Sec. 44.6. Availability of cash surrender values

(a) Cash surrender values shall be available under all contracts subject to section 4223 of the Insurance Law, except for the following:

(1) contracts issued by any life insurance or annuity company organized and operated, without profit to any private shareholder or individual, exclusively for the purpose of aiding educational or scientific institutions which are also organized and operated without profit, and which are issued only to or for the benefit of such institutions or individuals engaged in the service of such institutions;

(2) contracts issued to fund any benefits under a pension planwithin the meaning of the Employee Retirement Income Security Act of 1974;

(3) contracts issued to employers to fund deferred compensation arrangements;

(4) contracts issued to fund lotteries or other programs of states, municipalities, or agencies or instrumentalities thereof;

(5) structured settlements with payment deferred in accordance with a settlement of a lawsuit involving claims such as liability claims or medical malpractice claims; and

(6) such other contracts as specifically approved by the superintendent upon a demonstration that cash surrender benefits are not appropriate.

(b) Notwithstanding anything to the contrary, where contracts without cash surrender benefits are permitted, a market-value adjustment formula may be used for purposes of determining an amount for transfer, where a contractholder exercises a contract option, if any, to transfer an accumulation amount from the general account of the company to a separate account of the company.

(c) In contracts providing guaranteed rates and having cash surrender values at any time, an unadjusted cash surrender value must be available on each guaranteed benefit date and the specified time interval for any guaranteed rate shall not exceed 10 years. For example, a contract providing a guaranteed rate for five years must provide an unadjusted cash value at the end of the five years regardless of whether cash surrender values are available during the five years subject to a market-value adjustment and/or a withdrawal charge or such values with or without a withdrawal charge are not available prior to the end of five years.

(d) Contracts not providing guaranteed rates, but providing cash surrender values, must provide a cash surrender value without any market-value adjustment (but subject to any applicable withdrawal charge) at least once each year.