05RS SB130

SB130

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SB 130 (BR 1190) - T. Jensen

     AN ACT relating to life insurance contracts and annuities.
     Amend KRS 304.12-030 to define "replacement," "existing insurer," "replacing insurer," "existing life insurance policy or annuity contract," "financed purchase," and "direct-response solicitation"; provide that no replacing insurer shall issue a life policy or annuity contact in a replacement transaction to replace an existing policy or contract unless the replacing insurer agrees in writing with the insured that the policy or contract owner has the right to return a life insurance policy or annuity contract within thirty days of delivery of policy or contract; provide that subsection (2) does not apply to group life insurance or group annuities where there is no direct solicitation of individuals by an insurance producer, does not apply to group life insurance and annuities used to fund prearranged funeral contracts, does not apply to policies or contracts used to fund certain plans as specified in paragraph (3)(g), and does not apply where new coverage is provided under a life policy or contract and the cost is borne wholly by the insured's employer or by an association of which the insured is a member; and immediate annuities purchased with proceeds from an existing contract, and structured settlements; exempt policies or contracts used to fund ERISA plans, plans under Sections 402(1), 401(k), 403(b) 414 or 457of the Internal Revenue Code or a nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor from subsection (2) relating to replacing insurer requirements; except when the plan is funded solely by contributions an employee elects to make from a choice of two or more insurers and there is a direct solicitation of the employee and exempts new coverage under a life insurance policy with the cost borne wholly by the insured's employer or association, immediate annuities purchased with proceeds from an existing contract or structured settlements; amend KRS 304.15-315 to provide that to the extent a variable annuity contract provides benefits in accordance with KRS 304.15-390, the contract shall contain provisions to comply with this section and shall not be otherwise subject to this section; provide that after August 1, 2005, any insurer may file a notice of election to apply the provisions of Section 2 on a contract-form by contract-form basis to annuity contracts issued during the period from the date of election through June 30, 2006; provide that in all other instances insurers shall apply the provisions of Section 2 to annuity contracts issued through June 30, 2006; provide that insurers shall apply the provisions of Section 3 to all annuity contracts issued on or after July 1, 2006; create a new section of Subtitle 15 of KRS Chapter 304 to be known as the Standard Nonforfeiture Law for Individual Deferred Annuities of 2005; require certain provisions to be in annuity contracts issued on or after July 1, 2006; define minimum nonforfeiture amount; specify the interest rate used in determining minimum nonforfeiture amounts; authorize the commissioner to promulgate administrative regulations to provide for further adjustments to the calculation of minimum nonforfeiture amounts for contracts that provide substantive participation in an equity index benefit and for other contracts for which the commissioner determines adjustments are justified; provide that as to any paid-up annuity benefit available under a contract the present value on the date annuity payments are to commence is at least equal to the minimum nonforfeiture amount on that date; provide for the cash surrender benefits available prior to maturity for contracts which provide cash surrender benefits; provide for the present value of any paid-up annuity benefit available as a nonforfeiture option at any time prior to maturity for contracts which do not provide cash surrender benefits; provide that after August 1, 2005, any insurer may file with the commissioner a written notice of its election to apply the provisions of Section 2 on a contract-form by contract-form basis to annuity contracts issued from the date of election through June 30, 2006; require insurers to apply the provisions of Section 3 to annuity contracts issued on or after July 1, 2006.

     Feb 4-introduced in Senate
     Feb 9-to Banking and Insurance (S)
     Feb 16-reported favorably, 1st reading, to Consent Calendar
     Feb 17-2nd reading, to Rules; posted for passage in the Consent Orders of the Day for Friday, February 18, 2005
     Feb 18-3rd reading, passed 36-0; received in House
     Feb 22-to Banking and Insurance (H)
     Feb 24-posted in committee; posting waived
     Feb 25-reported favorably, 1st reading, to Calendar
     Feb 28-2nd reading, to Rules; posted for passage in the Regular Orders of the Day for Tuesday, March 1, 2005
     Mar 2-3rd reading, passed 90-0
     Mar 3-received in Senate; enrolled, signed by each presiding officer; delivered to Governor
     Mar 11-signed by Governor (Acts ch. 47)


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