Current through Register Vol. 51, No. 19, September 20, 2024
A. "Direct Solicitation" Defined. In this regulation, the term "direct solicitation" does not include any group meeting:
(1) Held by an insurance producer solely for the purpose of educating individuals about or enrolling individuals in a plan or arrangement; or
Initiated by an individual employee or group member, assisting with the selection of investment options offered by a single insurer in connection with enrolling that individual employee or group member.
B. Exempted Transactions. Unless specifically included, this chapter does not apply to transactions involving the following:
(1) Credit life insurance;
(2) Group life insurance or group annuities if there is no direct solicitation of individuals by an insurance producer;
(3) An application to an insurer that issued an existing life insurance policy or existing annuity contract if:
(a) A contractual change or a conversion privilege is being exercised;
(b) The existing life insurance policy or existing annuity contract is being replaced by the same insurer under a program filed with and approved by the Commissioner; or
(c) A term conversion privilege is exercised among corporate affiliates;
(4) Proposed life insurance that is to replace life insurance under a binding or conditional receipt issued by the same insurer;
(5) Except as provided in §C of this regulation, life insurance policies or annuity contracts used to fund:
(a) An employee pension or welfare benefit plan that is covered by ERISA;
(b) A plan described by 26 U.S.C. §
401(a), 401(k), or 403(b), if the plan, for purposes of ERISA, is established or maintained by an employer;
(c) A governmental or church plan defined in 26 U.S.C. §
414, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax exempt organization under 26 U.S.C. §
457 of the Internal Revenue Code;
(d) A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor; or
(e) Any other benefit plan qualifying for income tax deductibility of premiums under Title 26 of the United States Code (Internal Revenue Code);
(6) New coverage provided under a life insurance policy or annuity contract if the cost is borne wholly by the insured's employer or by an association of which the insured is a member;
(7) Existing life insurance that is a nonconvertible term life insurance policy that will expire in 5 years or less and cannot be renewed;
(8) Immediate annuities that are purchased with proceeds from an existing annuity contract; or
(9) Structured settlements.
C. Plan or Arrangement Funded Solely by Elective Employee Contributions. Notwithstanding §B(5) of this regulation, this chapter applies to a life insurance policy or annuity contract used to fund a plan or arrangement funded solely by contributions an employee elects to make, whether on a pretax or aftertax basis, if:
(1) The insurer has been notified that plan participants may choose from among two or more insurers; and
(2) There is a direct solicitation of an individual employee by an insurance producer for the purchase of an annuity contract or life insurance policy.
D. Section B(8) of this regulation does not exclude from this chapter an immediate annuity purchased with proceeds from an existing life insurance policy.
