(a) Where the application for an annuity contract is taken:

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Terms Used In Hawaii Revised Statutes 431:10D-603

  • 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.
  • Determinable elements: means elements that are derived from processes or methods that are guaranteed at issue and not subject to company discretion but where the values or amounts cannot be determined until some point after issue. See Hawaii Revised Statutes 431:10D-601
  • Disclosure document: means a document provided by an insurer to applicants or prospective applicants for an annuity contract that explains the terms of the contract and contains the information required in section 431:10D-603(d). See Hawaii Revised Statutes 431:10D-601
  • Generic name: means a short title descriptive of the annuity contract being applied for or illustrated, such as "single premium deferred annuity". See Hawaii Revised Statutes 431:10D-601
(1) In a personal meeting, both the buyer’s guide and disclosure document shall be given to the applicant at or before the time of application;
(2) By means other than in a personal meeting, both the buyer’s guide and disclosure document shall be sent to the applicant no later than five business days after the completed application is received by the insurer;
(3) By means of a direct solicitation through the mail, providing both the buyer’s guide and disclosure document in the mailing inviting the prospective applicant to apply for the annuity contract shall be deemed to satisfy the requirement that the buyer’s guide and disclosure statement be provided no later than five business days after receipt of the application; and
(4) By means of the insurer’s internet website, the insurer’s reasonable steps to make the buyer’s guide available for viewing and printing on the insurer’s website shall be deemed to satisfy the requirement that the buyer’s guide and disclosure statement be provided no later than five business days after receipt of the application.
(b) A solicitation for an annuity contract provided in other than a personal meeting shall include a statement that the prospective applicant may contact the insurance division for a free 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 buyer’s guide.
(c) If 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 fifteen days shall be provided for the applicant to return the annuity contract without penalty, which period shall run consecutively with any other free-look period provided by law.
(d) The disclosure document shall include at least the following information:

(1) The generic name of the contract;
(2) The company product name, if different from the generic name;
(3) The form number;
(4) The fact that the product is an annuity;
(5) The insurer’s name and address;
(6) A description of the contract and its benefits, which shall emphasize its long-term nature and include examples, where appropriate, such as:

(A) The guaranteed, non-guaranteed, and determinable elements of the contract, their limitations, if any, and an explanation of how they operate; and
(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;
(7) Periodic income options on both a guaranteed and non-guaranteed basis;
(8) Any value reductions caused by withdrawals from or surrender of the contract;
(9) How values in the contract can be accessed;
(10) The death benefit, if available, and how it will be calculated;
(11) A summary of the federal tax status of the contract and any penalties applicable on withdrawal of values from the contract;
(12) The effect of any rider, such as a long-term-care rider;
(13) A listing of specific dollar-amount or percentage charges and fees and an explanation of how they apply; and
(14) Information about the current guaranteed rate for new contracts that contains a clear notice that the rate is subject to change.
(e) Insurers shall define terms used in the disclosure statement in language that facilitates comprehension by the average person within the segment of the public to which the disclosure statement is directed.

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