Product Specification#

Status: Draft, 2026-08-04; AP&P Manual appendix material added 2026-08-06. All cited sources accessed 2026-08-04 except REG-R151 (AG 33) and REG-R156 (A-250), accessed 2026-08-06.

Scope note. This is a standardized composite specification assembled for reference liability cash-flow modeling of a U.S. individual deferred variable annuity (VA) carrying a guaranteed lifetime withdrawal benefit (GLWB/GMWB) and a guaranteed minimum death benefit (GMDB). It does not describe any single insurer’s product. Tag conventions: [S#]/[R#] resolve against the product research file _research/variable-annuity.md (its own local numbering: S1–S8 product documents, R1–R13 regulatory/actuarial references). [REG-R#] resolves against the single shared cross-product numbering space R1–R157 curated at references/regulatory-and-actuarial-references.md; R1–R34 originate in _research/regulatory-actuarial.md (life-origin, several of which also bind annuities), R35–R72 in _research/regulatory-actuarial-annuities.md (annuity-specific) and R151–R157 in the AP&P Manual appendix extractions read at first hand on 2026-08-06 (AG 33 REG-R151 and A-250 REG-R156 are the two cited here), with most of the R73–R149 block unused — one tag prefix, one numbering space. std marks a standardization introduced for the reference implementation; every std table row carries a footnote giving the rationale and the observed range across insurers. unverified marks a claim the research file could not confirm against a retrieved document; such flags are carried forward, never quietly dropped.

Implementation anchor. One carrier’s flexible-premium deferred VA chassis — statutory prospectus dated April 28, 2025 [S1], initial summary prospectus [S2], rate sheet supplement dated April 27, 2026 [S3] — because it is the most contractually explicit disclosure in the set and exercises every mechanic a general VA model needs [S1]. Two documented variants ride alongside: a second carrier’s VIX-linked non-discretionary rider fee formula [S4] [S6] and a third’s formula-linked roll-up rate (10-year CMT + 1.00%, floored 4%, capped 8%) [S7].

Product overview and market role#

A deferred VA has two phases: accumulation and income. Once annuitized, withdrawals and surrender cease and — with rider-specific exceptions — death and living benefits terminate [S2] [S4] [S6] [S7] [S8]. During accumulation, premium net of any premium tax buys units in subaccounts of a registered separate account, each investing in one underlying fund (“Investment Divisions” [S1] [S2]; “Variable Portfolios” [S4] [S6]; “variable investment options” [S7]; “Subaccounts” [S8]). Contract value follows fund performance with no insurer guarantee; the guarantees are sold as riders tracked on shadow benefit bases that do not follow the market down. The economic content is therefore an investment wrapper plus two written options: a GLWB (a lifetime payment stream funded by the insurer once the account is exhausted) and a GMDB (a floor under the death benefit). Both are path-dependent guarantees on a separate-account balance — which is why their cost cannot be established deterministically and why the statutory reserve for the whole contract is a stochastic CTE70 measure under VM-21 R1 REG-R35.

VAs are federally registered securities sold on SEC Form N-4 R6 REG-R52, with layered disclosure under Rule 498A (Initial and Updating Summary Prospectuses and a mandatory Key Information Table) R7 REG-R50 REG-R51. Modern writers reset GLWB payout percentages, bonus percentages and rider charges through rate sheet prospectus supplements filed on Form 497 rather than by amending the prospectus [S3] [S5] — a structural fact any model of this product must accommodate, because the parameter set is versioned by rate-sheet date, not by product name.

Representative specification#

Contract identity and issue rules#

Parameter	Representative value	Basis
Design type	Individual flexible-premium deferred variable annuity, non-participating	[S1] [S2]
Funding	Separate account only; general-account Fixed Account Options not available with the elected Roll-up GMDB	[S1]
Subaccounts modeled	2 (one diversified equity, one fixed income)	std (1)
Allocation	60% equity / 40% fixed income, no rebalancing	std (1)
Tax status	Non-qualified	std (2)
Maximum issue age	85	[S1]
Anchor model cell	Male, issue age 60, single Designated Life	std (3)
Premium pattern	Single premium $100,000 at issue	std (4)
Minimum initial premium	$10,000 non-qualified; $5,000 qualified	[S2]
Minimum subsequent premium	$500 ($50 under an automatic payment plan)	[S2]
Maximum total premiums	$1,000,000 without prior approval	[S2]
Premium tax	0.00% in the base model, within an observed 0.0%–3.5% state range	std (5); range [S2]
Latest Income Date	Contract Anniversary on which the Owner is age 95	[S2]

Footnotes to std rows:

Two subaccounts is the minimum that exercises pro-rata charge allocation and unit accounting; real contracts offer far more (one carrier’s build-your-own menu lists 76 options across 12 asset classes [S4]). The 60/40 split is a modeling convention — no fetched document prescribes an allocation for this chassis. The other designs impose hard allocation controls this one does not: that same carrier requires a mandatory general-account allocation of 20% with its annual-step-up rider or 10% with its daily-step-up rider, plus mandatory quarterly rebalancing [S4]; another walls guarantees into a separate Protection account [S7].
Non-qualified keeps the RMD interaction in the GLWB withdrawal rules disclosed but inactive; RMD relief is a cited mechanic [S1] [S6] and belongs in the model as a switch.
Issue age 60 sits inside the GMWB eligible band (35–80 [S1]) and the add-on GMDB band (79 or younger at issue [S1]), above the 59½ threshold at which the For Life Guarantee is effective from issue [S1], and at or below 69 so the higher 6.00% GMDB roll-up percentage applies [S3].
Single premium keeps the base recursion minimal. The chassis is flexible-premium [S1] [S2]; premium receipt increases the GWB, GAWA and Bonus Base [S1] and is retained in the recursion as an active term.
Set to zero so GWB(0) equals gross premium and the worked example is checkable; premium tax is contractually deducted from the amounts that initialize the guarantee bases [S1].

Separate account and base contract charges#

Parameter	Representative value	Basis
Total base contract asset charge	1.30% p.a. of average daily separate-account value	[S2]
— mortality & expense risk (M&E) component	1.00% p.a.	std (6)
— administrative asset charge component	0.30% p.a.	[S7] component value; split std (6)
Large-contract reduction	1.15% p.a. if contract value ≥ $1,000,000 at the later of issue or the most recent Contract Quarterly Anniversary	[S2]
Annual contract maintenance charge	$35, waived if contract value ≥ $50,000; deducted proportionally across investment divisions on the Contract Anniversary or on total withdrawal	[S2]
Fund expense — equity subaccount	0.95% p.a. of fund net assets	std (7)
Fund expense — fixed income subaccount	0.65% p.a. of fund net assets	std (7)
Transfer charge	$25 per transfer after 25 transfers in a Contract Year (reserved right)	[S2]

The chassis blends M&E and administration into one “Core Contract Charge” of 1.30% maximum assessed daily on average daily Investment Division value [S2]; its Key Information Table shows base contract cost 1.31% minimum = 1.31% maximum including the amortized contract fee [S2], i.e. current equals contractual maximum. One carrier alone unbundles — Series B: operations 0.80% + administration 0.30% + distribution 0.20% = 1.30% [S7]. The composite therefore takes the 0.30% administrative component directly from [S7] and assigns the 1.00% residual to M&E std, so the parts sum exactly to the cited 1.30% total [S2]. Observed totals across the set: the chassis 1.30% [S2]; the commission-class contract 1.65% [S6]; the advisory-class contract 0.40% [S4]; 0.65% (ADV) to 1.70% (C) [S7]; 1.55%–1.90% by elected death benefit [S8].
Observed fund expense ranges: 0.52%–2.28% (the chassis, stated as of December 31, 2021, so indicative rather than current [S2]); 0.46%–1.85% [S6]; 0.21%–1.60% [S4]; 0.27%–3.48% [S8]. The two std values sit inside all four with the usual equity/bond ordering.

Contingent deferred sales charge (withdrawal charge) and free withdrawal#

Parameter	Representative value	Basis
CDSC basis	Percentage of Remaining Premium withdrawn, by completed years since receipt of that premium (not contract year)	[S2]
CDSC schedule	0–1 yr 8.5%; 1–2 7.5%; 2–3 6.5%; 3–4 5.5%; 4–5 5.0%; 5–6 4.0%; 6–7 2.0%; 7+ 0.0%	[S2]
Remaining Premium	Total premium paid, reduced by withdrawals of premium (including withdrawal charges), before adjustment for MVA or charges	[S2]
Free withdrawal	10% of Remaining Premium each Contract Year that would otherwise incur a charge, minus earnings; earnings (contract value less Remaining Premium) come out free first; aged-out premium is also free; RMD withdrawals reduce the allowance	[S1]
Guaranteed-withdrawal carve-out	Cumulative withdrawals within the GLWB annual limit incur no withdrawal charge	[S1]
Terminal illness / extended care waiver	Increases the charge-free amount on a 12-month terminal prognosis or 90 consecutive days’ confinement; maximum $250,000 of contract value; exercisable once	[S2]

GLWB rider — representative election: the chassis GLWB, single life, “Core” benefit option#

Parameter	Representative value	Basis
Benefit base name	Guaranteed Withdrawal Balance (GWB)	[S1]
GWB at issue	Premium net of premium tax = $100,000	[S1]
Rider charge — current	1.25% p.a. of the GWB	[S3]
Rider charge — assessment	Quarterly, at rate/4 applied to the GWB on the Contract Quarterly Anniversary	frequency [S1]; base [S1] [S3]
Rider charge — deduction	Cancelled from subaccounts pro rata to their values	std (8)
Rider charge — guaranteed maximum	3.00% p.a.	std (9)
Rider charge — maximum single increase	+0.25% per increase (Core-tier options)	[S1]
Rider charge — reset mechanism	Discretionary increase permitted on each fifth Contract Anniversary, with an irrevocable opt-out	[S1]; selection std (10)
Bonus (roll-up) percentage	6.00% of the Bonus Base	[S3]
Bonus condition	Credited to the GWB at the end of each Contract Year in which no withdrawal was taken, within the Bonus Period	[S1]
Bonus Period	10 Contract Years from the endorsement effective date, restarting on each Bonus-Base-increasing step-up occurring on or before the anniversary following the Designated Life’s 80th birthday	[S1]
Step-up basis	Annual Contract Value on each Contract Anniversary	[S3]
GWB Adjustment percentage	105%	[S3]
GWB Adjustment Date	Later of the anniversary on/after the Designated Life’s 70th birthday and the 12th Contract Anniversary; applies only if no withdrawal has been taken by then	[S1]
GAWA% by attained age at first withdrawal	35–59: 4.00%; 60–64: 4.00%; 65–69: 5.55%; 70–74: 5.75%; 75–80: 5.95%; 81+: 6.20%	[S3]
For Life Guarantee	Effective at issue because the Designated Life is 59½ or older	[S1]
Benefit base cap	GWB and Bonus Base each capped at $10,000,000	[S1]
Eligible ages	Designated Lives 35–80	[S1]

The research file records the rider charge’s base (GWB) and frequency (quarterly) [S1], and records that the annual contract maintenance charge is deducted proportionally across investment divisions [S2], but records no allocation rule for the rider charge itself. Pro-rata deduction is therefore a std convention extended from the cited contract-fee rule [S2] — near-universal in practice, but not on this evidence a cited contract term.
Guaranteed maxima in the historical charge appendix run 1.20% to 3.00% by option and vintage, but none of them is the currently-offered option modeled here. The nearest are the entries for the chassis’ Value-and-Core-only GMWB variant — a sibling rider offering just those two benefit options, on the same GAWA% grids [S3] — where the appendix records single-life Core max 3.00% / current 1.30%, single-life Value max 1.70% / current 0.60% and joint-life Core max 3.00% / current 1.60%; and, for that same sibling variant issued before 2020-08-10, max 2.90% / current 1.45% [S1]. No guaranteed maximum is recorded for the modeled GLWB’s own single-life Core option, whose current charge is 1.25% [S3], so 3.00% is a std pick at the top of the observed band. Cross-insurer maxima: 2.50% with a 0.60% minimum [S4]; 2.75% single and joint [S8]; 1.25% [S7].
Three reset mechanisms exist in the set; all three are documented under “Contractual mechanics” below. The model defaults to the five-yearly discretionary reset std because it matches the chassis [S1], with the VIX-squared formula as a variant.

GMDB rider — representative election: Roll-up GMDB#

Parameter	Representative value	Basis
Benefit form	Greatest of contract value, total Net Premiums, and the roll-up GMDB Benefit Base	[S1]
Roll-up percentage	6.00% p.a. compounded (age 69 or younger at election); 5.00% if age 70 or older	[S3]
Roll-up accrual window	From the Issue Date until the Contract Anniversary immediately preceding the oldest Covered Life’s 81st birthday	[S1]
Rider charge — current	0.90% p.a. of the GMDB Benefit Base	[S2] [S3]
Rider charge — guaranteed maximum	1.80% p.a.	[S2]
Rider charge — assessment	Quarterly at rate/4 on the GMDB Benefit Base, deducted pro rata	frequency std (11); base [S3]
Withdrawal adjustment	Dollar-for-dollar up to `roll-up% × Benefit Base at the previous anniversary`; proportional to the contract-value reduction above that; applied at the end of the Contract Year	[S1]
Eligibility	Owner age 79 or younger at issue	[S1]
Interaction	Fixed Account Options are unavailable when this GMDB is elected	[S1]
Included basic death benefit (no charge)	Greater of contract value and total premiums reduced for prior withdrawals in the same proportion the contract value was reduced — a proportional return-of-premium, not dollar-for-dollar	[S1] [S2]

The research file records charge frequency quarterly for the GMWB family [S1] but does not state the frequency for the add-on GMDB charge; the std choice aligns the two so a single quarterly charge routine serves both. The charge base (GMDB Benefit Base) and rate (0.90% current / 1.80% maximum) are cited [S2] [S3].

Contractual mechanics#

Account value and unit accounting#

Contract value is the sum over subaccounts of units held times unit value. Unit value evolves with the fund’s gross return less the fund’s own expenses less the base contract asset charge, assessed daily as a percentage of the average daily account value of the Investment Divisions [S2]. Charges assessed per contract rather than per unit of value — the annual contract maintenance charge [S2] and the two rider charges [S1] [S3] — are collected by cancelling units, leaving unit value undisturbed. The generic separate-account charge-accrual convention is specified once in products/variable_ul/technical-notes.md and reused here, with two differences that follow from that being a life file: it works at the subaccount-value level and carries no unit count, so the unit ledger above is stated here rather than inherited; and a VA has no cost of insurance and no IRC §7702 corridor, its guarantees being GMDB and GLWB benefit bases rather than a death benefit on a net amount at risk.

GLWB benefit base — the core algebra#

All withdrawals count toward the GLWB annual limit, including automatic withdrawals, RMDs, advisory-fee withdrawals, partial 1035 exchanges and free withdrawals; for guarantee purposes a withdrawal is the total amount withdrawn including withdrawal charges, asset allocation fees, market value adjustments and other charges and adjustments [S1]. Withdrawals under IRC §72(t)/§72(q) are not treated as RMDs for guarantee-preservation purposes [S1] R9. Let W be the current partial withdrawal, ΣW cumulative withdrawals in the Contract Year including W, and L = max(GAWA, RMD) for a qualified contract (L = GAWA otherwise) [S1]:

Excess Withdrawal  E = min( W , ΣW − L )   if ΣW > L, else 0
Non-excess portion N = W − E

If ΣW ≤ L :   GWB_new  = max( GWB_old − W , 0 );      GAWA unchanged
If ΣW > L :   GWB_new  = max( (GWB_old − N) × (1 − E / CV_pre_excess) , 0 )
              GAWA_new = min( GAWA_old × (1 − E / CV_pre_excess) , GWB_new )

where CV_pre_excess is the contract value after the non-excess portion has been deducted. This is dollar-for-dollar for the guaranteed portion, then pro rata to the contract-value reduction caused by the excess [S1] — a treatment that is essentially universal across the set [S1] [S4] [S7] [S8]. If the For Life Guarantee is not in effect and GWB < GAWA at the end of a Contract Year, GAWA is set equal to GWB [S1].

Bonus. GWB += Bonus% × Bonus Base at the end of each Contract Year in the Bonus Period in which no withdrawal was taken; any withdrawal, including an automatic withdrawal or RMD, kills that year’s bonus [S1]. The Bonus Base initializes at GWB, increases by net premium, is set to min(GWB_after, BB_before) on an excess withdrawal and to max(GWB_after_step-up, BB_before) on a step-up, and is otherwise unaffected by withdrawals; applying the bonus does not change it [S1].

Step-up. On each Contract Anniversary, if contract value exceeds the GWB, the GWB resets to contract value [S1]; the representative basis is the anniversary Contract Value [S3]. The alternative fixed at election is the Highest Quarterly Contract Value — the highest quarterly adjusted contract value over the four most recent Contract Quarterly Anniversaries, each adjusted for subsequent premiums (net of tax) and withdrawals under the same dollar-for-dollar / proportional rule [S1]. After the first withdrawal a step-up sets GAWA_new = max(GAWA% × GWB_new, GAWA_old) [S1].

GWB Adjustment. A one-shot deferral reward: on the GWB Adjustment Date, GWB = max(GWB, GWB Adjustment), the adjustment initializing at 105% × GWB at endorsement [S3], provided no partial withdrawal has been taken by then; any earlier withdrawal voids it without value and the provision terminates [S1].

Contract value zero. With the For Life Guarantee in effect, annual payments of GAWA continue for the life of the Designated Life while the contract remains in the accumulation phase; without it, payments continue until the earlier of death or GWB depletion, the final payment truncated to the remaining GWB [S1]. All other contract rights cease: no further premiums, all other endorsements terminate without value, and no death benefit is payable on subsequent death [S1].

GMDB#

The death benefit is the greatest of contract value, total Net Premiums and the roll-up Benefit Base [S1]; the guarantee component — the insurer’s general-account cost — is the excess of that over contract value. Add-on death benefits may retain value on or after the Income Date: at the Latest Income Date the death benefit becomes GMDB Benefit Base − contract value; at an earlier Income Date the endorsement terminates with no benefit [S1].

Rider fee reset provisions — three documented mechanisms#

Periodic discretionary reset with a forfeiting opt-out (std default). The GMWB charge may be increased on each fifth Contract Anniversary, subject to a stated maximum single increase (+0.25% Core-tier, +0.15% Value-tier) and an absolute maximum rate. The owner may opt out, but doing so forfeits the GWB bonus, the automatic step-up, the GWB Adjustment and any other increases to GWB/GAWA; blocks all future premiums; and fixes the GAWA% with no future recalculation. The election is irrevocable [S1] [S3].
Step-up-triggered reset with a reversing opt-out. The fee rate may increase on every Account Value Step-up, and after the tenth Benefit Year on every Enhancement if the Enhancement Period has renewed. Opting out within 30 days of the Benefit Year anniversary reverses both the fee rate and the Protected Income Base to their pre-step-up levels, for that year only. The rate also rises with no opt-out once cumulative purchase payments after the first Benefit Year anniversary reach $100,000 [S8].
Non-discretionary VIX-squared formula reset. For each Benefit Quarter,
```
Annual Fee Rate(t) = Initial Annual Fee Rate
                   + 0.05% × [ QuarterlyAverage(Daily VIX²) / 33 − 10 ]
```
clipped to a movement band against the prior quarter’s rate (±0.40% annualized advisory class, ±0.25% commission class) and to an absolute corridor of [0.60%, 2.50%]; the quarterly deduction is the annual rate ÷ 4 [S4] [S6]. Disclosed examples: initial rate 1.45% with quarterly average VIX² of 204.42 gives 1.45% + 0.05% × (−3.81) = 1.26% (quarterly 0.3150%); a VIX² average of 602.30 gives an unclipped 1.86%, but against a prior rate of 1.42% the +0.40% band caps it at 1.82% [S4].

A fourth mechanism resets the benefit growth rate rather than the fee: one carrier’s Annual Roll-up rate is the average of daily 10-year U.S. Treasury rates over the 20 calendar days ending on the 15th day of the last month of the preceding calendar quarter, plus 1.00%, rounded to 0.10%, floored at 4%, capped at 8%; the pre-first-withdrawal Deferral bonus rate uses +1.50% on the same formula and floor/cap and terminates permanently on the first withdrawal from the Protection account [S7].

Riders and options#

In scope (modeled). The single-life Core GLWB option and the Roll-up GMDB, both parameterized in the tables above [S1] [S3]; the included Basic Death Benefit (no charge, proportional return of premium) [S1] [S2]; the CDSC and free-withdrawal allowance [S1] [S2].

Described but not modeled. Terminal Illness / Extended Care Benefit (free with all contracts) [S2]; the rider-created annuitization options — Life Income of GAWA, Specified Period Income of the GAWA (years = GWB ÷ GAWA), and the matching fixed-payment income option built on the non-lifetime GMWB [S1]; spousal continuation of the GMWB without the For Life Guarantee [S1].

Out of scope. The joint-life election of the modeled GLWB and the chassis’ other GMWB variants — one offering only the Value and Core options on the same GAWA% grids, one with an accelerated-then-standard payout, a non-lifetime GMWB at a flat 5.00% GAWA%, and one priced on a separate GMWB Charge Base with GAWA% banded from age 0 [S3]; the Highest Quarterly Anniversary Value and Combination Roll-up + HQAV GMDBs [S3]; the GMWB-linked death benefit with a 100.00% step-up percentage [S3]; the earnings-protection death benefit (40% of earnings if issue age < 70, 25% at 70–75, earnings capped at 250% of remaining premiums; closed 2023-08-28) [S1]; the Four Year Withdrawal Charge Schedule option (+0.40%) and a closed self-funded GMAB-equivalent allocation program [S1]; Fixed Account Options and their market value adjustment, excluded here by the Roll-up GMDB election [S1]; dollar cost averaging, its enhanced-rate fixed-account variant, the earnings sweep and rebalancing programs [S2]; GMIB/annuitization guarantees such as the guaranteed income benefit (GIB) rider [S7]; payout-phase guarantees such as a variable annuitization rider with a guaranteed floor [S8]; and one carrier’s mandatory general-account allocation [S4]. No currently-sold GMAB was located in the four registrations read — a research gap, not an omission [S1].

Variations across insurers#

Where the guarantee sits. Two of the four carriers [S1] [S4] use the mainstream design — one contract value, a shadow benefit base, guaranteed withdrawals while contract value > 0, insurer-funded payments after zero. A third bifurcates into an Investment Performance account (no guarantees) and a Protection with Investment Performance account (funds the guarantees), with an annuitization rather than a withdrawal guarantee [S7]. The fourth offers both a conventional GLWB and a variable annuitization payout rider with a guaranteed floor [S8]. Chosen: the mainstream withdrawal-phase design — the one a general VA model must handle, and the one with published algebra [S1].
How the benefit base grows. Four mechanics, one per carrier: a bonus on a separate Bonus Base with a 10-year window that restarts on step-up (5%/6%/7% by option) [S1] [S3]; a 7.00% Income Credit on an Income Credit Base that ratchets to Higher Anniversary Values but is not increased by the credits themselves, making the roll-up simple rather than compound [S4] [S5]; a formula rate of 10-year CMT + 1.00% floored 4% capped 8% [S7]; and a flat 6% Enhancement over a 10-year period that does not reset for current elections [S8]. Chosen: the chassis’ bonus-with-restarting-window [S1] — the restart-on-step-up interaction is the hardest of the four to model and subsumes the flat-window designs.
Step-up frequency spans three orders of granularity: annual anniversary (the chassis’ Value and Core options, plus designs at two other carriers), highest-of-four-quarters applied annually (the chassis’ Plus option), and daily (one carrier’s daily-step-up rider, where “on any day that the contract value is greater than the Income Base on that day, the Income Base is stepped up to that value”) [S1] [S3] [S4] [S8]. Chosen: annual, with the highest-quarterly variant as an election so the model can price the granularity difference.
Rider fee base and frequency. The base is consistently the benefit base, never account value: GWB [S3], Income Base [S4], GIB benefit base [S7], Protected Income Base [S8]. Frequency is quarterly at three of the four carriers [S1] [S4] [S8], while the fourth deducts on each contract date anniversary [S7]. (The research file’s cross-insurer summary calls all four quarterly; this specification follows the per-insurer extraction.) Chosen: quarterly on the benefit base.
Fee reset mechanism differs sharply — five-yearly discretionary with a forfeiting opt-out [S1], step-up-triggered with a reversing opt-out plus a no-opt-out $100,000-premium trigger [S8], and the non-discretionary VIX² formula [S4]. Chosen: the five-yearly reset as default, with the VIX² formula as a variant because it is the only one that is a deterministic function of an observable market variable, and so the only one a model can reproduce faithfully.
Investment-risk controls. One carrier imposes the strongest — a mandatory general-account allocation (20% with its annual-step-up rider, 10% with its daily-step-up rider) that cannot be transferred out unless the living benefit is cancelled, plus mandatory quarterly rebalancing [S4]. A second restricts which account funds guarantees [S7]; a third uses Investment Requirements and managed-risk fund suites [S8]; the chassis restricts the fixed account instead — Fixed Account Options are unavailable with the Roll-up GMDB, the Combination GMDB, the GMWB-linked death benefit or the earnings-protection benefit [S1]. Chosen: the chassis’ restriction [S1], which removes the fixed account and its MVA from the base model.
GMDB growth ceilings differ by age: the chassis stops all roll-up and ratchet growth at the anniversary preceding the oldest Covered Life’s 81st birthday [S1]; a second carrier’s Highest Anniversary Value ratchets to the anniversary following the 85th and its Roll-up to age 85 base stops there [S7]; a third’s Maximum Anniversary Value has no stated cutoff in the retrieved text, though its spousal-continuation version stops at the continuing spouse’s 83rd birthday [S6]. Chosen: age 81, matching the chassis.
Share-class structure trades surrender charge against asset charge. One carrier is the clearest illustration: Series B 1.30% total with a 7-year schedule; L 1.65% with 4 years; C 1.70% with none; a bonus-credit class 1.55% with a 4–5% credit and 9 years; ADV 0.65% with none [S7]. Another shows the same trade across two registrations — a commission-class contract at 1.65% with an 8/7/6/5 schedule [S6] versus an advisory-class contract at 0.40% with no withdrawal charge [S4]. Chosen: a commission-style class with a 7-year CDSC, because the CDSC drives both the expiry lapse shock and the free-withdrawal interaction.
Post-depletion payout rate. One carrier alone uses a two-table structure: Table A while contract value > 0, and a materially lower Table B once it reaches zero, at which point the payment is recalculated as Protected Income Base × Table B rate (one of its payout options, ages 70–74: 8.75% single falling to 3.50%) [S8]. The other three continue at the same percentage [S1] [S4] [S7]. Chosen: single-table continuation, with the two-table design noted as a first-order pricing variant.
Rate-sheet volatility. Every current-rate table carries a “can be superseded at any time” clause with a 10-day advance-filing commitment [S3] [S5] [S8], so the parameter set is versioned: the rate sheet dated April 27, 2026 [S3]. The historical tables show the de-risking cycle plainly — the GLWB bonus options were 5%/6%/7% for issues 2019-06-24 → 2020-08-09, cut to 4%/5%/6% for 2020-08-10 → 2022-07-31, restored to 5%/6%/7% from 2022-08-01; the GWB Adjustment fell from 200% through 170/180/190% by bonus option to 105% from 2021-03-01 [S1].

Regulatory context#

NAIC Model #250 (Variable Annuity Model Regulation). Correction, per the research file: #250 is the Variable Annuity Model Regulation, not the Annuity Disclosure Model Regulation — that is #245 REG-R43 REG-R45, confirmed independently by AG 54, which cites “NAIC Model 250, Variable Annuity Model Regulation” REG-R44. Model #250 governs insurer qualification, separate accounts, filing, required provisions, nonforfeiture and reports; its §7.B is the boundary rule — to the extent a VA provides benefits that do not vary with separate-account performance before the annuity commencement date, those provisions must satisfy Model #805 REG-R43. Note on the appendix print, which is not a substitute: the AP&P Manual’s Appendix A item for this subject, A-250 (Variable Annuities), has now been read in full and is one page of three paragraphs — the ¶1 definition of a variable annuity, a ¶2 requirement that each separate account hold assets at least equal to the reserves and other contract liabilities of that account, and a ¶3 delegation of the reserve to Appendix A-820 REG-R156. It carries none of the qualification, filing, required-provisions, nonforfeiture or reports material above, and its own header names only the Standard Valuation Law (#820) and SSAP No. 56 — it does not name Model #250 anywhere REG-R156. Every Model #250 statement in this paragraph therefore continues to rest on REG-R43, not on the appendix.

Model #805 and the nonforfeiture floor. Second correction: Model #805 expressly excludes variable annuities, so it does not reach the separate account at all REG-R42; it bites only on a VA’s fixed account, via Model #250 §7.B REG-R43. Where it does bite, its indexed nonforfeiture rate is the lesser of 3% and the five-year Constant Maturity Treasury rate (rounded to the nearest 1/20th of one percent) reduced by 125 basis points, subject to a floor of 15 basis points (0.15%) — not the 1% floor often quoted; the minimum nonforfeiture amount accumulates net considerations of 87.5% of gross, less prior withdrawals, an annual contract charge of $50, premium tax paid and indebtedness REG-R42. None of it is operative here: electing the Roll-up GMDB makes Fixed Account Options unavailable [S1].

VM-21 — the statutory reserve standard. VM-21 covers variable deferred and immediate annuities with or without GMDB/VAGLB and constitutes CARVM for contracts in scope R1 REG-R35. Aggregate reserve = Stochastic Reserve + additional standard projection amount + any Alternative Methodology reserve, with the SR being CTE70 of the scenario reserves, each contributing the greatest present value of accumulated deficiency R1 REG-R35. The Alternative Methodology is available only for contracts with no guaranteed benefits or only GMDBs — never a GLWB block R1 — so this product is unavoidably stochastic. Effective for valuation dates on or after January 1, 2020, with an elective 36-month phase-in and a separate economic scenario generator phase-in of 36 months beginning January 1, 2026 R1 REG-R35. Third correction: AG 43 is not simply superseded — through reference in AG 43 the VM-21 requirements also reach contracts issued before January 1, 2017, and the two populations may be aggregated R1 REG-R38.

AG 33 and why it is not the reserve standard here. AG 33 — “Determining CARVM Reserves for Annuity Contracts With Elective Benefits” — has been read in full and applies “to all annuity contracts subject to CARVM, where any elective benefits … are available to the contract owner under the terms of the contract”, with no product list and no separate-account exception; its own examples of elective benefits are full surrenders, partial withdrawals and full and partial annuitizations, which this contract has REG-R151. It is displaced by its own precedence clause — “the product specific actuarial guideline or regulation will take precedence” — which is why AG 43 and VM-21 govern instead. The principle is sourced, the pairing is not: AG 33 names no other guideline anywhere in its eight printed pages and never mentions separate accounts, variable annuities or the Valuation Manual, so the AG 43 pairing is this library’s inference from the general clause, [std, derived] REG-R151. The guideline’s printed effective date is December 31, 1998, “affecting all contracts issued on or after January 1, 1981”, with a grade-in that reached 100% by December 31, 2000 and so has no live effect on any current valuation REG-R151; the library elsewhere carries December 31, 1995 under a different title from IRS Rev. Rul. 2002-6, and because the extracted pages contain no amendment history the reconciliation is unresolved and neither date is presented as settled. The mechanics AG 33 does supply impose a behavioral frame — elective incidence maximised over rather than assumed — which is the opposite of VM-21’s prudent-estimate approach, so assumptions must never be carried between the two frames.

VM-22 and VM-V — where the post-depletion stream lands. VM-22 is the PBR framework for non-variable annuities and does not cover VAs, but fixed income streams from guaranteed living benefits after account exhaustion are named in its Reserving Categories and in VM-V §1’s scope REG-R36 REG-R37. Fourth correction: in the January 1, 2026 Valuation Manual VM-22 is entirely the PBR framework, and maximum valuation interest rates for income annuities live in VM-V Section 1, not VM-22 REG-R36 REG-R37.

C-3 Phase II risk-based capital. One projection, two outputs: VM-21 §§4.A–4.E and the RBC requirements are identical apart from the elective federal income tax treatment REG-R35. Per LR027, C-3 uses CTE(98) — the average of the 2% largest scenario reserves — on the same process as the reserve, with TAR = pre-phase-in VM-21 reserve + the C-3 amount; the C-3 amount is then divided by (1 − the enacted maximum federal corporate income tax rate) and split into interest-rate-risk and market-risk portions R3. The 2020 revisions moved the stochastic measure to 25% of CTE 98 from CTE 90 R4 — which is why the older C-3 Phase II instructions package still prints the pre-reform CTE 90 Total Asset Requirement and a 35% tax rate REG-R47: cite it for structure, R3 for the current level. The reform’s diagnosis — that fully hedging fair value increased capital requirements and volatility — is in the Oliver Wyman QIS II reports R2 REG-R48.

Federal securities law. Registration is on Form N-4 R6 REG-R52, whose Part A order (Item 2 Overview, Item 3 Key Information, Item 4 Fee Table, in numerical order at the front) produces the structure every prospectus in the set follows, with Inline XBRL tagging of specified items R6 — first-hand from the retrieved form; the cross-product entry REG-R52 records a failed fetch and describes the form only through the adopting releases. Rule 498A authorizes the Initial and Updating Summary Prospectuses and the Key Information Table R7 REG-R50 REG-R51. FINRA Rule 2330 governs recommended purchases, exchanges and initial subaccount allocations (not later reallocations), requires principal review within seven business days and surveillance of exchanges within the preceding 36 months — the proximate brake on 1035 exchange velocity and therefore on replacement-driven surrender assumptions R8 REG-R54 REG-R56.

Federal tax. IRC §72 supplies the exclusion ratio, the income-first (LIFO) rule for pre-annuitization distributions, the 10% additional tax under §72(q), and the §72(s) required-distribution-at-death rules that shape death benefit payout modeling R9 REG-R55. §817(h) diversification is a product qualification condition: under Treas. Reg. §1.817-5 no more than 55% of the account’s total assets may be in any one investment, 70% in any two, 80% in any three, 90% in any four, tested quarterly with a 30-day cure window and a look-through to underlying RIC assets R10 REG-R15. RMD timing under the 2024 final regulations is a behavioral input, not merely a tax one, because GLWB activation clusters at the RMD age REG-R57 REG-R58 REG-R64 — unverified. Tax reserves under §807 are the greater of net surrender value and 92.81% of the NAIC-prescribed method (CARVM, i.e. VM-21), capped at statutory REG-R16 REG-R72 — unverified.

Disclosure, suitability, accounting and professional standards. Model #245 largely exempts registered products complying with SEC and FINRA rules under its §3.D, but the Buyer’s Guide is still required in variable annuity sales REG-R45; Model #275’s best-interest standard changes exchange and replacement behavior and therefore surrender assumptions REG-R46. Under LDTI the GLWB and GMDB are the paradigm market risk benefits, at fair value through earnings REG-R34 — fasb.org returned 403, so ASU 2018-12 itself was never retrieved and its substance rests on secondary summaries unverified REG-R71 for the MRB-vs-insurance-liability classification, which was retrieved — a second consumer of the same cash flows on a risk-neutral basis. Fifth correction: there is no ASOP for principle-based reserves for annuities — ASOP No. 52 is scoped to VM-20 life products, so any claim that it governs VM-21 is unverified and, on the retrieved ASB text, wrong R11 R12 REG-R31. The applicable standards are ASOP Nos. 7 REG-R27, 22 REG-R29, 56 REG-R32, 2 (non-guaranteed elements, expressly covering variable deferred annuities and so governing the rider-charge reset) REG-R26, 54 REG-R70 and 10 REG-R71; the nearest VM-21-specific guidance is the non-binding Academy practice note supplement R4 REG-R66.