Empire State officials say they are starting to get a “number of policy form submissions” for equity-indexed annuities and life insurance policies.
The New York State Insurance Department today issued guidance for insurers filing policy forms for equity-indexed products.
One general rule is that “the product must comply with all the usual nonforfeiture requirements associated with the particular product,” New York department officials write in the guidance. “There may be no loss of value in the product solely based on changes in the equity-index.”
The contract must include a clear description of any limits – such as 50% of the change in the S&P 500 stock index – on how much product owners can share in any index gains, officials write.
If there are caps on the product owners’ ability to share in index gains, then the limitations must either be guaranteed for the entire period that the equity-index is in effect or changes must occur no more frequently than annually.