Oklahoma § 36-4030.5 - Minimum nonforfeiture amounts

§ 36-4030.5. Minimum nonforfeiture amounts

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

accumulation up to such 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 at 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,

Oklahoma Statutes - Title 36. Insurance

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:

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 fifteen onehundredths 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 additional 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. The Commissioner may require a demonstration

that the present value of the additional reduction does not exceed

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 substantive participation in an

equity index benefit and for other contracts that the Commissioner

determines are justified.

Oklahoma Statutes - Title 36. Insurance

Added by Laws 2000, c. 353, § 19, eff. Nov. 1, 2000. Amended by

Laws 2002, c. 307, § 30, eff. Nov. 1, 2002; Laws 2004, c. 274, § 14,

eff. July 1, 2004; Laws 2021, c. 360, § 1, eff. Nov. 1, 2021.