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August 03, 2006 at 12:55 PM
New Jersey regulators say issuers of equity indexed annuities should let purchasers participate in at least 30% of the increase in the relevant index.
Steven Goldman, the new commissioner of the New Jersey Department of Banking and Insurance, has spelled out EIA form requirements in Bulletin Number 06-18.
The New Jersey department last proposed establishing EIA form standards in 1998, but it never adopted the proposed standards, Goldman writes.
The New Jersey department “intends to propose new rules in the near future that will permit a wider range of EIA products than would have been permitted under the department’s original proposal,” Goldman writes.
The bulletin is supposed to provide guidance on EIA forms and forms for equity-indexed fixed account options within variable annuity forms while work on the new EIA rules is in progress, Goldman writes.
“EIAs that are not variable contracts provide guaranteed minimum values that must comply with the Standard Non-Forfeiture Law for Individual Deferred Annuities…or the Indexed Standard Nonforfeiture Law for Individual Deferred Annuities,” Goldman notes.
