DEPARTMENT OF BANKING AND INSURANCE
DIVISION OF INSURANCE
Adopted Amendments: N.J.A.C. 11:4-40.3, 40.5 and 40.9
Proposed: July 2, 2001 at 33 N.J.R. 2263(a)
Adopted: October 12, 2001, by Donald Bryan, Acting Commissioner for Insurance, Department of Banking and Insurance.
Filed: October 15, 2001 as R. 2001 d. 408, without change.
Authority: N.J.S.A. 17:1-8.1 and 17:1-15e.
Effective Date: November 5, 2001
Expiration Date: November 30, 2005.
Summary of Public Comments and Agency Responses:
The Department received four comments from the American Council of Life Insurers (ACLI), Metropolitan Life Insurance Company, AEGON Institutional Markets Inc., and Prudential Insurance Company of America.
COMMENT: All four commenters expressed their support for the Department's proposed amendments. One of the commenters entirely agreed with the Department's observation made in the proposal Summary that the prior approval process provides no meaningful protection to policyholders when applied to group annuities and funding agreements. The commenters further applauded the Department's recognition that the proposed amendments will be advantageous to both insurers and the well-represented, sophisticated policyholders that purchase group annuities and funding agreements because of the increased speed with which they will be able to enter the market.
RESPONSE: The Department appreciates the commenter's support.
COMMENT: One commenter stated that the Department's proposed amended text does not specifically mention funding agreements though it is clearly the Department's intent to include them. The commenter pointed out that non-domestic insurers may not be clear on this intent due to their experience with other state insurance departments. The commenter suggested including additional language to clarify that funding agreements are also exempt from compliance with N.J.A.C. 11:4-40, and defining "funding agreement" as "an insurance company agreement with an entity (not an individual) providing for payments which are not life contingent."
RESPONSE: It is the Department's position that funding agreements are a form of annuity, and therefore do not need to be specifically mentioned or defined.
Federal Standards Statement
A Federal standards analysis is not required because these adopted amendments are not subject to any Federal standards or requirements.
Full text of the adoption follows: