HARRY HUGHES, Governor

3223

NET CONSIDERATION FOR THE FIRST CONTRACT YEAR AND 87 1/2
PERCENT OF THE NET CONSIDERATIONS FOR THE SECOND AND LATER
CONTRACT YEARS. NOTWITHSTANDING THE PROVISIONS OF THE
PRECEDING SENTENCE, THE PERCENTAGE SHALL BE 65 PERCENT OF
THE PORTION OF THE TOTAL NET CONSIDERATION FOR ANY RENEWAL
CONTRACT YEAR WHICH 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 65 PERCENT.

(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:

(I)  THE PORTION OF THE NET CONSIDERATION
FOR THE FIRST CONTRACT YEAR TO BE ACCUMULATED SHALL BE THE
SUM OF 65 PERCENT OF THE NET CONSIDERATION FOR THE FIRST
CONTRACT YEAR PLUS 22 1/2 PERCENT 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.

(II)  THE ANNUAL CONTRACT CHARGE SHALL BE
THE LESSER OF $30 DOLLARS OR 10 PERCENT OF THE GROSS ANNUAL
CONSIDERATIONS.

(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 90
PERCENT AND THE NET CONSIDERATION SHALL BE THE GROSS
CONSIDERATION LESS A CONTRACT CHARGE OF $75.

(E)  ANY PAID-UP ANNUITY BENEFIT AVAILABLE UNDER A
CONTRACT SHALL BE ITS PRESENT VALUE ON THE DATE ANNUITY
PAYMENTS ARE TO COMMENCE AT LEAST EQUAL TO THE MINIMUM
NONFORFEITURE AMOUNT ON THAT DATE. THE 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, CASH SURRENDER BENEFITS AVAILABLE PRIOR TO
MATURITY MAY 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 WHICH 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 1
PERCENT HIGHER THAN THE INTEREST RATE SPECIFIED IN THE
CONTRACT FOR ACCUMULATING THE NET CONSIDERATIONS TO
DETERMINE THE MATURITY VALUE, DECREASED BY THE AMOUNT OF ANY