Bill Text: CA SB426 | 2015-2016 | Regular Session | Chaptered

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Bill Title: Annuities: cash surrender benefits.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2015-07-15 - Chaptered by Secretary of State. Chapter 100, Statutes of 2015. [SB426 Detail]

Download: California-2015-SB426-Chaptered.html

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BILL NUMBER: SB 426	CHAPTERED
	BILL TEXT

	CHAPTER  100
	FILED WITH SECRETARY OF STATE  JULY 15, 2015
	APPROVED BY GOVERNOR  JULY 15, 2015
	PASSED THE SENATE  JULY 6, 2015
	PASSED THE ASSEMBLY  JULY 2, 2015
	AMENDED IN ASSEMBLY  JUNE 16, 2015
	AMENDED IN SENATE  APRIL 14, 2015

INTRODUCED BY   Senator Leyva

                        FEBRUARY 25, 2015

   An act to repeal and add Section 10168.4 of the Insurance Code,
relating to annuities.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 426, Leyva. Annuities: cash surrender benefits.
   Existing law governs annuities and, for those insurance contracts
that provide cash surrender benefits, prescribes the cash surrender
benefit available prior to maturity. Existing law also requires the
death benefit under these contracts to be at least equal to the cash
surrender benefit.
   This bill would instead require the death benefit payable under
contracts issued or delivered on or after January 1, 2016, to persons
65 years of age or older to be at least equal to the annuity value
or accumulation value, excluding any surrender charges or penalties
upon death. The bill would also make technical changes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 10168.4 of the Insurance Code is repealed.
  SEC. 2.  Section 10168.4 is added to the Insurance Code, to read:
   10168.4.  Contracts that provide cash surrender benefits shall
comply with all of the following:
   (a) Cash surrender benefits available prior to maturity shall not
be less than the present value as of the date of surrender of that
portion of the maturity value of the paid-up annuity benefit which
would be provided under the contract at maturity arising from
considerations paid prior to the time of cash surrender reduced by
the amount appropriate to reflect any prior withdrawals from or
partial surrenders of the contract, decreased by the amount of any
indebtedness to the company on the contract, including interest due
and accrued on the indebtedness, and increased by any existing
additional amounts credited by the company to the contract.
   (b) For purposes of subdivision (a), the present value shall be
calculated on the basis of an interest rate that is not more than 1
percent higher than the interest rate specified in the contract for
accumulating the net considerations to determine the maturity value.
   (c) The cash surrender benefit shall not be less than the minimum
nonforfeiture amount at the time of the surrender.
   (d) (1) Except as otherwise provided in paragraph (2), the death
benefit shall be at least equal to the cash surrender benefit.
   (2) For contracts issued or delivered on or after January 1, 2016,
to persons who are 65 years of age or older, the death benefit shall
be at least equal to the annuity value or accumulation value,
excluding any surrender charges or penalties upon death.