1 STATE OF OKLAHOMA
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2 1st Session of the 58th Legislature (2021)
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3 SENATE BILL 529 By: Quinn
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6 AS INTRODUCED
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7 An Act relating to life insurance and annuities;
7 amending 36 O.S. 2011, Section 4030.5, which relates
8 to minimum nonforfeiture amounts; modifying
8 calculation of certain interest rate; and providing
9 an effective date.
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12 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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13 SECTION 1. AMENDATORY 36 O.S. 2011, Section 4030.5, is
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14 amended to read as follows:
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15 Section 4030.5. A. The minimum values as specified in Sections
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16 4030.6, 4030.7, 4030.8, 4030.9 and 4030.11 of this title, of any
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17 paid-up annuity, cash surrender or death benefits available under an
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18 annuity contract shall be based upon minimum nonforfeiture amounts
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19 as defined in this section.
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20 B. 1. The minimum nonforfeiture amount at any time at or prior
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21 to the commencement of any annuity payments shall be equal to an
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22 accumulation up to such time at rates of interest as indicated in
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23 subsection C of this section of the net considerations, as
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 1 hereinafter defined, paid prior to such time, decreased by the sum
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2 of:
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3 a. any prior withdrawals from or partial surrenders of
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4 the contract accumulated at rates of interest
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5 indicated in subsection C of this section,
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6 b. an annual contract charge of Fifty Dollars ($50.00),
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7 accumulated at rates of interest indicated in
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8 subsection C of this section,
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9 c. any premium tax paid by the company for the contract,
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10 accumulated at rates of interest indicated in
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11 subsection C of this section, and
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12 d. the amount of any indebtedness to the company on the
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13 contract, including interest due and accrued.
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14 2. The net considerations for a given contract year used to
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15 define the minimum nonforfeiture amount shall be an amount equal to
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16 eighty-seven and one-half percent (87.5%) of the gross
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17 considerations credited to the contract during that contract year.
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18 C. The interest rate used in determining minimum nonforfeiture
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19 amounts shall be an annual rate of interest determined as the lesser
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20 of three percent (3%) per annum and the following, which shall be
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21 specified in the contract if the interest rate will be reset:
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22 1. The five-year Constant Maturity Treasury Rate reported by
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23 the Federal Reserve as of a date, or average over a period, rounded
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24 to the nearest one-twentieth of one percent (1/20 of 1%), specified
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 1 in the contract no longer than fifteen (15) months prior to the
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2 contract issue date or redetermination date under paragraph 4 of
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3 this subsection;
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4 2. Reduced by one hundred twenty-five (125) basis points;
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5 3. If the resulting interest rate is not less than one-
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6 fifteenth of one percent (1/15 of 1%); and
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7 4. The interest rate shall apply for an initial period and may
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8 be redetermined for additional periods. The redetermination date,
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9 basis and period, if any, shall be stated in the contract. The
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10 basis is the date or average over a specified period that produces
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11 the value of the five-year Constant Maturity Treasury Rate to be
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12 used at each redetermination date.
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13 D. During the period or term that a contract provides
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14 substantive participation in an equity indexed benefit, it may
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15 increase the reduction described in paragraph 2 of subsection C of
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16 this section by up to an additional one hundred (100) basis points
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17 to reflect the value of the equity index benefit. The present value
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18 at the contract issue date, and at each redetermination date
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19 thereafter, of the additional reduction shall not exceed the market
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20 value of the benefit. The Commissioner may require a demonstration
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21 that the present value of the additional reduction does not exceed
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22 the market value of the benefit. Lacking such a demonstration that
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23 is acceptable to the Commissioner, the Commissioner may disallow or
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24 limit the additional reduction.
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 1 E. The Commissioner may adopt rules to implement the provisions
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2 of paragraph 4 of subsection C of this section and to provide for
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3 further adjustments to the calculation of minimum nonforfeiture
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4 amounts for contracts that provide substantive participation in an
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5 equity index benefit and for other contracts that the Commissioner
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6 determines are justified.
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7 SECTION 2. This act shall become effective November 1, 2021.
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9 58-1-895 CB 1/20/2021 2:43:50 PM
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