Current through Register Vol. 56, No. 6, March
18, 2024
(a) The
following requirements shall apply to survivorship forms, which provide that
the death benefit is payable on the last surviving insured:
1. For any survivorship form with cash
values, the values shall be calculated using exact ages, sexes and underwriting
classifications. Equivalent ages or approximations may be used and will be
reviewed on a case-by-case basis.
2. The form or actuarial memorandum shall
describe any modifications to the published tables. If the actuarial memorandum
is used to describe the modification(s), then the form shall state that a
detailed statement is on file with the Department.
(b) Survivorship forms shall satisfy the
following requirements regarding contestability:
1. Provisions are permitted which state that
the form is incontestable after it has been in effect during the lifetime of
the surviving insured for two years; and
2. Provisions are permitted which state that,
with respect to each insured, coverage is incontestable after it has been in
effect during the lifetime of that insured for two years, but only if the
following requirements are met:
i. The insurer
shall provide written notice to the policyowner at the end of the second policy
year requesting that the policyowner notify the insurer of the death of any
insured. The notice shall additionally state that failure to provide notice of
death will not preclude a contest, and could result in a contest even if
premium payments continue to be made. A sample copy of the notice shall be
submitted for Department review;
ii. The contestability provision in the form
shall describe the mailing of the notice in (b)2i above and shall state the
adverse implications for the policyowner's failure to provide the insurer with
timely notice of death;
iii. A copy
of the insurer's notice and any policyowner reply shall remain on file with the
insurer; and
iv. Any action of
contest shall commence promptly upon notice of death.
(c) Survivorship forms shall
satisfy the following requirements on suicide:
1. The insurer shall be permitted to rescind
a contract as a result of suicide when both insureds or the surviving insured
commit suicide during the first two years;
2. Except as provided in paragraph (c)3
below, the insurer shall reform and reissue the contract as of the original
effective date as a single life contract on the surviving insured where only
the first insured to die commits suicide during the first two years.
i. The insurer shall provide the single-life
coverage automatically without evidence of insurability, which shall be
substantially the same as the coverage provided under the original survivorship
policy.
ii. Any suicide and
contestability provisions of the reformed and reissued contract shall be
effective as of the effective date of the original survivorship form;
3. As an alternative to the
reformed and reissued contract, the insurer shall be permitted to continue the
original policy as a survivorship contract.
i. The form's suicide provision shall include
a description of either the reformed and reissued contract at (c)2 above, or
the survivorship contract at (c)3 above;
4. Insurers shall be permitted to avoid the
provision of single life coverage on the life of the survivor only if such
surviving insured was uninsurable at the time the original policy was issued
and the form so states; and
5. Any
time limits with respect to the process of changing coverage from joint to
single life coverage shall satisfy the following standards:
i. The suicide provision shall include the
requirement that proof of first death shall be provided to the insurer. In the
case of first death by suicide, such proof shall be provided within 90 days of
the death;
ii. The provision shall
indicate that the insurer shall provide information no later than 30 days after
receiving notification of the death regarding any payments required for the
single life coverage (for example, the new premium amount) which may be
required;
iii. The provision shall
allow the owner a 60-day period after receiving notification from the insurer
to pay the amount(s) required; and
iv. The provision shall describe the death
benefit payable in the event the survivor dies prior to expiration of the
60-day period allowed for payment without having made the payment. Such death
benefit shall be based on the full face amount of the original survivorship
policy net of the premium and any other required amount remaining due and
payable.
(d)
Insurer contestability and suicide practices for riders used with survivorship
contracts shall be consistent with those for the base policy.
(e) The form shall include a provision
directing the owner to submit to the insurer proof of death upon the first
death.
(f) The form shall provide
for reinstatement pursuant to
11:4-41.3(b)8.
The insurer shall only require evidence of insurability on any insured alive on
the date of default.