No. 28487 (Second): R590-227. Submission of Annuity Filings

DAR File No.: 28487
Filed: 06/08/2006, 07:22
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The changes to this rule are a result of input received during the last comment period.

 

Summary of the rule or change:

The changes to Sections R590-227-4 and R590-227-6 are being made to comply with national rate and form filing requirements that the state adopted in 2004 in S.B. 162. Now that the required number of states have adopted this regulation it will be implemented. These changes will affect electronic and paper filings. In Section R590-227-4, the definition of "Alternate Information" is being replaced with "Filing Status Information." This is a change in the title only. The changes to Section R590-227-6 are being made to comply with the definitional changes in Section R590-227-4 as they relate to domiciled states. Section R590-227-6 is changed to make the rule enforceable when the rule changes are put into effect. (DAR NOTES: S.B. 162 (2004) is found at Chapter 242, Laws of Utah 2004, and was effective 05/03/2004. (DAR NOTE: This is the second change in proposed rule (CPR) for Rule R590-227. The original proposed amendment upon which the first CPR was based was published in the February 15, 2006, issue of the Utah State Bulletin, on page 8. The first CPR upon which this second CPR is based was published in the April 15, 2006, issue of the Utah State Bulletin, on page 55. Underlining in the rule below indicates text that has been added since the publication of the proposed rule mentioned above; strike-out indicates text that has been deleted. You must view the first CPR, the second CPR, and the proposed amendment together to understand all of the changes that will be enforceable should the agency make this rule effective.)

 

State statutory or constitutional authorization for this rule:

Sections 31A-2-201, 31A-2-201.1, and 31A-2-202

 

Anticipated cost or savings to:

the state budget:

The changes to this rule will have no effect on the state's budget. It will not change the workload of the Insurance Department nor change its revenues.

 

local governments:

This rule has no impact on local governments. It only relates to the relationship between the department and its licensees.

 

other persons:

The changes to this rule clarify definitions and procedures for the filing of annuity policy forms with the department. It will not change the number of filings an insurer will make with the department. Since it will have no fiscal impact on insurers, it will have no impact on their consumers.

 

Compliance costs for affected persons:

The changes to this rule clarify definitions and procedures for the filing of annuity policy forms with the department. It will not change the number of filings an insurer will make with the department. Since it will have no fiscal impact on insurers, it will have no impact on their consumers.

 

Comments by the department head on the fiscal impact the rule may have on businesses:

The changes to this rule will have no fiscal impact on Utah businesses. D. Kent Michie, Commissioner

 

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY UT 84114-1201

 

Direct questions regarding this rule to:

Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [e-mail]

 

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

08/14/2006

 

This rule may become effective on:

08/21/2006

 

Authorized by:

Jilene Whitby, Information Specialist

 

 

RULE TEXT

R590. Insurance, Administration.

R590-227. Submission of Annuity Filings.

 

. . . . . . .

 

R590-227-4. Definitions.

In addition to the definitions of Section 31A-1-301, the following definitions shall apply for the purpose of this rule:

(1) ["Alternate information" means:

(a) a list of the states to which the forms have been filed, with any state actions;

(b) the reason for not submitting the form to the domicile state; and

(c) identifying any points of conflict between the form and domicile state laws or rules.

(2) ]"Certification" means a statement that the filing being submitted is in compliance with Utah laws and rules.

([3]2) "Contract" means the annuity policy including attached endorsements and riders;

([4]3) "Data page" means the page or pages in a contract or certificate that provide the specific data for the annuitant detailing the coverage provided and may be titled by the insurer as contract data page, specifications page, contract schedule, etc.

([5]4) "Discretionary group" means a group that has been specifically authorized by the commissioner under Section 31A-22-509.

([6]5) "Eligible group" means a group that meets the definitions in Sections 31A-22-502 through 31A-22-508.

([7]6) "Endorsement" means a written agreement attached to an annuity contract that alters a provision of the contract, for example, a name change endorsement and a tax qualification endorsement.

([8]7) "File and Use" means a filing can be used, sold, or offered for sale after it has been filed with the department.

([9]8) "Filer" means a person or entity that submits a filing.

([10]9) "Filing," when used as a noun, means an item required to be filed with the department including:

(a) a contract;

(b) a form;

(c) a document;

(d) an application;

(e) a report;

(f) a certificate;

(g) an endorsement;

(h) a rider; and

(i) an actuarial memorandum, demonstration, and certification.

(10) "Filing status information" means a list of the states to which the filing was submitted, the date submitted, and the states' actions, including their responses.

(11) "Issue Ages" means the range of minimum and maximum ages for which a contract or certificate will be issued.

(12) "Letter of Authorization" means a letter signed by an officer of the insurer on whose behalf the filing is submitted that designates filing authority to the filer.

(13) "Market type" means the type of contract that indicates the targeted market such as individual or group.

(14) "Order to Prohibit Use" means an order issued by the commissioner that forbids the use of a filing.

(15) "Rejected" means a filing is:

(a) not submitted in accordance with applicable laws or rules;

(b) returned to the insurer by the department with the reasons for rejection; and

(c) not considered filed with the department.

(16) "Rider" means a written agreement attached to an annuity contract or certificate that adds a benefit, for example, a waiver of surrender charge, a guaranteed minimum withdrawal benefit and a guaranteed minimum income benefit.

(17) "Type of insurance" means a specific type of annuity including, but not limited to, equity indexed annuity, single premium immediate annuity, modified guaranteed annuity, deferred annuity, or variable annuity. Refer to the NAIC Coding Matrix.

 

R590-227-5. General Filing Information.

(1) Each filing document submitted within the filing must be accurate, consistent, and complete. Each filing must contain all required documents in order for the filing to be processed in a timely and efficient manner. The commissioner may request any additional information deemed necessary.

(2) Insurers and filers are responsible for assuring compliance with Utah laws and rules. A filing not in compliance with Utah laws and rules is subject to regulatory action under Section 31A-2-308.

(3) A filing that does not comply with this rule may be rejected and returned to the filer. A rejected filing is not considered filed with the department.

(4) A prior filing will not be researched to determine the purpose of the current filing.

(5) The department does not review or proofread every filing.

(a) Filings may be reviewed:

(i) when submitted;

(ii) as a result of a complaint;

(iii) during a regulatory examination or investigation; or

(iv) at any other time the department deems necessary.

(b) If a filing is reviewed and is found to be not in compliance with Utah laws and rules, an ORDER TO PROHIBIT USE will be issued to the filer. The commissioner may require the filer to disclose deficiencies in forms or rating practices to affected contract holders.

(6) Filing Correction.

(a) No filing transmittal is required when making a correction[s] to a misspelled word[s] and punctuation in a filing. The filing will be considered an informational filing.

(b) No transmittal is required when a clerical correction[s are] is made to a previous filing if submitted within 30 days of the date filed with the department. The filer must reference the original filing or include a copy of the original [cover letter]transmittal.

(c) A new filing is required if [the]a clerical correction[s are]is made more than 30 days after the date filed with the department. The filer must reference the original filing or include a copy of the original [cover letter]transmittal.

(7) [Revised forms. A form that is revised from a previously filed form is considered a new form and must be filed. The filer will need to reference the original filing and explain the changes to the form.

(8) ]Filing withdrawal. A filer must notify the department when withdrawing a previously filed form, rate, or supplementary information.

 

R590-227-6. Filing Submission Requirements.

Filings must be submitted by market type and type of insurance. A filing may not include more than one type of insurance, or request filing for more than one insurer. A complete filing consists of the following documents and submitted in the following order:

(1) Transmittal. Note: Based on the use of the NAIC Transmittal Document, a cover letter is not required. The "NAIC Life, Accident and Health, Annuity, Credit Transmittal Document" must be used. It can be found at www.insurance.utah.gov/LH_Trans.pdf.

(a) COMPLETE THE TRANSMITTAL BY USING THE FOLLOWING:

(i) "NAIC Coding Matrix"

www.insurance.utah.gov/LifeA&H_Matrix.pdf,

(ii) "NAIC" Instruction Sheet"

www.insurance.utah.gov/LH_Trans_Inst.pdf,

(iii) "Life Content Standards"

www.insurance.utah.gov/Life_STM.html.

(iv) Do not submit the documents described in section (a)(i), (ii), and (iii) with a filing.

(b) Filing Description Section. The following information must be included in the Filing Description Section of the NAIC transmittal and must be presented in the order shown below:

(i) Domiciliary Approval and Filing Status Information. Foreign insurers and filers must first submit filings to their domicile state. All filings must include domicile and filing status information.

(A) If a filing was submitted to the domicile state, provide a stamped copy of the approval letter from the domicile state for the exact same filing; and[.]

(B) If a filing was not submitted to the domicile state, or the domicile state did not provide specific approval for the filing, then the following alternate filing status information must be provided:

(I) a list of the states to which the filing was submitted;

(II) the date submitted;

(III) the states' actions and their responses.

(C) If the filing is specific to Utah and only filed in Utah, then Section 14 of the transmittal must be completed stating, "UTAH SPECIFIC - NOT SUBMITTED TO ANY OTHER STATE."

(ii) Marketing Facts.

(A) List the issue ages.

(B) List the minimum initial premium.

(C) Identify the intended market for the filing, such as senior citizens, nonprofit organizations, association members, including any particular tax qualified market and the federal law under which the contract will be marketed.

(D) Describe the marketing and advertising in detail, i.e. individually solicited through licensed producers, marketed through a marketing association, financial institutions, Internet, or telemarketing.

(iii) Description of Filing.

(A) Provide a detailed description of the purpose of the filing.

(B) Describe the benefits and features of each form in the filing including specific features and options, including nonforfeiture options.

(C) Identify any new, unusual, or controversial provisions.

(D) Identify any unresolved previously prohibited provisions and explain why the provisions are included in the filing.

(E) Explain any changes in benefits, charges, terms, premiums, or other provisions that may occur while the contract is in force.

(F) If the filing is replacing or modifying a previous submission, provide information that identifies the filing being replaced or modified, the Utah filed date, and a detailed description of the changes and highlight the changed provisions.

(G) If the filing includes forms for informational purposes, provide the dates the forms were filed.

(H) If filing an application, rider, or endorsement, and the filing does not contain a contract, identify the affected contract form number, the Utah filed date, and describe the effect of the submitted forms on the base contract.

(iv) Underwriting Methods. Provide a general explanation of the underwriting applicable to this filing.

(2) Certification. In addition to completing the certification on the NAIC transmittal, the filer must complete and submit the "Utah Annuity Filing Certification". A filing will be rejected if the certification is missing or incomplete. A certification that is inaccurate may subject the filer to administrative action.

(3) Group Questionnaire or Discretionary Group Authorization Letter. All group filings must identify each type of group, and include either a completed "Utah Life and Annuity Group Questionnaire", or copy of the "Utah Life and Annuity Discretionary Group Authorization letter".

(4) Letter of Authorization. If the filer is not the insurer, a letter of authorization from the insurer must be included. The insurer remains responsible for the filing being in compliance with Utah laws and rules.

(5) Statement of Variability. Any item or provision on the data page or within the form that is variable must be contained within the brackets. List the ranges of variable items or factors within the brackets. Each variable item must be identified and explained in a statement of variability. If the information contained within the brackets changes, the form must be refiled.

(6) Items being submitted for filing. Refer to each applicable subsection of this rule for general procedures and additional procedures on how to submit forms and reports.

(7) Annuity Report. All annuity filings must include a sample annuity annual report.

(8) Actuarial Memorandum, Demonstration, and Certification of Compliance. An actuarial memorandum, demonstration, and a certification of compliance are required in annuity filings. The memorandum must be currently dated and signed by the actuary. The memorandum must include:

(a) description of the coverage in detail;

(b) demonstration of compliance with applicable nonforfeiture and valuation laws; and

(c) a certification of compliance with Utah law.

(9) Return Notification Materials.

(a) Return notification materials are limited to:

(i) a copy of the transmittal; and

(ii) a self-addressed, stamped envelope.

(b) Notice of filing will not be provided unless return notification materials are submitted.

 

. . . . . . .

 

R590-227-14. Enforcement Date.

The commissioner will begin enforcing the revised provisions of this rule [June 1, 2006]upon the effective date of this.

 

KEY: annuity insurance filings

Date of Enactment or Last Substantive Amendment: 2006

Authorizing, and Implemented or Interpreted Law: 31A-2-201; 31A-2-201.1; 31A-2-202