NYSID Posts Filing Guidance for EIAs under New Law
The NYSID has posted Filing Guidance for equity indexed annuities on its website, now that changes have been made to the nonforfeiture law to specifically address these products. Most important is the explicit prohibition against using the CL6 certification process for these filings. Properly marked, the Department states that submissions will be given priority in the prior approval queue.
Because the "Deemer" process is statutorily mandated, it remains available. It is worth noting that this guidance indicates that deemer filings "will be handled within the time frames specified by statute." This may be a filing strategy worth seriously considering because experience has shown that priority given innovative product submissions often does not result in a very speedy review. If EIAs move at a similar pace, the statutory time frames of the deemer law may be an attractive alternative and yet still result in a full review prior to marketing the product.
In addition to this guidance, the Department has provided an important warning in preparing these submissions to which companies will want to pay close attention. NY's new law (which will be effective October 8, 2008) requires submission of a demonstration that the present value of the possible 1% reduction in the guaranteed minimum interest rate does not exceed the market value of the benefit. The Department notes here that the Memorandum of Variable Material (where some companies have placed their GMIR procedures under the current nonforfeiture law) is a publicly available document. If your company seeks confidential treatment of that present value demonstration, it must be separate from the other filing material and a specific request for confidentiality is required.
Finally, the NY Insurance Department asks that EIA submissions include a sample sales illustration. They further indicate that, on a case-by-case basis, marketing material may be requested.
Because the "Deemer" process is statutorily mandated, it remains available. It is worth noting that this guidance indicates that deemer filings "will be handled within the time frames specified by statute." This may be a filing strategy worth seriously considering because experience has shown that priority given innovative product submissions often does not result in a very speedy review. If EIAs move at a similar pace, the statutory time frames of the deemer law may be an attractive alternative and yet still result in a full review prior to marketing the product.
In addition to this guidance, the Department has provided an important warning in preparing these submissions to which companies will want to pay close attention. NY's new law (which will be effective October 8, 2008) requires submission of a demonstration that the present value of the possible 1% reduction in the guaranteed minimum interest rate does not exceed the market value of the benefit. The Department notes here that the Memorandum of Variable Material (where some companies have placed their GMIR procedures under the current nonforfeiture law) is a publicly available document. If your company seeks confidential treatment of that present value demonstration, it must be separate from the other filing material and a specific request for confidentiality is required.
Finally, the NY Insurance Department asks that EIA submissions include a sample sales illustration. They further indicate that, on a case-by-case basis, marketing material may be requested.
