New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 4 - ACTUARIAL SERVICES
Subchapter 47 - ACTUARIAL REQUIREMENTS FOR FLEXIBLE-FACTOR POLICY FORMS
Section 11:4-47.5 - Nonforfeiture benefits-actuarial certification

Universal Citation: NJ Admin Code 11:4-47.5

Current through Register Vol. 56, No. 6, March 18, 2024

(a) Each form submitted for filing shall be accompanied by a certification by a qualified actuary that the nonforfeiture benefits provided are in compliance with 17B:25-19 or are exempt from providing guaranteed nonforfeiture benefits as described in 17B:25-19.

1. Nonforfeiture compliance for supplementary term insurance benefits that create a "target" death benefit based upon the combined coverage provided by the base policy forms and supplementary benefit shall be based upon the total coverage provided by the base plan and supplementary benefit combination.

2. All other term insurance benefits shall be tested for nonforfeiture compliance as stand-alone insurance coverage.

(b) For forms where the principal variable is the insurer's right to change (either increase or decrease) premiums subject to a maximum premium amount, policy provisions relating to nonforfeiture shall satisfy the requirements set forth in 17B:25-19. For purposes of determining compliance with this statute, "premiums specified in the policy" shall mean the initial scale, rather than the maximum scale, of guaranteed premiums, unless the latter would produce larger cash values. In this case, the minimum nonforfeiture benefits shall be based on the assumption that guaranteed maximum premiums shall apply wherever possible.

(c) For policies where cash values are determined retrospectively as an accumulation of gross premiums less expense charges, with interest increments and mortality decrements, the excess of expense charges in the first policy year over renewal expense charges may not be greater than the maximum initial expense allowance as set forth in N.J.S.A. 17B:25-19h(i).

(d) Policy forms may incorporate surrender charges of specified amounts at specified durations, provided that the resulting cash values are at least as large as those developed under (c) above assuming the maximum initial expense allowance and no surrender charges. A form shall be considered to satisfy this requirement if the surrender charges are less than the unamortized unused initial first year expense allowance. The initial expense allowance shall be amortized over the period for which coverage was purchased.

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