Sec. 1. 24-A MRSA §2544, sub-§1, as enacted by PL 1979, c. 442, §4, is amended to read:

1. With respect to contracts providing for flexible considerations, the minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be is equal to an accumulation up to that time at a rate of interest of 3% 1.0% per year of percentages of the net considerations, as hereinafter defined, paid prior to that time, decreased by the sum of:

A. Any prior withdrawals from or partial surrenders of the contract accumulated at a rate of interest of 3% 1.0% per year; and

B. The amount of any indebtedness to the insurer on the contract, including interest due and accrued and increased by any existing additional amounts credited by the insurer to the contract.

The net considerations consideration for a given contract year used to define the minimum nonforfeiture amount shall be is an amount not less than zero and shall be is equal to the corresponding gross considerations credited to the contract during that contract year less an annual contract charge of $30 and less a collection charge of $1.25 per consideration credited to the contract during that contract year. The percentages of net considerations shall be are 65% of the net consideration for the first contract year and 87 1/2% of the net considerations for the 2nd and later contract years. Notwithstanding the provisions of the preceding sentence, the percentage shall must be 65% of the portion of the total net consideration for any renewal contract year which that exceeds by not more than 2 times the sum of those portions of the net considerations in all prior contract years for which the percentage was 65%.

SUMMARY

This bill decreases the annuity rate-of-return requirements from 3% to 1.0%.