Legislature(2003 - 2004)
04/29/2003 01:37 PM Senate L&C
Audio | Topic |
---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CSSSHB 184(L&C)am-INDIVIDUAL DEFERRED ANNUITIES CHAIR BUNDE announced CSSSHB 184(L&C)am to be up for consideration. REPRESENTATIVE COGHILL, sponsor, said the National Association of Insurance Commissioners (NAIC) made a recommendation with regard to minimum values of annuity contracts. Currently, the minimum amount is set in statute. HB 184 deals with deferred annuities and has an effective date. It started out on a minimum non-forfeiture amount of 3 percent. However, the NAIC does not think that can continue and has asked to have the statute changed from 3 percent to 1.5 percent. In addition, the NAIC wants to bring in an index system and faxed him copies of it as he introduced the bill. Although he is still learning about the index system, he explained that it basically allows for the reasons for the variable indexing. Page 2, subsection 2 contains what they will need to study the most - the interest rate used to determine the minimum non-forfeiture amount. The NAIC wants to halve the cap of 3 percent and on line 8, and tie it to a 5- year constant maturity treasury, an index that the NAIC agreed would always be there and could be discovered readily every day. Subsection (c) is the floor, which is a resulting interest rate of not less than 1 percent. This protects the company from collapsing under a payout it can't sustain and it protects the customer who wants to get money out under a non-forfeiture from costing more than it's worth. REPRESENTATIVE COGHILL said the Division of Insurance and the National Association of Insurance Commissioners endorse this bill. Fourteen other states have already made this change. CHAIR BUNDE said it would be nice to have a win-win situation and that he looked forward to working with him on this issue next week.
Document Name | Date/Time | Subjects |
---|