26-16-203(b), the following additional benefits payable shall be

26-16-203(b), the following additional benefits payable shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this article and are not required to be included in any paid-up nonforfeiture benefits:

(i) In case of death or dismemberment by accident or accidental means;

(ii) In case of total and permanent disability;

(iii) As reversionary annuity or deferred reversionary annuity benefits;

(iv) As term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this section would not apply;

(v) As term insurance on the life of a child provided in a policy on the life of a parent of the child, if the term insurance expires before the child's age is twenty-six (26), is uniform in amount after the child's age is one (1) and is not paid-up because of the death of a parent of the child; and

(vi) As other policy benefits additional to life insurance and endowment benefits, and premiums for all the additional benefits.

26-16-212. Applicability of article.

(a) This article does not apply to any:

(i) Reinsurance;

(ii) Group insurance;

(iii) Pure endowment;

(iv) Annuity or reversionary annuity contract;

(v) Term policy of uniform amount which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of twenty (20) years or less expiring before age seventy-one (71), for which uniform premiums are payable during the entire term of the policy;

(vi) Term policy of decreasing amount which provides no guaranteed nonforfeiture or endowment benefits and on which each adjusted premium, calculated as specified in W.S. 26-16-205 through 26-16-209, is less than the adjusted premium so calculated, on a term policy of uniform amount, or renewal thereof, which provides no guaranteed nonforfeiture or endowment benefits, issued at the same age, for the same initial amount of insurance, and for a term of twenty (20) years or less expiring before age seventy-one (71), for which uniform premiums are payable during the entire term of the policy;

(vii) Policy which provides no guaranteed nonforfeiture or endowment benefits and for which no cash surrender value or present value of paid-up nonforfeiture benefit at the beginning of the policy year and calculated as specified in W.S. 26-16-203(b) through 26-16-209, exceed two and one-half percent (2 1/2%) of the amount of insurance at the beginning of the policy year. For purposes of paragraph (vi) of this subsection and this paragraph, the age at expiration of a joint term life insurance policy is the age at expiration of the oldest life; or

(viii) Policy which is delivered outside this state through an agent or other representative of the insurer issuing the policy.

ARTICLE 3 NONFORFEITURE BENEFITS ON OLD POLICIES

26-16-301. Nonforfeiture benefits on old policies.

(a) In the case of policies referred to in W.S. 26-16-102 and issued prior to the operative date of article 2 of this chapter, there shall be a provision which, in case of default in premium payments after premiums are paid for three (3) years, shall secure to the policy owner, as a nonforfeiture benefit, a stipulated form of insurance, the net value of which is at least equal to the minimum life insurance reserve at the date of the default on the policy and on any dividend addition thereto, as required by article 2 of chapter 6 of this code, less a sum not more than two and one-half percent (2 1/2%) of the amount insured by the policy and of any existing dividend additions thereto, and less any existing indebtedness to the insurer on or secured by the policy.

(b) The net value specified in subsection (a) of this section shall be determined on the basis of a mortality table and rate of interest stated in the policy and acceptable for the valuation of the policy pursuant to the standard valuation law, except that if the mortality table is a more modern table than the American experience table of mortality, a mortality rate not more than one hundred thirty percent (130%) of the mortality rate according to the more modern table may be used in calculating any extended insurance, with accompanying pure endowment, if any, offered as a nonforfeiture benefit. If the mortality table used as the basis of determining the net value is the commissioners' 1958 standard ordinary mortality table, the mortality rates to be assumed in calculating any extended insurance, with accompanying pure endowment, if any, shall not be more than those shown in the commissioners' 1958 extended term insurance table.

(c) The provision specified in subsection (a) of this section shall:

(i) Stipulate that the policy may be surrendered to the insurer at its home office within one (1) month from date of default, for a specified cash value equal to the sum which would otherwise be available for the purchase of insurance as specified in subsection (a) of this section, and may stipulate that the insurer may defer payment for not more than six (6) months after the application therefor is made;

(ii) Contain a table showing the options available under the policy each year upon default in premium payments during the first twenty (20) years of the policy, or during the term of the policy whichever is shorter;

(iii) Not be required in term insurances of twenty (20) years or less or in industrial life insurance policies.

ARTICLE 4 STANDARD NONFORFEITURE LAW FOR INDIVIDUAL DEFERRED ANNUITIES

26-16-401. Short title.

This article is known as the "Standard Nonforfeiture Law For Individual Deferred Annuities".

26-16-402. Applicability of article.

(a) This article does not apply to any:

(i) Reinsurance;

(ii) Group annuity purchased under a retirement plan or plan of deferred compensation established or maintained by an employer, an employee organization, or both, other than a plan providing individual retirement accounts or annuities under Section 408 of the Internal Revenue Code;

(iii) Premium deposit fund;

(iv) Variable annuity;

(v) Investment annuity;

(vi) Immediate annuity;

(vii) Deferred annuity contract after annuity payments have commenced;

(viii) Reversionary annuity; or

(ix) Contract which is delivered outside this state through an agent or other representative of the company issuing the contract.

26-16-403. Contract provisions.

(a) In the case of contracts issued on or after the operative date of this article as defined in W.S. 26-16-411, no annuity contract, except as stated in W.S. 26-16-402, shall be delivered or issued for delivery in this state unless it contains in substance the following provisions, or corresponding provisions which the commissioner determines are at least as favorable to the contract holder, upon cessation of payment of considerations under the contract or upon the written request of the contract owner:

(i) The company shall grant a paid-up annuity benefit on a plan stipulated in the contract of a value as is specified in W.S. 26-16-405 through 26-16-409;

(ii) If a contract provides for a lump sum settlement at maturity, or at any other time, that upon surrender of the contract at or prior to the commencement of any annuity payments, the company shall pay instead of any paid-up annuity benefit a cash surrender benefit in an amount as is specified in W.S. 26-16-405, 26-16-406, 26-16-408 and 26-16-409, provided the company may reserve the right to defer the payment of the cash surrender benefit for a period not to exceed six (6) months after demand therefore with surrender of the contract and after making written request and receiving the written approval of the commissioner. The request shall address the necessity and equitability to all policyholders of the deferral;

(iii) A statement of the mortality table and interest rates used in calculating any minimum paid-up annuity, cash surrender or death benefits that are guaranteed under the contract, together with sufficient information to determine the amounts of those benefits;

(iv) A statement that any paid-up annuity, cash surrender or death benefits available under the contract are not less than the minimum benefits required by any statute of the state in which the contract is delivered and an explanation of the manner in which the benefits are altered by the existence of any additional amounts the company credits to the contract, any indebtedness to the company on the contract or any prior withdrawals from or partial surrenders of the contract;

(v) Any contract which does not provide cash surrender benefits or does not provide death benefits at least equal to the minimum nonforfeiture amount prior to the commencement of any annuity payments shall include a statement in a prominent place in the contract that those benefits are not provided;

(vi) Notwithstanding the requirements of this section, any deferred annuity contract may provide that if no considerations are received under a contract for a period of two (2) full years and the portion of the paid-up annuity benefit at maturity on the plan stipulated in the contract arising from considerations paid prior to the period would be less than twenty dollars ($20.00) monthly, the company, at its option, may terminate the contract by payment in cash of the then present value of the portion of the paid-up annuity benefit, calculated on the basis of the mortality table and interest rate specified in the contract for determining the paid-up annuity benefit, and by that payment is relieved of any further obligation under the contract.

26-16-404. Minimum nonforfeiture amounts upon which certain minimum values are to be based.

(a) The minimum values as specified in W.S. 26-16-405 through 26-16-409 of any paid-up annuity, cash surrender or death benefits available under an annuity contract shall be based upon minimum nonforfeiture amounts as defined in subsections (b) through (f) of this section.  (b) The minimum nonforfeiture amounts shall be governed by the following:

(i) The minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be equal to an accumulation up to that time at rates of interest as provided in subsection (e) of this section of the net considerations paid prior to that time decreased by the sum of any prior withdrawals from or partial surrenders of the contract accumulated at rates of interest provided in subsection (e) of this section, an annual contract charge of fifty dollars ($50.00), accumulated at rates of interest as provided in subsection (e) of this section, and any premium tax paid by the company for the contract, accumulated at rates of interest as provided in subsection (e) of this section, and the amount of any indebtedness to the company on the contract, including interest due and accrued. The net considerations for a given contract year used to define the minimum nonforfeiture amount shall be an amount equal to eighty-seven and one-half percent (87 ½%) of the gross considerations credited to the contract during that contract year;

(ii) For contracts issued on or after July 1, 2003, and before July 1, 2007, the provisions of paragraph (i) of this subsection apply, except that the minimum nonforfeiture amount shall be based upon a rate of interest of one and one-half percent (1.5%) per annum.

(c) Repealed By Laws 2006, Chapter 6, § 2.

(d) Repealed By Laws 2006, Chapter 6, § 2.

(e) The interest rate used in determining minimum nonforfeiture amounts shall be an annual rate of interest determined as follows:

(i) The lesser of three percent (3%) per annum and the following, which shall be specified in the contract if the interest rate will be reset:

(A) The five (5) year constant maturity treasury rate reported by the federal reserve as of a date, or average over a period, rounded to the nearest one-twentieth of one percent (.05%), specified in the contract no longer than fifteen (15) months prior to the contract issue date or redetermination date under paragraph (iii) of this subsection;  (B) Reduced by one hundred twenty-five (125) basis points.

(ii) Notwithstanding paragraph (i) of this subsection, the resulting interest rate shall not be less than fifteen one-hundredths of one percent (0.15%);

(iii) The interest rate shall apply for an initial period and may be redetermined for additional periods. The redetermination date, basis and period, if any, shall be stated in the contract. The basis is the date or average over a specified period that produces the value of the five (5) year constant maturity treasury rate to be used at each redetermination date.

(f) During the period or term that a contract provides substantive participation in an equity indexed benefit, it may increase the reduction described in subparagraph (e)(i)(B) of this section by up to an additional one hundred (100) basis points to reflect the value of the equity index benefit. The present value at the contract issue date, and at each redetermination date thereafter, of the additional reduction shall not exceed the market value of the benefit. The commissioner may require a demonstration that the present value of the additional reduction does not exceed the market value of the benefit. Lacking such a demonstration that is acceptable to the commissioner, the commissioner may disallow or limit the additional reduction.

(g) The commissioner may adopt rules to implement the provisions of subsection (f) of this section and to provide for further adjustments to the calculation of minimum nonforfeiture amounts for contracts that provide substantive participation in an equity index benefit and for other contracts that the commissioner determines are justified.

26-16-405. Present value of paid-up annuity benefits.

Any paid-up annuity benefit available under a contract shall be such that its present value on the date annuity payments are to commence is at least equal to the minimum nonforfeiture amount on that date. The present value shall be computed using the mortality table and the interest rate specified in the contract for determining the minimum paid-up annuity benefits guaranteed in the contract.  26-16-406. Calculating cash surrender benefits available prior to contract maturity.

(a) For contracts which provide cash surrender benefits, cash surrender benefits available prior to maturity shall not be less than an amount determined as follows:

(i) Determine the present value as of the date of surrender of that portion of the maturity value of the paid-up annuity benefit which would be provided under the contract at maturity, arising from considerations paid prior to the time of cash surrender;

(ii) The amount determined in paragraph (i) of this subsection shall be reduced by the amount appropriate to reflect any prior withdrawals from or partial surrenders of the contract with the present value being calculated on the basis of an interest rate not more than one percent (1%) higher than the interest rate specified in the contract for accumulating the net considerations to determine the maturity value;

(iii) The amount determined in paragraph (ii) of this subsection shall be decreased by the amount of any indebtedness to the company on the contract, including interest due and accrued; and

(iv) The amount determined in paragraph (iii) of this subsection shall be increased by any existing additional amounts credited by the company to the contract. In no case shall any cash surrender benefit be less than the minimum nonforfeiture amount at that time. The death benefit under the contracts shall be at least equal to the cash surrender benefit.

26-16-407. Minimum paid-up annuity benefit available as a nonforfeiture option.

For contracts which do not provide cash surrender benefits, the present value of any paid-up annuity benefit available as a nonforfeiture option at any time prior to maturity shall not be less than the present value of that portion of the maturity value of the paid-up annuity benefit provided under the contract arising from considerations paid prior to the time the contract is surrendered in exchange for, or changed to, a deferred paid-up annuity, with the present value being calculated for the period prior to the maturity date on the basis of the interest rate specified in the contract for accumulating the net considerations to determine the maturity value, and increased by any existing additional amounts credited by the company to the contract. For contracts which do not provide any death benefits prior to the commencement of any annuity payments, the present values shall be calculated on the basis of the interest rate and the mortality table specified in the contract for determining the maturity value of the paid-up annuity benefit. The present value of a paid-up annuity benefit shall not be less than the minimum nonforfeiture amount at that time.

26-16-408. Annuity contract optional maturity dates.

For the purpose of determining the benefits calculated under W.S. 26-16-406 and 26-16-407 in the case of annuity contracts under which an election may be made to have annuity payments commence at optional maturity dates, the maturity date is the latest date for which election is permitted by the contract, but not later than the anniversary of the contract immediately following the annuitant's seventieth birthday or the tenth anniversary of the contract, whichever is later.

26-16-409. Calculating benefits under contracts with fixed schedule considerations.

Any paid-up annuity, cash surrender or death benefits available at any time, other than on the contract anniversary, under any contract with fixed scheduled considerations, shall be calculated with allowance for the lapse of time and the payment of any scheduled considerations beyond the beginning of the contract year in which cessation of payment of considerations under the contract occurs.

26-16-410. Calculating minimum annuity and life insurance nonforfeiture benefits when included by rider or supplemental contract provision.

For any contract which provides therein, by rider or supplemental contract provision, both annuity benefits and life insurance benefits that exceed the greater of cash surrender benefits or a return of the gross considerations with interest, the minimum nonforfeiture benefits shall be equal to the sum of the minimum nonforfeiture benefits for the annuity portion and the minimum nonforfeiture benefits, if any, for the life insurance portion computed as if each portion were a separate contract. Notwithstanding W.S. 26-16-405 through 26-16-409 additional benefits payable in case of total and permanent disability, as reversionary annuity or deferred reversionary annuity benefits or as other policy benefits additional to life insurance, endowment and annuity benefits, and considerations for all those additional benefits, shall be disregarded in ascertaining the minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits required by this article. The inclusion of the additional benefits is not required in any paid-up benefits, unless the additional benefits separately would require minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits.

26-16-411. Operative date of article.

(a) After May 20, 1981, any company may file with the commissioner a written notice of its election to comply with this article after a specified date before May 20, 1983. After filing the notice, then upon the specified date, which is the operative date of this article for that company, this article is operative with respect to annuity contracts thereafter issued by that company. If a company does not make an election, the operative date of this article for that company is May 20, 1983.

(b) Beginning July 1, 2006, any company may elect to apply the provisions of this article on a contract form by contract form basis to all annuity contracts thereafter issued.

(c) On or after July 1, 2007, this article is operative with respect to all annuity contracts thereafter issued.

ARTICLE 5 MISCELLANEOUS PROVISIONS

26-16-501. Incontestability and limitation of liability after reinstatement.

(a) A reinstated life insurance policy or annuity contract may be contested because of fraud or misrepresentation of facts material to the reinstatement only for the same period following reinstatement and with the same conditions and exceptions as the policy provides for contestability after original issuance.

(b) If any life insurance policy or annuity contract is reinstated, the reinstated policy or contract may exclude or restrict liability to the same extent that the liability could have been or was excluded or restricted when the policy or contract was originally issued. The exclusion or restriction is effective from the date of reinstatement.  26-16-502. Allocation to separate accounts to provide for life insurance or annuities; regulation of variable contracts.

(a) A domestic life insurer may establish one (1) or more separate accounts and may allocate to those accounts amounts, including without limitation proceeds applied under optional modes of settlement or under dividend options, to provide for life insurance or annuities and benefits incidental thereto, payable in fixed or variable amounts or both, subject to the following:

(i) The income and any gains and losses from assets allocated to a separate account shall be credited to or charged against the account, without regard to the insurer's other income, gains or losses;

(ii) Except as may be provided with respect to reserves for guaranteed benefits and funds referred to in paragraph (iii) of this subsection, amounts allocated to any separate account and accumulations thereon may be invested and reinvested without regard to any requirements or limitations prescribed by the laws of this state governing the investments of life insurance companies, and the investments in the separate accounts shall not be considered in applying the investment limitations otherwise applicable to the insurer's investments;

(iii) Except with the commissioner's approval and under conditions he prescribes as to investments and other matters, which conditions shall recognize the guaranteed nature of the benefits provided, reserves for benefits guaranteed as to dollar amount and duration and funds guaranteed as to principal amount or stated rate of interest shall not be maintained in a separate account;

(iv) Unless the commissioner otherwise approves:

(A) Assets allocated to a separate account shall be valued at their market value on the date of valuation, or if there is no readily available market, then as provided under the terms of the contract or the rules or other written agreement applicable to the separate account;

(B) The portion, if any, of the assets of the separate account which are equal to the insurer's reserve liability with regard to the guaranteed benefits and funds referred to in paragraph (iii) of this subsection shall be valued in accordance with the rules otherwise applicable to the insurer's assets.

(v) The insurer shall own amounts allocated to a separate account under this section and shall not be nor hold itself out to be a trustee with respect to those amounts;

(vi) If and to the extent provided under the applicable contracts, that portion of the assets of any separate account equal to the reserves and other contract liabilities with respect to the account are not chargeable with liabilities arising out of any other business the insurer conducts;

(vii) No insurer shall sell, exchange or otherwise transfer its assets between any of its separate accounts, or between any other investment account and one (1) or more of its separate accounts unless:

(A) In case of a transfer into a separate account, the transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made;

(B) The transfer, whether into or from a separate account, is made by a transfer of cash or by a transfer of securities having a readily determinable market value; and

(C) The commissioner approves the transfer of securities, provided the commissioner may approve other transfers among the accounts if, in his opinion, the transfers are not inequitable.

(viii) To the extent deemed necessary to comply with any applicable federal or state laws, the insurer, with respect to any separate account, including without limitation any separate account which is a management investment company or a unit investment trust, may provide for persons having an interest therein appropriate voting and other rights and special procedures for the conduct of the business of the account, including special rights and procedures relating to investment policy, investment advisory services, selection of independent public accountants and the selection of a committee, the members of which need not be otherwise affiliated with the insurer, to manage the business of the account.

(b) Any contract providing benefits payable in variable amounts delivered or issued for delivery in this state shall contain a statement of the essential features of the procedures the insurer is to follow in determining the dollar amount of the variable benefits. The contract under which the benefits vary to reflect investment experience, including a group contract and any certificate in evidence of variable benefits issued thereunder, shall state that the dollar amount will vary and shall contain on its first page a statement to the effect that the benefits thereunder are on a variable basis.

(c) No insurer shall deliver or issue for delivery within this state variable contracts unless it is licensed to do a life insurance or annuity business in this state, and the commissioner is satisfied that its condition or method of operation in connection with the issuance of the contracts will not render its operation hazardous to the public or its policyholders in this state. In this connection, the commissioner shall consider among other things:

(i) The insurer's history and financial condition;

(ii) The character, responsibility and fitness of the insurer's officers and directors; and

(iii) The law and regulation under which the insurer is authorized in the state of domicile to issue variable contracts. The state of entry of an alien insurer is its place of domicile for this purpose. If the insurer is a subsidiary of an admitted life insurer, or affiliated with that insurer through common management or ownership, it may be deemed by the commissioner to have met the provisions of this subsection if either it or the parent or the affiliated insurer meets the requirements thereof.

(d) Notwithstanding any other provision of law, the commissioner has sole authority to:

(i) Regulate the issuance and sale of variable contracts; and

(ii) Issue reasonable rules and regulations appropriate to carry out the purposes of this section.

(e) Except for W.S. 26-16-117(a), (b) and (g), 26-16-118 and article 2 of this chapter in the case of a variable annuity contract and W.S. 26-16-103, 26-16-108 through 26-16-110,