A. A contract of annuity, except as stated in subsection K of this section, shall not be delivered or issued for delivery in this state unless the contract contains in substance the following provisions or corresponding provisions that in the opinion of the director are at least as favorable to the contract holder on cessation of payment of considerations under the contract:

1. 1. That on cessation of payment of considerations under a contract, or on the written request of the contract owner, the company shall grant a paid-up annuity benefit on a plan stipulated in the contract of such value as is specified in subsections D, E, F, G and I of this section.
2. 2. If a contract provides for a lump sum settlement at maturity, or at any other time, that on surrender of the contract at or before the commencement of any annuity payments, the company shall pay in lieu of a paid-up annuity benefit a cash surrender benefit of such an amount as is specified in subsections D, E, G and I of this section. The company, within thirty days of the date of maturity as prescribed in the contract, shall notify the annuity owner of the owner’s rights under the contract at the time of maturity of the contract, including the right to receive the cash value benefit in a lump sum, if applicable. The company shall pay any amounts due under the contract within thirty days after the date the amount becomes payable. The company may reserve the right to defer the payment of the cash surrender benefit for a period not to exceed one hundred eighty days after demand for such a cash surrender benefit with surrender of the contract after making written request and receiving written approval from the director. The annuity owner shall be notified within fifteen days after the date that any request for withdrawal is received that the company has requested a deferral pursuant to this paragraph. In making its request to the director, the company shall address the necessity and equitability to all policyholders of the deferral and the reason why payment cannot take place within the time period required under this paragraph after the date the annuity benefit becomes due. Any transfer of monies to another annuity company designated by the contract owner pursuant to section 1035 of the internal revenue code shall take place within thirty days after all required forms relating to the transfer are filed with the original annuity company.
3. 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 the benefits.
4. 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 the 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.

C. The minimum values as specified in subsections D, E, F, G and I of this section of any paid-up annuity, cash surrender or death benefits available under an annuity contract shall be based on minimum nonforfeiture amounts prescribed as follows:

1. 1. The minimum nonforfeiture amount at any time at or before the commencement of any annuity payments is equal to an accumulation up to that time at rates of interest, as prescribed in paragraph 2 of this subsection, of the net considerations paid before that time, decreased by the sum of all of the following:

   1. (a) Any prior withdrawals from or partial surrenders of the contract accumulated at rates of interest as prescribed in paragraph 2 of this subsection.
   2. (b) An annual contract charge of $50, accumulated at rates of interest as prescribed in paragraph 2 of this subsection.
   3. (c) Any premium tax paid by the company for the contract, accumulated at rates of interest as prescribed in paragraph 2 of this subsection.

   4. (d) The amount of any indebtedness to the company on the contract, including interest due and accrued.

      For the purposes of this paragraph, the net considerations for a given contract year used to define the minimum nonforfeiture amount is an amount equal to eighty-seven and one-half percent of the gross considerations credited to the contract during that contract year.

2. 2. The interest rate used in determining minimum nonforfeiture amounts is an annual rate of interest determined as the lesser of three percent per annum and the following, which shall be specified in the contract if the interest rate will be reset:

   1. (a) The five-year constant maturity treasury rate reported by the federal reserve as of a date, or average over a period, rounded to the nearest one-twentieth of one percent, specified in the contract not longer than fifteen months before the contract issue date or redetermination date under subdivision (d) of this paragraph.
   2. (b) Reduced by one hundred twenty-five basis points.
   3. (c) Where the resulting interest rate is not less than fifteen-hundredths of one percent.
   4. (d) The interest rate shall apply for an initial period and may be redetermined for additional periods. The redetermination date, basis and period, if any, shall be stated in the contract. The basis is the date or average over a specified period that produces the value of the five-year constant maturity treasury rate to be used at each redetermination date.
3. 3. During the period or term that a contract provides substantive participation in an equity indexed benefit, it may increase the reduction described in paragraph 2, subdivision (b) of this subsection by up to an additional one hundred basis points to reflect the value of the equity index benefit. The present value at the contract issue date, and at each redetermination date thereafter, of the additional reduction shall not exceed the market value of the benefit. The director may require a demonstration that the present value of the additional reduction does not exceed the market value of the benefit. Lacking such a demonstration that is acceptable to the director, the director may disallow or limit the additional reduction.
4. 4. The director may adopt rules to implement paragraph 3 of this subsection and 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 where the director determines that adjustments are justified.