(1) Where the application for an annuity contract is taken in a face-to-face meeting, the applicant shall at or before the time of application be given both the disclosure document described in (2) and the Buyer's Guide contained in Appendix A.
(a) Where 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.
(i) 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 shall be deemed to satisfy 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 shall be deemed to satisfy the requirement that the disclosure document be provided no later than five business days after receipt of the application.
(ii) With respect to an application received via the internet:
(A) Taking reasonable steps to make the Buyer's Guide available for viewing and printing on the insurer's web site shall be deemed to satisfy 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 web site shall be deemed to satisfy the requirement that the disclosure document be provided no later than five business days after receipt of the application.
(iii) A solicitation for an annuity contract provided in other than a face-to-face meeting shall include a statement that the proposed applicant may contact the insurance department of the state for a free annuity Buyer's Guide. In lieu of the foregoing statement, an insurer may include a statement that the prospective applicant may contact the insurer for a free annuity Buyer's Guide.
(b) Where the Buyer's Guide and disclosure document are not provided at or before the time of application, a free look period of no less than 15 days shall be provided for the applicant to return the annuity contract without penalty. This free look shall run concurrently with any other free look provided under state law or regulation.
(2) The State Auditor's Office hereby adopts and incorporates by reference the appendix titled "Buyer's Guide" including the section title "Equity-indexed Annuities," which is contained in the National Association of Insurance Commissioners' Annuity Disclosure Model Regulation, adopted April 1999. Copies of this appendix are available for public inspection at the office of the Commissioner of Insurance, 840 Helena Avenue, Helena, MT 59601. A copy of this appendix may be obtained by writing to the State Auditor's Office, Legal Department, 840 Helena Avenue, Helena, Montana 59601.
(3) At a minimum, the following information shall be included in the disclosure document required to be provided under this rule:
(a) the generic name of the contract, the company 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 where appropriate:
(i) the guaranteed, nonguaranteed and determinable elements of the contract, and their limitations, if any, and an explanation of how they operate;
(ii) 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;
(iii) periodic income options both on a guaranteed and nonguaranteed basis;
(iv) any value reductions caused by withdrawals from or surrender of the contract;
(v) how values in the contract can be accessed;
(vi) the death benefit, if available and how it will be calculated;
(vii) a summary of the federal tax status of the contract and any penalties applicable on withdrawal of values from the contract; and
(viii) impact of any rider, such as long term care rider.
(d) specific dollar amount or percentage charges and fees shall be listed with an explanation of how they apply; and
(e) information about the current guaranteed rate for new policies that contains a clear notice that the rate is subject to change.
(4) Insurers shall 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.