Gender Equity in MA Annuities
The Massachusetts legislature recently prohibited, as of January 1, 2009, the use of sex-distinct mortality tables for individual or group annuities or pure endowment contracts. Several sections of the Mass Insurance Law were revised to state that "a mortality table shall only be applied to an individual or group annuity or pure endowment contract on a gender-neutral or gender-blended so-called basis in accordance with regulations promulgated by the commissioner." In addition, recognition of a difference in life expectancy in the terms or conditions of a group or individual annuity, pure endowment contract or certificate covering residents of the commonwealth which is issued or delivered within or without the commonwealth on or after January 1, 2009, including but not limited to the amount or method of payment of premiums, rate charges or in the benefits payable, is considered to be an unfair method of competition or an unfair or deceptive act under the new law. (Emphasis mine).
Note that the italicized text appears to expand the usual exercise of jurisdiction. This unfair practices section applies, on its face, to annuity contracts issued anywhere, if a resident is covered by the contract. For some companies this might mean that they need to have unisex annuity contracts approved in several states so that a unisex contract could be issued to a MA resident who legitimately applies for an annuity in another state, e.g. one who is employed in neighboring CT. If a CT application is completed, a CT annuity contract must be issued. However, if the applicant is a MA resident, even if the annuity contract is issued in CT, under the new law it must have unisex purchase rates. Therefore, the company needs an approved unisex contract for use in CT. After January 1, 2009, issuing a contract with sex-specific purchase rates to that MA resident would appear to be a violation of the new provisions of the unfair practices law in MA, even though the sale occurred in CT.
