R590-229-7. Standards for the Disclosure Document and Buyer's Guide

  (1)(a) Where the application for an annuity contract is taken in a face-to-face meeting, the applicant shall, at or before the time of application, be given both the disclosure document described in Subsection 7(2) of this section and the appropriate Buyer's Guide, as described in Section 6.

  (b) Where the application for an annuity contract is taken by means other than in a face-to-face meeting, the applicant shall be sent both the disclosure document and the appropriate Buyer's Guide no later than five business days after the completed application is received by the insurer.

  (i) With respect to an application received as a result of a direct solicitation through the mail:

  (A) providing a Buyer's Guide in a mailing inviting prospective applicants to apply for an annuity contract shall be deemed to satisfy the requirement that the appropriate Buyer's Guide be provided no later than five business days after receipt of the application; and

  (B) providing a disclosure document in a mailing inviting a prospective applicant to apply for an annuity contract shall be deemed to satisfy the requirement that the disclosure document be provided no later than five business days after receipt of the application.

  (ii) With respect to an application received via the Internet:

  (A) taking reasonable steps to make the appropriate Buyer's Guide available for viewing and printing on the insurer's website shall be deemed to satisfy the requirement that the appropriate Buyer's Guide be provided no later than five business days of receipt of the application; and

  (B) taking reasonable steps to make the disclosure document available for viewing and printing on the insurer's website shall be deemed to satisfy the requirement that the disclosure document be provided no later than five business days after receipt of the application.

  (c) A solicitation for an annuity contract provided in other than a face-to-face meeting shall include a statement that the prospective applicant can obtain from the insurer a free annuity Buyer's Guide upon request.

  (2) At a minimum, the following information shall be included in the disclosure document required to be provided under this rule:

  (a) the generic name of the contract, the company product name, if different, the form number, and the fact that it is an annuity;

  (b) the insurer's name and address;

  (c) a description of the contract and its benefits, emphasizing its long-term nature, including examples where appropriate of:

  (i) the guaranteed, non-guaranteed and determinable elements of the contract, and their limitations, if any, and an explanation of how they operate;

  (ii) an explanation of the initial crediting rate, specifying any bonus or introductory portion, the duration of the rate and the fact that rates may change from time to time and are not guaranteed;

  (iii) periodic income options, both on a guaranteed and non-guaranteed basis;

  (iv) any value reductions caused by withdrawals from or surrender of the contract;

  (v) how values in the contract can be accessed;

  (vi) the death benefit, if available, and how it will be calculated;

  (vii) a summary of the federal tax status of the contract and any penalties applicable on withdrawal of values from the contract; and

  (viii) impact of any rider, such as a long-term care rider;

  (d) specific dollar amount or percentage charges and fees shall be listed with an explanation of how they apply; and

  (e) information about the current guaranteed rate for a new contract that contains a clear notice that the rate is subject to change.

  (3) An insurer shall define terms used in the disclosure statement in language that facilitates the understanding by a typical person within the segment of the public to which the disclosure statement is directed.