RAAs: New Jersey Adopts Temporary Order

found in the payment of benefits in a check directed to the beneficiary.”

But New Jersey has not reviewed forms and notices referring to RAAs in the past, and the forms and notices may not provide adequate information about RAAs, Considine says.

The New Jersey department “will propose rules in the future clarifying that, where a life insurer offers a RAA and/or other payment options in addition to a direct check payment of the full policy proceeds, disclosure statements related to RAAs and such other options will be filed for approval with the proposed life insurance form, and providing standards for the review and approval of such disclosure statements,” Considine says.

Meanwhile, while work on the new rules is under way, an order will govern RAA programs offered by life insurers operating in New Jersey.

The order, which will last for 120 days, will require that group life issuers give policy owners and death benefit beneficiaries information about RAA benefits payment options.

The notice should include information about FDIC or guaranty association backing, the interest rate that the RAA will pay, a notice about any fees that will be charged, and a statement that the beneficiary can withdraw the RAA balance with one transaction without paying any fees or penalties. The notice must explain how the beneficiary can go about getting all of the cash out of the RAA.

All life insurers operating in New Jersey should send the New Jersey department copies of forms and other written material that describe RAAs and any other non-direct check payment options offered, Considine says.

Insurers have 150 days to comply with the data call.