Current through Register Vol. 56, No. 6, March
18, 2024
(a) For any
flexible factor form where cash values and/or death benefits are subject to
variation on the basis of interest, mortality, or expense factors that may be
adjusted by the insurer, or on the basis of premium amounts which the
policyholder may unilaterally change or choose not to pay, the insurer shall
provide each policyholder with a periodic report to notify each policyholder of
his or her values and benefits. The report shall satisfy, at a minimum, the
following requirements:
1. The report shall
be provided at least annually, and shall show values applicable at both the
beginning and end of the period covered by the report;
2. The report shall show the policy status as
of a date no more than two months prior to the date of the mailing of the
report and shall show all increments and decrements to values and benefits
since the date as of which the last previous report provided value and benefit
information;
3. Individual premiums
received during the period covered by the report shall be identified as to
amount, date of receipt, and the date on which the insurer first credited
interest thereon, unless this information was previously provided in writing to
the policyholder at the time each consideration was received;
4. Interest increments shall not be
aggregated over different time periods but rather shall be segregated in
sufficient detail to permit verification;
5. The report shall record all interest rates
which applied to loaned and unloaned amounts during the reporting period;
i. In the case of policies with "buckets" or
"generations" of interest, the Commissioner shall waive the requirement set
forth in (a)5 above if:
(1) The report states
that the insurer will provide information regarding interest rates and the
methods utilized to calculate interest credits to loaned and unloaned values to
the policyholder upon request and free of charge; and
(2) The information available upon request
shall record all interest rates which applied to loaned and unloaned amounts
during the reporting period, together with the amounts to which such rates
apply.
ii.
Notwithstanding any waiver granted pursuant to (a)5i above, the report shall
indicate the interest rate(s) which applied to new premiums during the
reporting period;
6. The
report shall display all transactions and charges allowed under the policies,
which shall be recorded by date. However, the Commissioner shall waive this
requirement with respect to the recording of loan activity if:
i. The report states that the insurer will
provide this information to the policyholder upon request and free of charge;
and
ii. The information available
upon request shall record all transactions for loan activity by date;
and
7. If the value of
the policy is such that it would not maintain insurance in-force until the
anticipated effective date of the next periodic report, the report shall
include a caution that the policy may be in danger of terminating without value
in the next 12 months unless additional premium is paid.
(b) For all flexible-factor forms, the
insurer shall notify policyholders of changes in the amount of premiums or
premium factors. The notification required pursuant to this section shall be by
periodic report, amendment to the policy form or letter.
(c) For policies to which (a) above applies,
the periodic report set forth in that subsection may be utilized to satisfy the
notification requirement set forth in (b) above. If so, the notification to the
policyholder shall include any changes in amounts that have occurred since the
effective date of the previous report together with any changes that have been
finally adopted by the insurer and that will be applicable to the next
subsequent reporting period.
(d)
For forms which contain non-guaranteed premiums or rating factors, the
notification of changes to the premiums or factors shall be in the form of a
policy form amendment which shall modify all current and future non-guaranteed
premium or rating factors that have changed and that were included in the
original policy or in subsequent amendments. Any policy form amendments shall
be submitted with the form submission for review and filing by the Commissioner
in accordance with applicable law.
