OAR 836-051-0915: Standards for the Disclosure Document and Buyer’s Guide

(1) When the application for an annuity contract is taken in a face-to-face meeting, the applicant shall be given, at or before the time of application, both the disclosure document described in section (6) of this rule and the Buyer’s Guide contained in Exhibit 1 to this rule. (2) When the application for an annuity contract is taken by means other than in a face-to-face meeting, the applicant shall be sent both the disclosure document and the Buyer’s Guide no later than five business days after the completed application is received by the insurer. The following provisions apply to the requirement in this section: (a) With respect to an application received as a result of a direct solicitation through the mail: (A) Providing a Buyer’s Guide in a mailing inviting prospective applicants to apply for an annuity contract satisfies the requirement that the Buyer’s Guide be provided no later than five business days after receipt of the application. (B) Providing a disclosure document in a mailing inviting a prospective applicant to apply for an annuity contract satisfies the requirement that the disclosure document be provided no later than five business days after receipt of the application. (b) With respect to an application received through the Internet: (A) Taking reasonable steps to make the Buyer’s Guide available for viewing and printing on the insurer’s website satisfies the requirement that the Buyer’s Guide be provided no later than five business days of receipt of the application. (B) Taking reasonable steps to make the disclosure document available for viewing and printing on the insurer’s website satisfies the requirement that the disclosure document be provided no later than five business days after receipt of the application. (c) A solicitation for an annuity contract provided in other than a face-to-face meeting must include a statement that the proposed applicant may contact the insurance department of the state for a free annuity Buyer’s Guide, except that alternatively, an insurer may include a statement that the prospective applicant may contact the insurer for a free annuity Buyer’s Guide. (3) When the Buyer’s Guide and disclosure document are provided at delivery of the contract and are not provided at or before the time of application, a free look period of no less than 15 days must be provided for the applicant to return the annuity contract without penalty. This free look runs concurrently with the free look provided under the contract. (4) When the Buyer’s Guide and disclosure document are provided at the time of application, a free look period of no less than ten days must be provided to enable the contract owner to examine the contract with the disclosure document and return the annuity contract without penalty if not satisfied. (5) For the purpose of this rule, a “Buyer’s Guide” is the document in Exhibit 1 to this rule or the most current version adopted by the NAIC, or other published descriptions that are similar in nature approved by the Director. Companies may purchase personalized brochures from the NAIC or reproduce the Buyer’s Guide in their own type, style and format. Any description of an annuity feature in the Buyer’s Guide is for general education and does not imply that all features are acceptable for filing under Oregon standards. (6) At a minimum, the following information shall be included in the disclosure document required to be provided under OAR 836-051-0900 to 836-051-0925: (a) The generic name of the contract, the insurer product name, if different, and form number, and the fact that it is an annuity; (b) The insurer’s name and address; (c) A description of the contract and its benefits, emphasizing its long-term nature, including examples when appropriate, as follows: (A) The guaranteed, non-guaranteed and determinable elements of the contract, and their limitations, if any, and an explanation of how they operate; (B) An explanation of the initial crediting rate, specifying any bonus or introductory portion, the duration of the rate and the fact that rates may change from time to time and are not guaranteed; (C) Periodic income options both on a guaranteed and non-guaranteed basis; (D) Any value reductions caused by withdrawals from or surrender of the contract, and also a dollar-figure statement, which may be specific to the contract or given as an example using round numbers, of the maximum effect of penalties, surrender charges, market value adjustments and any other adjustments owing to a withdrawal or surrender; (E) How values in the contract can be accessed; (F) The death benefit, if available and how it will be calculated; (G) A summary of the federal tax status of the contract and any penalties applicable on withdrawal of values from the contract; and (H) The impact of any rider, such as a long-term care rider. (d) The specific dollar amount or percentage charges and fees, which shall be listed with an explanation of how they apply. (e) Information about the current guaranteed rate for new contracts, with a clear notice that the rate is subject to change. (7) An insurer must define terms used in the disclosure statement in language that facilitates the understanding by a typical person within the segment of the public to which the disclosure statement is directed.