Annuities: cash surrender benefits.

Existing law governs annuities and, for those insurance contracts that provide cash surrender benefits, prescribes the cash surrender benefit available prior to maturity. Existing law also requires the death benefit under these contracts to be at least equal to the cash surrender benefit. Existing law requires, with exceptions, that no contract of annuity be delivered or issued for delivery in this state unless it contains, in substance, specified provisions, or corresponding provisions that in the opinion of the commissioner are at least as favorable to the contractholder, upon cessation of payment of considerations under the contract. This bill, among other things, would require the insurer, for an individual annuity contract issued on or after January 1, 2019, to return to the owner all moneys due for annuity contracts that are surrendered by the contract owner as expeditiously as possible after the request for surrender is received, as defined, but no later than 45 days from the date of surrender, as specified. The bill would authorize insurers to require that a request to surrender a contract be in writing and contain various elements, including, the contract number of the contract and the name, address, and telephone number of the contract owner, on the contract to be surrendered. The bill would also authorize the insurer to require the contract owner to complete an administrative form, as provided, as part of the surrender process, and would require the surrender be processed and all moneys due be returned within 30 days from the effective date of the surrender if the contract owner completes and submits the administrative form within 14 days of the surrender request. The bill would require a contract to include language or be accompanied by a notice setting forth the permitted requirements for a surrender of the contract, as specified.