North Dakota Code 54-52.6-05.1 – Annuity provider – Qualifications
(Effective after December 31, 2024) 1. The board shall select one or more annuity providers to provide the annuity options under this chapter.
Terms Used In North Dakota Code 54-52.6-05.1
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Contract: A legal written agreement that becomes binding when signed.
- following: when used by way of reference to a chapter or other part of a statute means the next preceding or next following chapter or other part. See North Dakota Code 1-01-49
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See North Dakota Code 1-01-49
- written: include "typewriting" and "typewritten" and "printing" and "printed" except in the case of signatures and when the words are used by way of contrast to typewriting and printing. See North Dakota Code 1-01-37
2. In selecting an annuity provider under this section, the board shall:
a. Determine whether the annuity provider and the provider’s subsidiaries and affiliates have appropriate financial strength and stability at the time of selection and during the term of contract with the board.
(1) The board may require the provider to provide the board with written representation:
(a) The provider is in compliance with title 26.1.
(b) The provider at the time of selection is and for each of the preceding seven years was in compliance and good standing with the insurance commissioner of the provider’s domiciliary state and the provider is not operating under an order of rehabilitation or liquidation.
(c) The provider maintains and has maintained reserves that satisfy the statutory requirements of each state in which the provider does business.
(2) The board may require a provider selected by the board to provide annuities under this chapter to notify the board of a change of circumstances resulting in the provider failing to meet any of the requirements under paragraph 1.
(3) The board must have determined the provider has a claims paying ability rating that meets standards adopted by the board.
b. Determine whether the annuity provider is able to provide contracted rights and benefits to a participating member.
c. Determine whether the costs, including fees and commissions, of the annuity options in relation to the benefits and product features of the annuity options are reasonable.
d. Determine whether the administrative services to be provided under the annuity option are appropriate. At a minimum the administrative services must include periodic reports to the board.
e. Determine whether the annuity provider is experienced in paying lifetime retirement income through annuities offered to public employee defined contribution retirement plans.
f. Determine whether the annuity provider offers a menu of annuity options that meet the following conditions:
(1) The annuity options are suitable for participating members and beneficiaries.
(2) The contract terms and income benefits are clearly stated, based on reasonable assumptions.
(3) The menu of annuity options offers a range of lifetime income options.
(4) If an annuity is a variable annuity, the annuity offers a fixed account option along with a variable option.
g. Determine whether the annuity provider offers objective and participant-specific education and tools to help a participating member understand the appropriate use of annuities as a long-term retirement savings vehicle.