                                 CODE OF VIRGINIA

NONFORFEITURE REQUIREMENTS (§ 38.2-3220)

A. For contracts issued on or after the operative date as defined in §
38.2-3229, no contract of annuity, except as stated in § 38.2-3219, shall be
delivered or issued for delivery in this Commonwealth unless it contains in
substance the following provisions and statements, or corresponding provisions
and statements that in the opinion of the Commission are at least as favorable
to the contract holder, upon cessation of payment of consideration under the
contract:

   1. That upon cessation of payment of considerations under a contract, or upon
   the written request of the contract holder, the insurer shall grant a paid-up
   annuity benefit on a plan stipulated in the contract of the value specified in
   &#xA7;&#xA7; 38.2-3222 through 38.2-3225 and 38.2-3227.

   2. If a contract provides for a lump sum settlement at maturity or at any
   other time, a provision that upon surrender of the contract at or before the
   beginning of any annuity payments, the insurer shall pay instead of any
   paid-up annuity benefits a cash surrender benefit of the amount specified in
   &#xA7;&#xA7; 38.2-3222, 38.2-3223, 38.2-3225 and 38.2-3227. The insurer may
   reserve the right to defer the payment of the cash surrender benefit for up to
   six months after demand for payment with surrender of the contract after
   making written request and receiving the written approval of the Commission.
   The request shall address the necessity and equitability to all contract
   holders of the deferral.

   3. A statement of the mortality table 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 those benefits.

   4. 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 how the existence of any additional amounts credited by the
   insurer to the contract, any indebtedness to the insurer on the contract or
   any prior withdrawals from or partial surrenders of the contract affects the
   benefits.

B. Notwithstanding the requirements of this subsection, any deferred annuity
contract may provide that if no considerations have been received under a
contract for a period of two full years and the portion of the paid-up annuity
benefit at maturity on the plan stipulated in the contract arising from
considerations paid prior to that period would be less than $20 monthly, the
insurer may at its option terminate the contract by payment in cash of the then
present value of the portion of the paid-up annuity benefit, calculated on the
basis of the mortality table, if any, and interest rate specified in the
contract for determining the paid-up annuity benefit. This payment shall relieve
the insurer of any further obligation under the contract.

HISTORY: 1979, c. 437, § 38.1-470.1; 1986, c. 562; 2004, c. 313.