SB529 HFLR Page 1
BOLD FACE denotes Committee Amendments. 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
ENGROSSED SENATE
BILL NO. 529 By: Quinn of the Senate
and
Mize of the House
An Act relating to life insurance and annuities;
amending 36 O.S. 2011, Section 4030.5, which relates
to minimum nonforfeiture amounts; modifying
calculation of certain interest rate; and providing
an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2011, Section 4030.5, is
amended to read as follows:
Section 4030.5. A. The minimum values as specified in Sections
4030.6, 4030.7, 4030.8, 4030.9 and 4030.11 of this title, of any
paid-up annuity, cash surrender or death benefits available under an
annuity contract shall be based upon minimum nonforfeiture amounts
as defined in this section.
B. 1. The minimum nonforfeiture amount at any time at or prior
to the commencement of any annuity payments shall be equal to an
SB529 HFLR Page 2
BOLD FACE denotes Committee Amendments. 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
accumulation up to su ch time at rates of interest as indicated in
subsection C of this section of the net considerations, as
hereinafter defined, paid prior to such time, decreased by the sum
of:
a. any prior withdrawals from or partial surrenders of
the contract accumulated a t rates of interest
indicated in subsection C of this section,
b. an annual contract charge of Fifty Dollars ($50.00),
accumulated at rates of interest indicated in
subsection C of this section,
c. any premium tax paid by the company for the contract,
accumulated at rates of interest indicated in
subsection C of this section, and
d. the amount of any indebtedness to the company on the
contract, including interest due and accrued.
2. The net considerations for a given contract year used to
define the minimum nonforfeiture amount shall be an amount equal to
eighty-seven and one-half percent (87.5%) of the gross
considerations credited to the contract during that contract year.
C. The interest rate used in determining minimum nonforfeiture
amounts shall be an annual rate of interest determined as the lesser
of three percent (3%) per annum and the following, which shall be
specified in the contract if the interest rate will be reset:
SB529 HFLR Page 3
BOLD FACE denotes Committee Amendments. 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1. The five-year Constant Maturity Treasury Rate reported by
the Federal Reserve as of a date, or average over a period, rounded
to the nearest one-twentieth of one percent (1/20 of 1%), specified
in the contract no longer than fifteen (15) months prior to the
contract issue date or redetermination date under paragraph 4 of
this subsection;
2. Reduced by one hundred twenty -five (125) basis points;
3. If the resulting interest rate is not less than one percent
(1%) fifteen one-hundredths of one percent (.15%) ; and
4. The interest rate shall apply for an initial period and may
be redetermined for additional periods. The redetermination date,
basis and period, if any, shall be stated in the contract. The
basis is the date or average over a specified period that produces
the value of the five -year Constant Maturity Treasury Rate to be
used at each redetermination date.
D. During the period or term that a contract provides
substantive participation in an equity indexed benefit, it may
increase the reduction described in paragraph 2 of subsection C of
this section by up to an addition al one hundred (100) basis points
to reflect the value of the equity index benefit. The present value
at the contract issue date, and at each redetermination date
thereafter, of the additional reduction shall not exceed the market
value of the benefit. T he Commissioner may require a demonstration
that the present value of the additional reduction does not exceed
SB529 HFLR Page 4
BOLD FACE denotes Committee Amendments. 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
the market value of the benefit. Lacking such a demonstration that
is acceptable to the Commissioner, the Commissioner may disallow or
limit the additional reduction.
E. The Commissioner may adopt rules to implement the provisions
of paragraph 4 of subsection C of this section and to provide for
further adjustments to the calculation of minimum nonforfeiture
amounts for contracts that provide sub stantive participation in an
equity index benefit and for other contracts that the Commissioner
determines are justified.
SECTION 2. This act shall become effective November 1, 2021.
COMMITTEE REPORT BY: COMMITTEE ON INSURANCE, dated 04/0 7/2021 - DO
PASS.