Applications received on or after January 1, 2010 for EquiTrust index annuities and Certainty Select (MYGA) will be issued with a revised Market Value Adjustment (MVA) calculation.  The revision does not apply to existing contracts or applications received prior to January 1, 2010. 

The Market Value Adjustment is a positive or negative adjustment that may apply to contract values only if the withdrawal amount exceeds the free withdrawal provision during the surrender charge period. The MVA is determined by a mathematical formula that measures changes in the interest rate environment since the contract was issued. 

The new MVA factor will be limited to the difference between the current rate and the guaranteed rate.  For index annuities, the new calculation will be based on credited rates offered within the contract. Previously, the calculation used the Treasury Constant Maturity Series.

For more information, click below to see client-use MVA education pieces...
     Understanding the MVA - Index Annuities
        Understanding the MVA - Certainty Select

For index annuities, please use the new Disclosure forms dated 1-10 beginning 1/1/10. The new Disclosures will be required for index applications received on or after 2/1/10.

Revised Agent Guides are available at the Sales Tools link and printed versions will be available soon.

South Carolina Certainty Select Changes
 
In addition to the MVA change identified above, the product design of the Certainty Select will be revised effective 1/1/2010. In the new design, at the end of the Initial Rate Guarantee Period the contract will default into a 1-Year Rate Period where there will be no Market Value Adjustment or Surrender Charge. Alternatively, the client may choose to re-enter the Rate Guarantee Period, which will restart the Surrender Charge and Market Value Adjustment. In addition, this revised Certainty Select design will include lower surrender charges and will be the same for the Certainty Select base contract and the optional rider.

The new Certainty Select Disclosure, form ET-MYG-1101SC (01-10), will be required for applications received after 1/1/10.

New Certainty Select South Carolina specific Agent Guide ET-MYG-1102SC and Client Brochure ET-MYG-1100SC are available at the Sales Tools link and printed versions will be available soon.