What if er allows loans & insurer doesn't

[Guest amfam2]

My insurance company issues annuities for 403(b) plans.

In the event an employer elevates the plan to Title 1 of ERISA and creates a plan document, what happens if the employer's plan document contains provisions that the insurance contracts already issued under the plan do not allow?

Specifically, would it be okay for the insurance company to inform participant that funds in annuity policy cannot be made available for loan? and then inform the participant that they may elect to move/transfer plan assets to another insurance company (perhaps one selected by the employer) in order to take a loan?

If the employer has the right & obligation to establish a written plan document, is an existing annuity contract required to include loan provisions (as well as any other provisions which are not already written into the underlying annuity contract) in the annuity contract itself?

I tried to research for information on the impact on existing annuity contracts when an employer upgrades a TSA into an ERISA Title 1 plan. What is an insurance company who has already issued a contract required to do?

[mbozek]

There are two separate contractual relationships here- one between the employer and the employees ( the plan) and the other between the insurer and the participants. Changing the plan to permit loans does not change the terms of the insurance contract. The insurer does not have to permit loans in the contracts or any other contract provisions because the employer changes the plan terms.