§1747d Excess Earnings Used for Amortization of Original Investment

Summary

For any insurance contract under this subchapter, 50 percent of any excess earnings in a year can be used, on top of the required minimum annual return, to pay return on the outstanding investment, but only so total annual return does not exceed 5 percent of that investment. The rest of the excess earnings must be used, along with the required annual amortization charge, to pay down the outstanding investment; however, if earlier operating years had income below expenses, excess earnings must first make up those shortfalls (excluding previously waived premium charges) and then pay any premium charges that were waived.