1.1 	A bill for an act
1.2 	relating to insurance; prohibiting annuity contracts from penalizing death as 
1.3 	forfeiture or surrender of the contract;amending Minnesota Statutes 2008, 
1.4 	section 61A.245, subdivision 3.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2008, section 61A.245, subdivision 3, is amended to 
1.7 	read:
1.8 		Subd. 3.Required contract provisions. (a) In the case of contracts issued on or 
1.9 	after the operative date specified in subdivision 12, no contract of annuity, except as stated 
1.10 	in subdivision 2, shall be delivered or issued for delivery in this state unless it contains 
1.11 	in substance the following provisions, or corresponding provisions which in the opinion 
1.12 	of the commissioner are at least as favorable to the contract holder, upon cessation of 
1.13 	payment of considerations under the contract:
1.14 	(1) that upon cessation of payment of considerations under a contract, or upon the 
1.15 	written request of the contract owner, the company shall grant a paid-up annuity benefit on 
1.16 	a plan stipulated in the contract of the value specified in subdivisions 5, 6, 7, 8 and 10;
1.17 	(2) if a contract provides for a lump sum settlement at maturity, or at any other 
1.18 	time, that upon surrender of the contract at or prior to the commencement of any annuity 
1.19 	payments, the company shall pay in lieu of any paid-up annuity benefit a cash surrender 
1.20 	benefit of the amount specified in subdivisions 5, 6, 8 and 10. The company may reserve 
1.21 	the right to defer the payment of the cash surrender benefit for a period not to exceed 
1.22 	six months after demand therefor with surrender of the contract after making a written 
1.23 	request and receiving written approval of the commissioner. The request must address the 
1.24 	necessity and equitability to all contract holders of the deferral;
2.1 	(3) a statement of the mortality table, if any, and interest rates used in calculating any 
2.2 	minimum paid-up annuity, cash surrender or death benefits that are guaranteed under the 
2.3 	contract, together with sufficient information to determine the amounts of the benefits; and
2.4 	(4) a statement that any paid-up annuity, cash surrender or death benefits that may 
2.5 	be available under the contract are not less than the minimum benefits required by any 
2.6 	statute of the state in which the contract is delivered and an explanation of the manner in 
2.7 	which the benefits are altered by the existence of any additional amounts credited by the 
2.8 	company to the contract, any indebtedness to the company on the contract or any prior 
2.9 	withdrawals from or partial surrenders of the contract.
2.10 	(b) Notwithstanding the requirements of this subdivision, any deferred annuity 
2.11 	contract may provide that if no considerations have been received under a contract for 
2.12 	a period of two full years and the portion of the paid-up annuity benefit at maturity on 
2.13 	the plan stipulated in the contract arising from considerations paid prior to that period 
2.14 	would be less than $20 monthly, the company may at its option terminate the contract by 
2.15 	payment in cash of the then present value of the portion of the paid-up annuity benefit, 
2.16 	calculated on the basis of the mortality table, if any, and interest rate specified in the 
2.17 	contract for determining the paid-up annuity benefit, and by the payment shall be relieved 
2.18 	of any further obligation under the contract.
2.19 	(c) Notwithstanding any other provision of this section, an individual deferred 
2.20 	annuity contract must provide that, upon notice to the company of the death of the contract 
2.21 	holder prior to the beginning of annuity payments, the company shall promptly pay to 
2.22 	the contract holder's beneficiaries the full value of the annuity contract as of the date of 
2.23 	death, plus interest on that amount from the date of death at a rate stated in the contract. 
2.24 	The contract must not treat death as a surrender of the annuity contract or otherwise 
2.25 	impose a forfeiture penalty.

2.26 	EFFECTIVE DATE. This section is effective retroactively from January 1, 2009, 
2.27 	and applies to annuity contracts issued on or after that date.