State RegulationsVA specificDifficulty 3/5
An owner of a Virginia market value adjusted annuity considers surrendering early and asks what will determine the amount she receives. The correct explanation is that:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under Va. Code § 38.2-107.1 and § 38.2-3113.1, the defining feature of a market value adjusted annuity is the contract's disclosed adjustment formula, which moves surrender and annuity-date values up or down with market conditions such as interest-rate changes. The owner neither negotiates with the insurer nor receives an unconditional guarantee of principal; the formula — disclosed when the contract is sold — controls the outcome.
Why the other options are wrong
- A) Surrender values are not negotiated case by case; the contract's disclosed formula under Va. Code § 38.2-3113.1 produces the number.
- B) A guaranteed deposit-plus-interest result contradicts the product's nature; the whole point of the market value adjustment is that values move with the market.
- D) Other owners' surrender activity is irrelevant; the adjustment runs from market-based factors in the contract's formula, not from aggregate surrender volume.
Memory hook
No haggling, no blanket guarantee — the disclosed market formula decides.