nonforfeiture amounts shall be an annual rate of
22 interest determined as the lesser of three percent per
23 annum and all of the following, which shall be
24 specified in the contract if the interest rate will be
25 reset:
26 (1) The five-year constant maturity treasury rate
27 reported by the federal reserve as of a date, or
28 average over a period, rounded to the nearest one-
29 twentieth of one percent, specified in the contract no
30 longer than fifteen months prior to the contract issue
31 date or redetermination date under subparagraph (4).
32 (2) The result of subparagraph (1) shall be
33 reduced by one hundred twenty-five basis points.
34 (3) The resulting interest guarantee shall not be
35 less than one percent.
36 (4) The interest rate shall apply for an initial
37 period and may be redetermined for additional periods.
38 The redetermination date, basis, and period, if any,
39 shall be stated in the contract. The basis is the
40 date or average over a specified period that produces
41 the value of the five-year constant maturity treasury
42 rate to be used at each redetermination date.
43 During the period or term that a contract provides
44 substantive participation in an equity indexed
45 benefit, it may increase the reduction described in
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League of Women Voters of Iowa
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