South Dakota House Bill HB1117

South Dakota 2022 Regular Session

• Introduced: 1/24/22
• Refer: 1/24/22
• Report Pass: 1/31/22
• Engrossed: 2/1/22
• Refer: 2/2/22
• Report Pass: 3/3/22
• Enrolled: 3/7/22
• Passed: 3/28/22

Caption

Revise a certain provision regarding standard nonforfeiture amounts for individual deferred annuities.

Impact

If enacted, this bill could significantly impact how insurance companies manage their annuity products, particularly in relation to consumers' rights to withdraw or access funds without penalties. The revisions aim to ensure that consumers receive a fair and transparent value for their contracts, which may enhance consumer protection within the state. Additionally, these changes could affect the financial forecasting and stability of insurance providers, making compliance with state regulations more straightforward.

Summary

House Bill 1117 seeks to revise provisions regarding standard nonforfeiture amounts for individual deferred annuities in the state of South Dakota. The bill amends section 58-15-85 to establish a more clear framework for calculating the minimum nonforfeiture amounts owed under annuity contracts. The introduced changes include specifying how interest rates are determined, capping it at a maximum of three percent, and outlining adjustments based on the five-year constant maturity treasury rate, providing clarity and stability for both insurers and consumers in the annuity market.

Sentiment

The sentiment surrounding the bill appears to be generally positive, with supporters highlighting its potential to enhance consumer protections in the annuity market. By clarifying the calculation of nonforfeiture values, the legislation is viewed as a step towards more robust financial security for individuals entering into annuity contracts. However, there may be concerns regarding the adaptability of insurance companies to these adjustments and how they might affect their product offerings in the market.

Contention

Notable points of contention could arise from the intricacies of implementing these amendments, particularly regarding how insurance companies adjust their policies and terms in light of the new regulations. Insurers may express anxiety over the potential for increased operational burdens or reduced flexibility in product offerings as a result of stricter standards. Nonetheless, the bill passed unanimously in the legislative vote, reflecting a consensus on the necessity of improving annuity regulations to protect consumers.