Life Bureau Filing Guidance Note

Guidance Date: 07/17/2008

Filing Guidance on the Change to Section 4223 of the Insurance Law
Effective October 5, 2008 (Equity Index Annuities)

Table of Contents


Section 4223 of the Insurance Law was amended by Chapter 170 of the Laws of 2008 to change the minimum nonforfeiture requirements for equity index annuity contracts subject to Section 4223 and to add specific disclosure requirements.

Filing of Policy Forms for Approval

Submissions of equity index annuity contract form(s) being made to comply with the Section 4223 changes effective October 5, 2008 can be made to the Department at any time. Any submission approved prior to the effective date will be conditioned on the forms not being issued until October 5, 2008.

Important - The submission of Equity Index Annuity forms may NOT be made using the Prior Approval with Certification process outlined in Circular Letter 6 of 2004. However the submission of an Equity Index Annuity contract that identifies itself as such by including in the "Re" of the submission letter "Equity Index Annuity" for paper submission or starts the Filing Description field with "Equity Index Annuity" for SERFF submissions will be given priority treatment.

Submissions may still be made on the "Deemer" basis as set forth in Section 3201(b)(6) of the New York Insurance Law. However, such filings will be handled within the time frames specified by statute.

Section 4223(c)(2)(B)(ii) adjustment to Nonforfeiture Interest Rate

Section 4223(c)(2)(B)(ii) in some circumstances allows for up to 1.00% reduction in the calculation of the guaranteed minimum interest as set forth in Section 4223(c)(2)(F) for equity index annuities. Submissions must include a demonstration satisfactory to the Superintendent that the present value of this additional reduction does not exceed the market value of the benefit. It is recommended that this justification be done separately from all other material. Please note that the inclusion of the demonstration in the memorandum of variable material will render it a part of an approved policy form filing which is considered public information. Companies who wish to request confidentiality for the demonstration will need to so state in their submission letter.

Illustrations & Marketing Material

The Department requests that any Equity Index Annuity submissions include a specimen sales illustration. Marketing material may be requested on a case by case basis. If the product is being sold without a sales illustration, the submission letter should so indicate. While New York has not promulgated a regulation setting forth standards for the illustration of annuity contracts, we would find any misleading sales illustrations of an annuity contract to be objectionable.