Any insurer delivering or issuing for delivery in this state
any variable life insurance policies shall mail to each variable life insurance
policyholder at his or her last known address the following reports:
(a) Within thirty days after each anniversary
of the policy, a statement or statements of the cash surrender value, death
benefit, any partial withdrawal or policy loan, any interest charge, and any
optional payments allowed pursuant to Subsection (d) of Sec.
38a-433-4
under the policy computed as of the policy anniversary date. Provided, however,
that such statement may be furnished within thirty days after a specified date
in each policy year so long as the information contained therein is computed as
of a date not more than sixty days prior to the mailing of such notice. This
statement shall state that, in accordance with the investment experience of the
separate account, the cash values and the variable death benefit may increase
or decrease, and shall prominently identify any value described therein which
may be recomputed prior to the next statement required by this Section. If the
policy guarantees that the variable death benefit on the next policy
anniversary date will not be less than the variable death benefit specified in
such statement, the statement shall be modified to so indicate. For flexible
premium policies, the report must contain a reconciliation of the change since
the previous report in cash value and cash surrender value, if different,
because of payments made (less deductions for expense charges), withdrawals,
investment experience, insurance charges and any other charges made against the
cash value. In addition, the report must show the projected cash value and cash
surrender value, if different, as of one year from the end of the period
covered by the report assuming that:
(i)
planned periodic premiums, if any, are paid as scheduled;
(ii) guaranteed costs of insurance are
deducted; and
(iii) the net
investment return is equal to the guaranteed rate or, in the absence of a
guaranteed rate, is not greater than zero. If the projected value is less than
zero, a warning message must be included that states that the policy may be in
danger of terminating without value in the next 12 months unless additional
premium is paid.
(b)
Annually, a statement or statements including:
(1) a summary of the financial statement of
the separate account based on the annual statement last filed with the
Commissioner;
(2) the net
investment return of the separate account for the last year and, for each year
after the first, a comparison of the investment rate of the separate account
during the last year with the investment rate during prior years, up to a total
of not less than five years when available;
(3) a list of investments held by the
separate account as of a date not earlier than the end of the last year for
which an annual statement was filed with the Commissioner;
(4) any charges levied against the separate
account during the previous year;
(5) a statement of the portfolio turnover
rate as defined herein during the preceding fiscal year of investments
allocated to the separate account.
(A) The
rate shall be calculated by dividing (A) the lesser of purchases of sales of
portfolio securities for the particular fiscal year by (B) the monthly average
of the value of the portfolio securities owned by the separate account during
the particular fiscal year. Such monthly average shall be calculated by
totaling the values of the portfolio securities as of the beginning and end of
the first month of the particular fiscal year and as of the end of each of the
succeeding eleven months, and dividing the sum by 13, except that the average
value of securities for which market quotations are not available may be based
upon the value of such securities as of the end of the preceding fiscal
quarters.
(B) For the purposes of
this item, there shall be excluded from both the numerator and the denominator
all U.S. Government securities (short-term and long-term) and all other
securities whose maturities at the time of acquisition were one year or less.
Purchases shall include any cash paid upon the conversion of one portfolio
security into another. Purchases shall also include the cost of rights or
warrants purchased. Sales shall include the net proceeds of the sale of rights
or warrants. Sales shall also include the net proceeds of redemptions of
portfolio securities by call or maturity.
(C) The insurer shall show, in addition to
the calculated portfolio turnover rate, both the amount of the purchases and
the amount of the sales (calculated as prescribed in (2) above) and the monthly
average (but not the individual monthly figures) of the value of the portfolio
securities owned by the separate account during the fiscal year.
(D) The insurer may, if it wishes, make any
statement or explanation with respect to any significant variations in the
portfolio turnover rate during the three fiscal years next preceding.
(6) a statement of any change,
since the last report, in the investment objective and orientation of the
separate account, in any investment restriction or material quantitative or
qualitative investment requirement applicable to the separate account, or in
the investment adviser of the separate account; and
(7) the name of each broker or dealer
handling portfolio transactions on behalf of the separate account in which the
insurer or an affiliate has any material direct or indirect interest and the
nature of such transactions and the amount of compensation received by each
such broker or dealer from business originating with the separate account
during the preceding fiscal year;
(c) For flexible premium policies, a report
must be sent to the policyholder if the amounts available under the policy on
any policy processing day to pay the charges authorized by the policy are less
than the amount necessary to keep the policy in force until the next following
policy processing day. The report must indicate the minimum payment required
under the terms of the policy to keep it in force and the length of the grace
period for payment of such amount.
