Life Bureau Filing Guidance Note
Guidance Date: 08/02/2013
Guidance for Filings Made in Response to the Withdrawal of Supplement No. 1 to Circular Letter 27 (2008) - August 2, 2013
On June 26, 2013, the U.S. Supreme Court, in the case of United States v. Windsor, Executor of the Estate of Spyer (Slip Opinion No. 12-307), struck down section 3 of the federal Defense of Marriage Act as unconstitutional. As a result of that decision, Supplement No. 1 to Circular Letter 27 (2008) (Supplement No. 1) is being withdrawn.
Insurers should no longer provide the disclosure discussed in Supplement No. 1 as such disclosure no longer accurately reflects the current state of the law and has the potential to cause a same-sex spouse to not take advantage of the spousal deferral options to which he or she is now entitled. Also, annuity contracts and certificates should no longer provide different default distribution options based upon whether the beneficiary is a same-sex spouse or an opposite-sex spouse. All spouses must receive the same default distribution.
New Issue of Policy Forms
If the disclosure discussed in Supplement No. 1 was provided in a separate endorsement form, insurers should immediately stop adding the endorsement form to new issue of annuity contracts, certificates and applications. Insurers do not need to make a filing with the Department in order to stop using the endorsement form.
If the disclosure discussed in Supplement No. 1 was included in a contract, certificate or application when approved (as opposed to being provided in a separate endorsement form) and the disclosure was bracketed as variable, insurers should immediately remove the disclosure from the forms for new issue. Insurers do not need to make a filing with the Department in order to remove the variable text. However, if a company intends to use different disclosure rather than just removing the existing disclosure then a revised memorandum of variable material for the previously approved form will need to be submitted to the Life Bureau for approval.
If the disclosure discussed in Supplement No. 1 was included in a contract, certificate or application when approved (as opposed to being provided in a separate endorsement form) and was not bracketed as variable or the policy form provided for different default distribution options depending on whether the beneficiary was a same-sex spouse or an opposite-sex spouse then a revised version of the policy form with a new form number will need to be submitted to the Life Bureau for approval.
Insurers may continue to use previously approved forms for new issue while pursuing approval of new forms but in no event more than 45 days from the date of this guidance. The Life Bureau will review requests for extension of this date on a case-by-case basis.
In-Force Policy Forms
In-force annuity contracts and certificates containing the disclosure discussed in Supplement No. 1 will need to be amended to remove or revise that disclosure. Also, if contracts or certificates have different default distribution options depending on whether the beneficiary is an opposite-sex spouse or a same-sex spouse the endorsement will need to revise the contracts and certificates so that all spouses receive the same default distribution. Such endorsement form must be submitted to the Life Bureau for approval. In-force contracts and certificates should be endorsed within 90 days of the date of this guidance. The Life Bureau will review requests for extension of this date on a case-by-case basis.
Expedited Approval Process
The Circular Letter No. 6 (2004) certified process is available for submissions of new forms, memoranda of variable material and endorsements submitted in response to the withdrawal of Supplement No. 1. However, if an insurer intends to provide new disclosure rather than just removing existing disclosure then the form should be submitted for prior review unless the Life Bureau has reviewed the proposed disclosure and has given permission to use the certified process.
The Life Bureau is also instituting an expedited prior approval process for all filings made as a result of the Department’s withdrawal of Supplement No. If an insurer makes any other changes to the policy forms, then the insurer may not utilize the expedited approval process, and the filing will be processed on a non-priority basis.
Further, all filings must comply with the following procedural requirements:
- The SERFF submission (or for paper filings the “Re” or caption of the submission letter) must comply with Circular Letter No. 8 (1999). In addition, the SERFF filing description (or for paper filings the “Re” or caption of the submission letter) must identify the filing as a “Withdrawal of Supplement No. 1 to CL 27 (2008) submission”.
- If an endorsement is being submitted, the SERFF filing description (or submission letter for paper filings) must identify the previously approved policy forms with which the endorsement will be used by the form number and approval date.
- If revised policy forms are being submitted, the insurer must submit a highlighted copy of the new forms showing the changes or explain the changes in the SERFF filing description (or submission letter for paper filings).
- The filing must include a certification from an authorized officer of the insurer that the insurer has not made any changes to the previously approved forms other than removing/revising the Defense of Marriage Act disclosure or revising default distribution options to treat all spouses equally under the contract or certificate.
For questions about this filing guidance please contact Peter Dumar, Jr., Chief Insurance Attorney, at (518) 474-4552 or by email.