California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 3 - Insurers
Article 12.3 - Valuation of Life Insurance Policies
Section 2542.2 - Applicability
Universal Citation: 10 CA Code of Regs 2542.2
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
This Article 12.3 shall apply to all life insurance policies, with or without nonforfeiture values, issued on or after the effective date of this article, subject to the following exceptions and conditions.
(a) Exceptions
(1) This article shall not apply to any individual
life insurance policy issued on or after the effective date of this article if the
policy is issued in accordance with and as a result of the exercise of a reentry
provision contained in the original life insurance policy of the same or greater
face amount, issued before the effective date of this article, that guarantees the
premium rates of the new policy. This article also shall not apply to subsequent
policies issued as a result of the exercise of such a provision, or a derivation of
the provision, in the new policy.
(2)
This article shall not apply to any universal life policy that meets all the
following requirements:
(A) Secondary guarantee
period, if any, is five (5) years or less;
(B) Specified premium for the secondary guarantee
period is not less than the net level reserve premium for the secondary guarantee
period based on the CSO valuation tables as defined in Section
2542.3(f) and the
applicable valuation interest rate; and
(C) The initial surrender charge is not less than
100 percent of the first year annualized specified premium for the secondary
guarantee period.
(3) This
article shall not apply to any variable life insurance policy that provides for life
insurance, the amount or duration of which varies according to the investment
experience of any separate account or accounts.
(4) This article shall not apply to any variable
Universal Life Insurance Policy that provides for life insurance, the amount or
duration of which varies according to the investment experience of any separate
account or accounts.
(5) This article
shall not apply to a group life insurance certificate unless the certificate
provides for a stated or implied schedule of maximum gross premiums required in
order to continue coverage in force for a period in excess of one
year.
(b) Conditions
(1) Calculation of the minimum valuation standard
for policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits
(other than universal life policies), or both, shall be in accordance with the
provisions of Section
2542.5.
(2) Calculation of the minimum valuation standard
for flexible premium and fixed premium Universal Life Insurance Policies that
contain provisions resulting in the ability of a policyholder to keep a policy in
force over a secondary guarantee period shall be in accordance with the provisions
of Section 2542.6.
1. New section filed 11-19-2002; operative 1-1-2003 (Register 2002, No. 47).
Note: Authority cited: Section 10489.94, Insurance Code. Reference: Section 10489.94, Insurance Code.
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