Relating to the exchange or surrender of an annuity contract.

Contracts

• TPA Agreements: Master Services Agreements (MSAs) with Third-Party Administrators must be amended immediately. You must tighten Service Level Agreements (SLAs) to require processing within 20 business days (leaving a 10-day buffer for banking). Add indemnification clauses holding the TPA liable for the 10% interest penalty if delays are due to their administrative failure.
• Policy Forms: Legal must review existing annuity contracts. The statute allows for delays if the contract contains a specific deferral provision (e.g., a 6-month deferral right). If your contracts lack this language, you are bound strictly by the 30-day limit.

Hiring/Training

• Claims & Surrender Teams: Staff must be trained to identify "deficient" requests immediately. The 30-day clock only pauses if you notify the requester that information is missing.
• SIU/Fraud Teams: Training is required on the "reasonable suspicion" exception. Staff cannot informally delay payment for investigation; a formal file must be opened and documented to justify exceeding the 30-day window.

Reporting & Record-Keeping

• Timestamping: You must implement precise "Date of Receipt" timestamping on all inbound mail and digital portals. This timestamp is the evidentiary basis for penalty calculations.
• The 5-Day Acknowledgement: For exchanges, you must generate and send the required consumer acknowledgement letter within 5 business days of receiving the exchange notice.
• Deficiency Logs: You must maintain a granular log of when deficiency notices are sent to contract owners. Without this record, you cannot prove the 30-day clock was paused.

Fees & Costs

• Statutory Penalty: Failure to pay within 30 business days triggers an automatic penalty of 10% annual interest on the unpaid amount, accruing from the first day of delinquency. This is a strict liability cost, not a discretionary fine.