Oklahoma's annuity questions test a short list of contract provisions from Article 40 of Title 36, plus the free look, replacement and guaranty association rules that apply to annuities as well as life insurance. How annuities work (accumulation and annuitization, fixed, indexed and variable products, payout options, taxation) is in the national Annuities guide. This page covers only the Oklahoma rules.

Licensing

• The Oklahoma life line of authority includes annuity benefits (36 O.S. 1435.8(A)(1)).
• Variable annuities need the separate variable life and variable annuity line (1435.8(A)(5)). The producer must also hold securities registration.

Required provisions in individual annuity contracts

Grace period (36 O.S. 4017)

• Stipulated payments after the first get a grace period of one month, but not less than 30 days.
• The insurer may charge interest of up to 6% for the days of grace used.

Incontestability (36 O.S. 4018)

• If the annuity required health statements as a condition of issue, it becomes incontestable after 2 years from issue, except for nonpayment.

Reinstatement (36 O.S. 4022)

• A contract in default whose cash value hasn't been paid out may be reinstated within 1 year of the default.
• Overdue payments are paid with interest of up to 6%.

Paying a single premium (36 O.S. 4030(A))

• Unless the Commissioner approves otherwise, a single premium may be paid only by cash, check, cashier's check, bank draft, money order, premium note or electronic payment.
• Qualified pension transfers are an exception.
• Paying with shares of stock or other property isn't allowed.

Free look and replacement

Free look (36 O.S. 4003.1)

• An individual annuity, like an individual life policy, may be returned within 10 days of delivery.
• The contract is void from the beginning. The premium is refunded within 30 days.

Replacement (36 O.S. 4032-4038)

• Oklahoma's replacement act covers annuities as well as life insurance.
• The agent gets a signed statement on whether coverage is being replaced. The applicant receives the Notice to Applicants Regarding Replacement of Life Insurance or an Annuity before signing.
• A replacing annuity carries a 20-day right to return (4034(G)).
• Details are in the Oklahoma Insurance Regulation guide.

Guaranty association protection

• The Oklahoma Life and Health Insurance Guaranty Association covers the present value of annuity benefits up to $300,000 per life (36 O.S. 2025(C)(2)(a)(3)). It keeps a separate annuity account for assessments (2023(B)).
• Variable values where the owner bears the investment risk aren't covered (2025(B)(2)(a)). For such a product, the agent must give a separate notice that it isn't covered, before or at delivery (2043(D)).
• No one may use the Association's existence to sell an annuity (2043(A)).

Common exam traps

• Annuity grace period: one month, not less than 30 days, with up to 6% interest.
• Annuity reinstatement: 1 year. For life policies it is 3 years.
• Free look: 10 days, or 20 days when the annuity replaces existing coverage.
• Guaranty limit: $300,000 present value. Variable values aren't covered.