California Senate Bill SB426 Introduced / Bill

 BILL NUMBER: SB 426INTRODUCED BILL TEXT INTRODUCED BY Senator Leyva FEBRUARY 25, 2015 An act to amend Section 10168.4 of the Insurance Code, relating to annuities. LEGISLATIVE COUNSEL'S DIGEST SB 426, as introduced, Leyva. Annuities: cash surrender benefits. Existing law governs annuities and, for those insurance contracts that provide cash surrender benefits, prescribes the cash surrender benefit available prior to maturity. Existing law also requires the death benefit under these contracts to be at least equal to the cash surrender benefit. This bill would instead require the death benefit payable under contracts issued to persons 65 years of age or older to be at least equal to the annuity value or accumulation value without any surrender charges or penalties upon death. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 10168.4 of the Insurance Code is amended to read: 10168.4. For contracts which provide cash surrender benefits,  such   the  cash surrender benefits available prior to maturity shall not be less than the present value as of the date of surrender of that portion of the maturity value of the paid-up annuity benefit which would be provided under the contract at maturity arising from considerations paid prior to the time of cash surrender reduced by the amount appropriate to reflect any prior withdrawals from or partial surrenders of the contract,  such   the  present value being calculated on the basis of an interest rate not more than 1 percent higher than the interest rate specified in the contract for accumulating the net considerations to determine  such   the  maturity value, decreased by the amount of any indebtedness to the company on the contract, including interest due and accrued, and increased by any existing additional amounts credited by the company to the contract.  In no event shall any   The  cash surrender benefit  shall not  be less than the minimum nonforfeiture amount at that time. The death benefit under  such   these contracts shall be at least equal to the cash surrender  benefit.   benefit, except that the death benefit payable under contracts issued to persons 65 years of age or older shall be at least equal to the annuity value or accumulation value without any surrender charges or penalties upon death.