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(124th General Assembly)
(Substitute House Bill Number 421)
AN ACT
To amend sections 3901.321, 3905.45, 3905.451, and
3915.073 of the Revised
Code relative to insurance
policies that are
issued, sold, or assigned for the
purpose of
purchasing funeral or burial goods or
services, interest earned under the Standard
Nonforfeiture Law for Individual Deferred
Annuities, and acquisitions conducted under the
Holding Company Systems Law.
Be it enacted by the General Assembly of the State of Ohio:
SECTION 1. That sections 3901.321, 3905.45, 3905.451, and
3915.073 of the Revised
Code be amended to read as follows:
Sec. 3901.321. (A) For the purposes of this section: (1) "Acquiring party" means any person by whom or on whose
behalf a merger or other acquisition of control is to be
effected. (2) "Domestic insurer" includes any person controlling a
domestic insurer unless the person, as determined by the
superintendent of insurance, is either directly or through its
affiliates primarily engaged in business other than the business
of insurance. (3) "Person" does not include any securities broker
holding,
in the usual and customary broker's function, less than
twenty per
cent of the voting securities of an insurance company
or of any
person that controls an insurance company. (B)(1) Subject to compliance with division (B)(2) of this
section, no person other than the issuer shall do any of the
following if, as a result, the person would, directly or
indirectly, including by means of conversion or the exercise of
any right to acquire, be in control of a domestic insurer: (a) Make a tender offer for any voting security of a
domestic insurer; (b) Make a request or invitation for tenders of any voting
security of a domestic insurer; (c) Enter into any agreement to exchange securities of a
domestic insurer; (d) Seek to acquire or acquire, in the open market or
otherwise, any voting security of a domestic insurer; (e) Enter into an agreement to merge with, or otherwise to
acquire control of, a domestic insurer. (2)(a) No person shall engage in any transaction described
in division (B)(1) of this section, unless all of the following
conditions are met: (i) The person has filed with the superintendent of
insurance a statement containing the information required by
division (C) of this section; (ii) The person has sent the statement to the domestic
insurer; (iii) The offer, request, invitation, agreement, or
acquisition has been approved by the superintendent in the manner
provided in division (F) of this section. (b) The requirements of division (B)(2)(a) of this section
shall be met at the time any offer, request, or invitation is
made, or any agreement is entered into, or prior to the
acquisition of the securities if no offer or agreement is
involved. (C) The statement required by division (B)(2) of this
section shall be made under oath or affirmation, and shall
contain
all of the following information: (1) The name and address of each acquiring party; (2) If the acquiring party is an individual, the
individual's principal occupation and all offices and positions
held
during the past
five years, and any conviction of crimes
other than minor traffic
violations during the past ten years; (3) If the acquiring party is not an individual, a report
of
the nature of its business operations during the past five
years
or for such lesser period as the acquiring party and any of
its
predecessors shall have been in existence; an informative
description of the business intended to be done by the acquiring
party and the acquiring party's subsidiaries; and a list of all
individuals who are or who have been selected to become directors
or executive officers of the acquiring party, who perform or will
perform functions appropriate to such positions. The list shall
include for each individual the information required by division
(C)(2) of this section. (4) The source, nature, and amount of the consideration
used
or to be used in effecting the merger or other acquisition
of
control, a description of any transaction in which funds were
or
are to be obtained for any such purpose, including any pledge
of
the domestic insurer's stock, or the stock of any of its
subsidiaries or controlling affiliates, and the identity of
persons furnishing such consideration; (5) Fully audited financial information as to the earnings
and financial condition of each acquiring party for its preceding
five fiscal years, or for such lesser period as the acquiring
party and any of its predecessors shall have been in existence,
and similar unaudited information as of a date not earlier than
ninety days prior to the filing of the statement; (6) Any plans or proposals which each acquiring party may
have to liquidate such domestic insurer, to sell its assets or
merge or consolidate it with any person, or to make any other
material change in its business or corporate structure or
management; (7) The number of shares of any security of such issuer or
such controlling person that each acquiring party proposes to
acquire, and the terms of the offer, request, invitation,
agreement, or acquisition, and a statement as to the method by
which the fairness of the proposal was determined; (8) The amount of each class of any security of such
issuer
or such controlling person which is beneficially owned or
concerning which there is a right to acquire beneficial ownership
by each acquiring party; (9) A full description of any contracts, arrangements, or
understandings with respect to any security of such issuer or
such
controlling person in which any acquiring party is involved,
including but not limited to transfer of any of the securities,
joint ventures, loan or option arrangements, puts or calls,
guarantees of loans, guarantees against loss or guarantees of
profits, division of losses or profits, or the giving or
withholding of proxies. The description shall identify the
persons with whom such contracts, arrangements, or understandings
have been made. (10) A description of the purchase of any security of such
issuer or such controlling person during the year preceding the
filing of the statement, by any acquiring party, including the
dates of purchase, names of the purchasers, and consideration
paid
or agreed to be paid therefor; (11) A description of any recommendations to purchase any
security of such issuer or such controlling person made during
the
year preceding the filing of the statement, by any acquiring
party, or by anyone based upon interviews or at the suggestion of
the acquiring party; (12) Copies of all tender offers for, requests, or
invitations for tenders of, exchange offers for, and agreements
to
acquire or exchange any securities of such issuer or such
controlling person, and, if distributed, of additional
solicitation material relating thereto; (13) The terms of any agreement, contract, or
understanding
made with or proposed to be made with any broker or
dealer as to
solicitation of securities of such issuer or such
controlling
person for tender, and the amount of any fees,
commissions, or
other compensation to be paid to brokers or
dealers with regard
thereto; (14)
With respect to proposed affiliations between depository
institutions or any affiliate thereof, within the meaning of Title
I, section 104(c) of the "Gramm-Leach-Bliley Act," Pub. L. No.
106-102, 113 Stat. 1338 (1999), and a domestic insurer, the
proposed effective date of the acquisition or change of control;
(15) Such additional information as the superintendent may
by rule prescribe as necessary or appropriate for the protection
of policyholders of the domestic insurer or in the public
interest. (D)(1) If the person required to file the statement
required
by division (B)(2) of this section is a partnership,
limited
partnership, syndicate, or other group, the
superintendent may
require that the information required by
division (C) of this
section be furnished with respect to each
partner of such
partnership or limited partnership, each member
of such syndicate
or group, and each person that controls such
partner or member.
If
any such partner, member, or person is a
corporation, or the
person required to file the statement is a
corporation, the
superintendent may require that the information
required by
division (C) of this section be furnished with
respect to the
corporation, each officer and director of the
corporation, and
each person that is directly or indirectly the
beneficial owner of
more than ten per cent of the outstanding
voting securities of the
corporation. (2) If any material change occurs in the facts set forth
in
the statement required by division (B)(2) of this section, an
amendment setting forth such change, together with copies of all
documents and other material relevant to the change, shall be
filed with the superintendent by the person subject to division
(B)(2) of this section and sent to the domestic insurer within
two
business days after such person learns of the occurrence of
the
material change. (E) If any offer, request, invitation, agreement, or
acquisition described in division (B)(1) of this section is
proposed to be made by means of a registration statement under
the
"Securities Act of 1933," 48 Stat. 74, 15 U.S.C.A. 78a, or in
circumstances requiring the disclosure of similar information
under the "Securities Exchange Act of 1934," 48 Stat. 881, 15
U.S.C.A. 78a, or under a state law requiring similar registration
or disclosure, the person required to file the statement required
by division (B)(2) of this section may use such documents in
furnishing the information required by that statement. (F)(1) The superintendent shall approve any merger or
other
acquisition of control described in division (B)(1) of this
section unless, after a public hearing, the superintendent
finds
that any of the following apply: (a) After the change of control, the domestic insurer
would
not be able to satisfy the requirements for the issuance of
a
license to write the line or lines of insurance for which it is
presently licensed; (b) The effect of the merger or other acquisition of
control
would be substantially to lessen competition in insurance
in this
state or tend to create a monopoly; (c) The financial condition of any acquiring party is such
as might jeopardize the financial stability of the domestic
insurer, or prejudice the interests of its policyholders; (d) The plans or proposals that the acquiring party has to
liquidate the domestic insurer, sell its assets, or consolidate
or
merge it with any person, or to make any other material change
in
its business or corporate structure or management, are unfair
and
unreasonable to policyholders of the domestic insurer and not
in
the public interest; (e) The competence, experience, and integrity of those
persons that would control the operation of the domestic insurer
are such that it would not be in the interest of policyholders of
the domestic insurer and of the public to permit the merger or
other acquisition of control; (f) The acquisition is likely to be hazardous or
prejudicial
to the insurance-buying public. (2)(a) Chapter 119. of the Revised Code, except for section
119.09 of the Revised Code, applies to
the notice
of any hearing
held under division (F)(1) of this section,
including the notice
of the hearing, the
conduct of the hearing, the orders issued
pursuant to it, the
review of the orders, and all other matters
relating to the
holding of the hearing, but only to the extent
that Chapter 119. of the Revised Code is not inconsistent or in
conflict with this section.
(b) The notice of a hearing required under this division
shall be transmitted by personal service, certified mail, e-mail,
or any other method designed to ensure and confirm receipt of the
notice, to the persons and addresses designated to receive notices
and correspondence in the information statement filed under
division (B)(2) of this section. Confirmation of receipt of the
notice, including electronic "Read Receipt" confirmation, shall
constitute evidence of compliance with the requirement of this
section. The notice of hearing shall include the reasons for the
proposed action and a statement informing the acquiring party that
the party is entitled to a hearing. The notice also shall inform
the acquiring party that at the hearing the acquiring party may
appear in person, by attorney, or by such other representative as
is permitted to practice before the superintendent, or that the
acquiring party may present its position, arguments, or
contentions in writing, and that at the hearing the acquiring
party may present evidence and examine witnesses appearing for and
against the acquiring party. A copy of the notice also shall be
transmitted to attorneys or other representatives of record
representing the acquiring party.
(c) The hearing shall be held at the offices of the
superintendent within ten calendar days, but not earlier than
seven calendar days, of the date of transmission of the notice of
hearing by any means, unless it is postponed or continued; but in
no event shall the hearing be held unless notice is received at
least three days prior to the hearing. The
superintendent may
postpone or continue the hearing upon receipt
of a written request
by an acquiring party, or upon the
superintendent's motion,
provided, however, a hearing in
connection with a proposed change
of control involving a
depository institution or any affiliate
thereof, within the
meaning of Title I, section 104(c) of the
"Gramm-Leach-Bliley
Act," Pub. L. No. 106-102, 113 Stat. 1338
(1999), and a domestic
insurer, may be postponed or continued only
upon the request of an
acquiring party, or upon the
superintendent's motion when the
acquiring party agrees in writing
to extend the sixty-day period
provided for in section 104(c) of
the "Gramm-Leach-Bliley Act," by
a number of days equal to the
number of days of such postponement
or continuance.
(d) For the purpose of conducting any hearing held under
this section, the superintendent may require the attendance of
such witnesses and the production of such books, records, and
papers as the superintendent desires, and may take the depositions
of witnesses residing within or without the state in the same
manner as is prescribed by law for the taking of depositions in
civil actions in the court of common pleas, and for that purpose
the superintendent may, and upon the request of an acquiring party
shall, issue a subpoena for any witnesses or a subpoena duces
tecum to compel the production of any books, records, or papers,
directed to the sheriff of the county where such witness resides
or is found, which shall be served and returned in the same manner
as a subpoena in a criminal case is served and returned. The fees
and mileage of the sheriff and witnesses shall be the same as that
allowed in the court of common pleas in criminal cases. Fees and
mileage shall be paid from the fund in the state treasury for the
use of the superintendent in the same manner as other expenses of
the superintendent are paid. In any case of disobedience or
neglect of any subpoena served on any person or the refusal of any
witness to testify in any matter regarding which the witness may
lawfully be interrogated, the court of common pleas of any county
where such disobedience, neglect, or refusal occurs or any judge
thereof, on application by the superintendent, shall compel
obedience by attachment proceedings for contempt, as in the case
of disobedience of the requirements of a subpoena issued from the
court or a refusal to testify therein.
In any hearing held under this section, a record of the
testimony, as provided by stenographic means or by use of audio
electronic recording devices, as determined by the superintendent,
and other evidence submitted shall be taken at the expense of the
superintendent. The record shall include all of the testimony and
other evidence, and rulings on the admissibility thereof,
presented at the hearing.
The superintendent shall pass upon the admissibility of
evidence, but a party to the proceedings may at that time object
to the rulings of the superintendent, and if the superintendent
refuses to admit evidence, the party offering the evidence shall
proffer the evidence. The proffer shall be made a part of the
record of the hearing.
In any hearing held under this section, the superintendent
may call any person to testify under oath as upon
cross-examination. The superintendent, or any one delegated by
the superintendent to conduct a hearing, may administer oaths or
affirmations.
In any hearing under this section, the superintendent may
appoint a hearing officer to conduct the hearing; the hearing
officer has the same powers and authority in conducting the
hearing as is granted to the superintendent. The hearing officer
shall have been admitted to the practice of law in the state and
be possessed of any additional qualifications as the
superintendent requires. The hearing officer shall submit to the
superintendent a written report setting forth the hearing
officer's finding of fact and conclusions of law and a
recommendation of the action to be taken by the superintendent. A
copy of the written report and recommendation shall, within seven
days of the date of filing thereof, be served upon the acquiring
party or the acquiring party's attorney or other representative of
record, by personal service, certified mail, e-mail, or
any other
method designed to ensure and confirm receipt of the
report. The
acquiring party may, within three days of receipt of
the copy of
the written report and recommendation, file with the
superintendent written objections to the report and
recommendation, which objections the superintendent shall
consider before approving, modifying, or disapproving the
recommendation. The superintendent may grant extensions of time
to the acquiring party within which to file such objections. No
recommendation of the hearing officer shall be approved, modified,
or disapproved by the superintendent until after three days
following the service of the report and recommendation as provided
in this section. The superintendent may order additional
testimony to be taken or permit the introduction of further
documentary evidence. The superintendent may approve, modify, or
disapprove the recommendation of the hearing officer, and the
order of the superintendent based on the report, recommendation,
transcript of testimony, and evidence, or the objections of the
acquiring party, and additional testimony and evidence shall have
the same effect as if the hearing had been conducted by the
superintendent. No such recommendation is final until confirmed
and approved by the superintendent as indicated by the order
entered in the record of proceedings, and if the superintendent
modifies or disapproves the recommendations of the hearing
officer, the reasons for the modification or disapproval shall be
included in the record of proceedings.
After the order is entered, the superintendent shall
transmit in the manner and by any of the methods set forth in
division (F)(2)(b) of this section a certified copy of the order
and a statement of the time and method by which an appeal may be
perfected. A copy of the order shall be mailed to the attorneys
or other representatives of record representing the acquiring
party.
(e) An order of disapproval issued by the superintendent
may be appealed to the court of common pleas of Franklin county by
filing a notice of appeal with the superintendent and a copy of
the notice of appeal with the court, within fifteen calendar days
after the transmittal of the copy of the order of disapproval.
The
notice of appeal shall set forth the order appealed from and
the
grounds for appeal, in accordance with section 119.12 of the
Revised Code. (3) The superintendent may retain at the acquiring party's
expense any attorneys, actuaries, accountants, and other experts
not otherwise a part of the superintendent's staff as may be
reasonably necessary to assist the superintendent in reviewing
the
proposed acquisition of control. (G) This section does not apply to either of the
following: (1) Any transaction that is subject to section 3907.09,
3907.10, 3907.11, or 3921.14, or sections 3925.27 to
3925.31,
3941.35 to 3941.46, or section 3953.19 of the Revised Code; (2) Any offer, request, invitation, agreement, or
acquisition that the superintendent by order exempts from this
section on either of the following bases: (a) It has not been made or entered into for the purpose
and
does not have the effect of changing or influencing the
control of
a domestic insurer; (b) It is not otherwise comprehended within the purposes
of
this section. (H) Nothing in this section or in any other section of
Title
XXXIX of the Revised Code shall be construed to impair the
authority of the attorney general to investigate or prosecute
actions under any state or federal antitrust law with respect to
any merger or other acquisition involving domestic insurers.
(I) In connection with a proposed change of control
involving a depository institution or any affiliate thereof,
within the meaning of Title I, section 104(c) of the
"Gramm-Leach-Bliley Act," Pub. L. No. 106-102, 113 Stat. 1338
(1999), and a domestic insurer, not later than
sixty days after
the date of the notification of the proposed
change in control
submitted pursuant to division (B)(2) of this
section, the
superintendent shall make any
determination that the person
acquiring control of the insurer
shall maintain or restore the
capital of the insurer to the level
required by the laws and
regulations of this state.
Sec. 3905.45.
No insurer engaged in the business of
providing
(A) If an insurance policy has been issued, sold, or
assigned for the
payment
purpose
of
purchasing any funeral
or
burial goods or services, the insurer shall
not pay
the benefits
of
the insurance policy, including the cash surrender value, to
any
funeral
director or funeral home, licensed under Chapter 4717.
of
the Revised Code
provider of such goods or services,
unless the
insurer, as a condition to paying the benefits of the insurance
policy,
is provided by
receives from the
funeral director or
funeral home with
provider a certified
copy of the certificate of
death of the insured, or other evidence of death satisfactory to
the insurer, and a certificate of
completion. The certificate of
completion shall be signed by the
funeral
director,
provider and
shall certify that the
funeral director or funeral home
provider
has
provided
delivered all the goods and
performed all the
services contracted for, by, or on behalf of the
insured.
(B) A provider of funeral or burial goods or services shall
not pledge, assign, transfer, borrow from, or otherwise encumber
an insurance policy described in division (A) of this section
prior to delivering all the goods and performing all the services
contracted for, by, or on behalf of the insured. However, a
provider may assign or otherwise transfer such a policy to another
provider of funeral or burial goods or services in conjunction
with the assumption by the other provider of the contractual
obligation to provide the goods or services.
Sec. 3905.451.
The sale of a
A life insurance policy
that is
issued, sold, or assigned for the
benefits
purpose of
which are
payable to the provider of
purchasing funeral or burial goods or
services
as payment for
these, and the contractual obligation to
provide the goods or services
is, are not
the sale of a preneed
funeral contract as
defined in
subject to section 1111.19 of the
Revised Code.
Sec. 3915.073. (A) This section shall be known as the
standard nonforfeiture law for individual deferred annuities. (B) This section does not apply to any reinsurance, group
annuity purchased under a retirement plan or plan of deferred
compensation established or maintained by an employer, including
a
partnership or sole proprietorship, or by an employee
organization, or by both, other than a plan providing individual
retirement accounts or individual retirement annuities under
section 408 of the Internal Revenue Code of 1954, 26 U.S.C.A.
408,
as amended, premium deposit fund, variable annuity,
investment
annuity, immediate annuity, any deferred annuity
contract after
annuity payments have commenced, or reversionary
annuity, nor to
any contract which is delivered outside this
state through an
agent or other representative of the company
issuing the contract. (C) In the case of contracts issued on or after the
operative date of this section as defined in division (L) of this
section, no contract of annuity, except as stated in division (B)
of this section shall be delivered or issued for delivery in this
state unless it contains in substance the following provisions,
or
corresponding provisions that in the opinion of the
superintendent
are at least as favorable to the contractholder,
upon cessation of
payment of consideration under the contract: (1) That upon cessation of payment of considerations under
a
contract, the company will grant a paid-up annuity benefit on a
plan stipulated in the contract of such value as is specified in
divisions (E), (F), (G), (H), and (J) of this section; (2) If a contract provides for a lump sum settlement at
maturity, or at any other time, that upon surrender of the
contract at or prior to the commencement of any annuity payments,
the company will pay in lieu of any paid-up annuity benefit a
cash
surrender benefit of such amount as is specified in
divisions (E),
(F), (H), and (J) of this section. The company
shall reserve the
right to defer the payment of such cash
surrender benefit for a
period of six months after demand
therefor with surrender of the
contract. (3) A statement of the mortality table, if any, and
interest
rates used in calculating any minimum paid-up annuity,
cash
surrender, or death benefits that are guaranteed under the
contract, together with sufficient information to determine the
amounts of such benefits; (4) A statement that any paid-up annuity, cash surrender,
or
death benefits that may be available under the contract are
not
less than the minimum benefits required by any statute of the
state in which the contract is delivered and an explanation of
the
manner in which such benefits are altered by the existence of
any
additional amounts credited by the company to the contract,
any
indebtedness to the company on the contract, or any prior
withdrawals from or partial surrenders of the contract. Notwithstanding the requirements of this section, any
deferred annuity contract may provide that if no considerations
have been received under a contract for a period of two full
years
and the portion of the paid-up annuity benefit at maturity
on the
plan stipulated in the contract arising from
considerations paid
prior to such period would be less than
twenty dollars monthly,
the company may at its option terminate
such contract by payment
in cash of the then present value of
such portion of the paid-up
annuity benefit, calculated on the
basis of the mortality table,
if any, and interest rate specified
in the contract for
determining the paid-up annuity benefit, and
by such payment shall
be relieved of any further obligation under
such contract. (D) The minimum values as specified in divisions (E), (F),
(G), (H), and (J) of this section of any paid-up annuity, cash
surrender, or death benefits available under an annuity contract
shall be based upon minimum nonforfeiture amounts as defined in
this section. (1) With respect to contracts providing for flexible
considerations, the minimum nonforfeiture amount at any time at
or
prior to the commencement of any annuity payments shall be
equal
to an accumulation up to such time at a rate of interest of
three
per cent per annum of percentages of the net
considerations, as
defined in this section, paid prior to such
time, decreased by the
sum of: (a) Any prior withdrawals from or partial surrenders of
the
contract accumulated at a rate of interest of three per cent
per
annum; and (b) The amount of any indebtedness to the company on the
contract, including interest due and accrued; and increased by
any
existing additional amounts credited by the company to the
contract. The net considerations for a given contract year used to
define the minimum nonforfeiture amount shall be an amount not
less than zero and shall be equal to the corresponding gross
considerations credited to the contract during that contract year
less an annual contract charge of thirty dollars and less a
collection charge of one dollar and twenty-five cents per
consideration credited to the contract during that contract year.
The percentages of net considerations shall be sixty-five per
cent
of the net consideration for the first contract year and
eighty-seven and one-half per cent of the net considerations for
the second and later contract years. Notwithstanding the
provisions of the preceding sentence, the percentage shall be
sixty-five per cent of the portion of the total net consideration
for any renewal contract year that exceeds by not more than two
times the sum of those portions of the net considerations in all
prior contract years for which the percentage was sixty-five per
cent.
Notwithstanding any other provision of this section, for any
contract issued on or after the effective date of this amendment,
and before September 1, 2004,
the interest rate at which net
considerations, partial
withdrawals, and partial surrenders shall
be accumulated for
purposes of determining minimum nonforfeiture
amounts shall be one
and one-half per cent per annum. (2) With respect to contracts providing for fixed
scheduled
considerations, minimum nonforfeiture amounts shall be
calculated
on the assumption that considerations are paid
annually in advance
and shall be defined as for contracts with
flexible considerations
which are paid annually with two
exceptions: (a) The portion of the net consideration for the first
contract year to be accumulated shall be the sum of sixty-five
per
cent of the net consideration for the first contract year
plus
twenty-two and one-half per cent of the excess of the net
consideration for the first contract year over the lesser of the
net considerations for the second and third contract years; (b) The annual contract charge shall be the lesser of (i)
thirty dollars or (ii) ten per cent of the gross annual
consideration. (3) With respect to contracts providing for a single
consideration, minimum nonforfeiture amounts shall be defined as
for contracts with flexible considerations except that the
percentage of net consideration used to determine the minimum
nonforfeiture amount shall be equal to ninety per cent and the
net
consideration shall be the gross consideration less a
contract
charge of seventy-five dollars. (E) Any paid-up annuity benefit available under a contract
shall be such that its present value on the date annuity payments
are to commence is at least equal to the minimum nonforfeiture
amount on that date. Such present value shall be computed using
the mortality table, if any, and the interest rate specified in
the contract for determining the minimum paid-up annuity benefits
guaranteed in the contract. (F) For contracts which provide cash surrender benefits,
such cash surrender benefits available prior to maturity shall
not
be less than the present value as of the date of surrender of
that
portion of the maturity value of the paid-up annuity benefit
that
would be provided under the contract at maturity arising
from
considerations paid prior to the time of cash surrender
reduced by
the amount appropriate to reflect any prior
withdrawals from or
partial surrenders of the contract, such
present value being
calculated on the basis of an interest rate
not more than one per
cent higher than the interest rate
specified in the contract for
accumulating the net considerations
to determine such maturity
value, decreased by the amount of any
indebtedness to the company
on the contract, including interest
due and accrued, and increased
by any existing additional amounts
credited by the company to the
contract. In no event shall any
cash surrender benefit be less
than the minimum nonforfeiture
amount at that time. The death
benefit under such contracts
shall be at least equal to the cash
surrender benefit. (G) For contracts that do not provide cash surrender
benefits, the present value of any paid-up annuity benefit
available as a nonforfeiture option at any time prior to maturity
shall not be less than the present value of that portion of the
maturity value of the paid-up annuity benefit provided under the
contract arising from considerations paid prior to the time the
contract is surrendered in exchange for, or changed to, a
deferred
paid-up annuity, such present value being calculated for
the
period prior to the maturity date on the basis of the
interest
rate specified in the contract for accumulating the net
considerations to determine such maturity value, and increased by
any existing additional amounts credited by the company to the
contract. For contracts that do not provide any death benefits
prior to the commencement of any annuity payments, such present
values shall be calculated on the basis of such interest rate and
the mortality table specified in the contract for determining the
maturity value of the paid-up annuity benefit. However, in no
event shall the present value of a paid-up annuity benefit be
less
than the minimum nonforfeiture amount at that time. (H) For the purpose of determining the benefits calculated
under divisions (F) and (G) of this section, in the case of
annuity contracts under which an election may be made to have
annuity payments commence at optional maturity dates, the
maturity
date shall be deemed to be the latest date for which
election
shall be permitted by the contract, but shall not be
deemed to be
later than the anniversary of the contract next
following the
annuitant's seventieth birthday or the tenth
anniversary of the
contract, whichever is later. (I) Any contract that does not provide cash surrender
benefits or does not provide death benefits at least equal to the
minimum nonforfeiture amount prior to the commencement of any
annuity payments shall include a statement in a prominent place
in
the contract that such benefits are not provided. (J) Any paid-up annuity, cash surrender, or death benefits
available at any time, other than on the contract anniversary
under any contract with fixed scheduled considerations, shall be
calculated with allowance for the lapse of time and the payment
of
any scheduled considerations beyond the beginning of the
contract
year in which cessation of payment of considerations
under the
contract occurs. (K) For any contract that provides, within the same
contract
by rider or supplemental contract provision, both
annuity benefits
and life insurance benefits that are in excess
of the greater of
cash surrender benefits or a return of the
gross considerations
with interest, the minimum nonforfeiture
benefit shall be equal to
the sum of the minimum nonforfeiture
benefits for the annuity
portion and the minimum nonforfeiture
benefits, if any, for the
life insurance portion computed as if
each portion were a separate
contract. Notwithstanding the
provisions of divisions (E), (F),
(G), (H), and (J) of this
section, additional benefits payable: (1) In the event of total and permanent disability; (2) As reversionary annuity or deferred reversionary
annuity
benefits; or (3) As other policy benefits additional to life insurance,
endowment and annuity benefits, and considerations for all such
additional benefits shall be disregarded in ascertaining the
minimum nonforfeiture amounts, paid-up annuity, cash surrender,
and death benefits that may be required by this section. The inclusion of such additional benefits shall not be
required in any paid-up benefits, unless such additional benefits
separately would require minimum nonforfeiture amounts, paid-up
annuity, cash surrender, and death benefits. (L) Any company may file with the superintendent a written
notice of its election to comply with the provisions of this
section on or before July 1, 1980. The date specified in the
notice shall be the operative date of this section for such
company. If a company makes no such election, the operative date
of this section for the company shall be July 1, 1980.
SECTION 2. That existing sections 3901.321, 3905.45,
3905.451, and 3915.073 of the
Revised Code are hereby repealed.
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