Ala. Code § 27-15-28.2 (1975) Standard Nonforfeiture Law For Individual Deferred Annuities - Annuity Contracts Issued After June 30, 2006, Or By Election Under This Section Until June 30, 2006

• Library: Alabama Statutes
• Edition: 2023
• Currency: Current with legislation from the 2023 Regular and Special Sessions.
• Year: 2023
• Citation: Ala. Code § 27-15-28.2 (1975)

(a) This section shall be known as the standard nonforfeiture law for individual deferred annuities.

(b)

(1) This section shall not apply to any reinsurance group annuity purchased under a retirement plan or plan of deferred compensation established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408 of the Internal Revenue Code, as now or hereafter amended, premium deposit fund, variable annuity, investment annuity, immediate annuity, any deferred annuity contract after annuity payments have commenced or reversionary annuity, nor to any contract which shall be delivered outside this state through an agent or other representative of the company issuing the contract.

(2) Subsections (c) through (h) shall not apply to contingent deferred annuities.

(3) Notwithstanding subdivision (2), the commissioner may adopt by rule nonforfeiture benefits for contingent deferred annuities that, in the opinion of the commissioner, are equitable to the policy holder, appropriate given the risks insured, and to the extent possible, consistent with the general intent of this section.

(c)

(1) In the case of contracts issued on or after the operative date of this section as defined in subsection (l) no contract of annuity, except as stated in subsection (b), shall be delivered or issued for delivery in this state unless it contains in substance the following provisions, or corresponding provisions which in the opinion of the commissioner are at least as favorable to the contract holder, upon cessation of payment of considerations under the contract:

a. That upon cessation of payment of considerations under a contract, or upon the written request of the contract owner, the company shall grant a paid-up annuity benefit on a plan stipulated in the contract of such value as is specified in subsections (e), (f), (g), (h), and (j).

b. If a contract provides for a lump sum settlement at maturity, or at any other time, that upon surrender of the contract at or prior to the commencement of any annuity payments, the company shall pay in lieu of any paid-up annuity benefit a cash surrender benefit of such amount as is specified in subsections (e), (f), (h), and (j). The company may reserve the right to defer the payment of such cash surrender benefit for a period not to exceed six months after demand therefor with surrender of the contract after making written request and receiving written approval of the commissioner. The request shall address the necessity and equitability to all policyholders of the deferral.