Originally assigned to TAT                                                                                                                                                                                     AS PASSED BY HOUSE

Now FIN-related

ARIZONA STATE SENATE

Fifty-Fifth Legislature, First Regular Session

AMENDED

FACT SHEET FOR S.B. 1495

graduated driver licenses; education program.  

       (NOW: annuity contracts; nonforfeiture; interest rates)

                      As passed by the Senate, S.B. 1495 allowed a person to partially fulfill requirements for a class G driver license application by attending a driver education course offered by a certified defensive driving school or a traffic survival school.

                      The House of Representatives adopted a strike-everything amendment that does the following:

Purpose

                      Reduces, from one percent to fifteen-hundredths of one percent, the minimum nonforfeiture interest rate used in determining an individual deferred annuity nonforfeiture amount.

Background

                      An annuity is an investment contract issued by an insurance company that provides income payments to the annuity holder at specified times, often beginning after retirement. Annuity holders may make single or multiple contributions to their annuity before payments begin. A deferred annuity delays the income payments to the annuity holder until maturity. The minimum nonforfeiture rate is the guaranteed minimum interest rate that an insurance company must credit an annuity contract on an annualized basis.

                      The minimum value of any paid-up annuity, cash surrender or death benefits available under an annuity contract is based on statutorily prescribed minimum nonforfeiture amounts. The interest rate used in determining minimum nonforfeiture amounts is an annual rate determined as the lessor of 3 percent or the Five-year Treasury Constant Maturity Rate reported by the Federal Reserve rounded to the nearest one-twentieth of a percent as specified in the contract which is then reduced by 125 basis points and the resulting interest rate is not less than one percent. The resultant interest rate must apply for an initial period and may be redetermined for additional periods as specified in the contract (A.R.S.   20-1232).

                      There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1.   Reduces, from one percent to fifteen-hundredths of one percent, the minimum nonforfeiture interest rate used in determining an individual deferred annuity nonforfeiture amount.

2.   Makes technical changes.

3.   Becomes effective on the general effective date.

Amendments Adopted by the House of Representatives

  Adopted a strike-everything amendment relating to standard nonforfeiture law for individual deferred annuities.  

House Action

TRANS                   3/24/21           DPA/SE           10-1-1-0

3^rd Read                   5/3/21                                                       31-29-0

Prepared by Senate Research

May 3, 2021

MG/FDR/gs