                                 CODE OF VIRGINIA

MINIMUM VALUES (§ 38.2-3221)

A. The minimum values specified in §§ 38.2-3222 through 38.2-3225 and
38.2-3227 of any paid-up annuity, cash surrender or death benefits available
under an annuity contract shall be based upon the minimum nonforfeiture amounts
defined in this section and applied as follows:

   1. For contracts issued before April 1, 2003, the amounts shall be determined
   in accordance with subsections B, C, and D.

   2. For contracts issued on or after April 1, 2003, and before July 1, 2004,
   the amounts shall be determined in accordance with the applicable provisions
   of subsections B, C, D, and E.

   3. For contracts issued on or after July 1, 2004, and before July 1, 2005, the
   amounts shall be determined in accordance with the applicable provisions of
   subsections B, C, D, and E unless the insurer makes the election authorized by
   subsection F, in which case the amounts shall be determined in accordance with
   subdivisions F 1 through F 4.

   4. For contracts issued on or after July 1, 2005, the amounts shall be
   determined in accordance with subdivisions F 1 through F 4.

B. 1. For contracts providing for flexible considerations, the minimum
nonforfeiture amount at or any time before the beginning of any annuity payments
shall equal any accumulation up to that time at an annual rate of interest of
three percent of percentages of the net considerations as defined in this
subsection, paid prior to that time, increased by an existing additional amount
credited by the insurer to the contract and decreased by the sum of:
			a. Any prior withdrawals from or partial surrenders of the contract
accumulated at a rate of interest of three percent per year; and
			b. The amount of any indebtedness to the insurer on the contract, including
interest due and accrued.

   2. The net considerations for a given contract year used to define the minimum
   nonforfeiture amount shall be not less than zero and shall equal 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 65 percent of
   the net consideration for the first contract year and 87 &#xBD; 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
   that 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.

C. For 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 the same as for contracts with
flexible considerations that are paid annually with two exceptions:

   1. 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 &#xBD; 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.

   2. The annual contract charge shall be the lesser of (i) $30 or (ii) 10
   percent of the gross annual consideration.

D. For contracts providing for a single consideration, minimum nonforfeiture
amounts shall be the same as for contracts with flexible considerations except
that the percentage of net consideration used to determine the minimum
nonforfeiture amount shall equal 90 percent, and the net consideration shall be
the gross consideration less a contract charge of $75.

E. Notwithstanding any other provision of this section, for any contract issued
on or after April 1, 2003, and before July 1, 2005, the interest rate at which
net considerations, partial withdrawals, and partial surrenders may be
accumulated, for the purposes of determining minimum nonforfeiture amounts, may
be one and one-half percent per year.

F. The following provisions shall apply for contracts issued on or after July 1,
2005, and at the election of the insurer may apply also to specified contracts
issued on or after July 1, 2004. An insurer may make this election on a
contract-form-by-contract-form basis by filing written notice with the
Commission and specifying a date for the provisions to apply prior to July 1,
2005.

   1. The minimum nonforfeiture amount at or any time before the beginning of any
   annuity payments shall equal an accumulation up to that time at rates of
   interest, as indicated in subdivision 3, of the net considerations as defined
   in this subsection, paid prior to that time, and decreased by the sum of:
   				a. Any prior withdrawals from or partial surrenders of the contract
   accumulated at rates of interest as indicated in subdivision 3;
   				b. An annual contract charge of $50, accumulated at rates of interest as
   indicated in subdivision 3;
   				c. Any premium tax paid by the insurer for the contract, accumulated at
   rates of interest as indicated in subdivision 3, adjusted for any tax that is
   not actually paid or which has been credited back to the insurer, such as upon
   early termination of the contract; and
   				d. The amount of any indebtedness to the insurer on the contract,
   including interest due and accrued.

   2. The net considerations for a given contract year used to define the minimum
   nonforfeiture amount shall be equal to 87.5 percent of the gross
   considerations credited to the contract during that contract year.

   3. The interest rate used in determining minimum nonforfeiture amounts shall
   be 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:
   				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 no longer than 15
   months prior to the contract issue date or redetermination date under this
   subdivision;
   				b. Reduced by 125 basis points;
   				c. Where the resulting interest rate is not less than 15 basis points
   (0.15 percent); and
   				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.

   4. During the period or term that a contract provides substantive
   participation in an equity indexed benefit, it may increase the reduction
   described in subdivision 3 b by up to an additional 100 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
   Commission may require a demonstration that the present value of the
   additional reduction does not exceed the market value of the benefit. Where
   administration is lacking or unacceptable, the Commission may, at its
   discretion, disallow or limit the additional reduction.

G. The Commission may adopt rules and regulations to implement the provisions of
subdivision F 4 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 for which the
Commission determines adjustments are justified.

HISTORY: 1979, c. 437, § 38.1-470.1; 1986, c. 562; 2003, c. 440; 2004, c. 313;
2022, c. 176.