Virginia Code 38.2-3117.4: Disclosures for retained asset accounts to beneficiaries
The insurer shall provide the following written disclosures to the beneficiary of a policy before the retained asset account is selected, if optional, or established, if not optional:
Terms Used In Virginia Code 38.2-3117.4
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Insurer: means an insurance company licensed in the Commonwealth that offers retained asset accounts for death benefits. See Virginia Code 38.2-3117.1
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Policy: means any policy or certificate of insurance that provides a death benefit. See Virginia Code 38.2-3117.1
- Retained asset account: means any mechanism whereby the settlement of proceeds payable under a life insurance policy is accomplished by the insurer or an entity acting on behalf of the insurer depositing the proceeds into an account with check or draft writing privileges where those proceeds are retained by the insurer pursuant to a supplementary contract not involving annuity benefits. See Virginia Code 38.2-3117.1
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- State: means any commonwealth, state, territory, district or insular possession of the United States. See Virginia Code 38.2-100
1. Payment of the full benefit amount is accomplished by delivery of the draft book or check book;
2. One draft or check may be written to access the entire amount, including interest, of the retained asset account at any time;
3. Whether other available settlement options are preserved until the entire balance is withdrawn or the balance drops below the insurer’s minimum balance requirements;
4. A statement identifying the account as either a checking account or a draft account and an explanation of how the account works;
5. Information about the account services provided and contact information where the beneficiary may request and obtain more details about such services;
6. A description of fees charged, if applicable;
7. The frequency of statements showing the current account balance, the interest credited, drafts or checks written, and any other account activity;
8. The minimum interest rate to be credited to the account and how the actual interest rate will be determined;
9. The interest earned on the account may be taxable;
10. Retained asset account funds held by insurance companies are not insured by the Federal Deposit Insurance Corporation but are guaranteed by the state guaranty association. The beneficiary should be advised to contact the National Organization of Life and Health Insurance Guaranty Associations via the association’s website to learn more about the coverage limitations to the account under a state guaranty association; and
11. A description of the insurer’s policy regarding retained asset accounts that become inactive.