Current through Register Vol. 35, No. 6, March 26, 2024
Every variable life insurance policy filed for approval in
this state shall contain at least the following:
A. The cover page or pages corresponding to
the cover pages of each such policy shall contain:
(1) a prominent statement in either
contrasting color or in boldface type that the amount or duration of death
benefit may be variable or fixed under specified conditions;
(2) a prominent statement in either
contrasting color or in boldface type that cash values may increase or decrease
in accordance with the experience of the separate account subject to any
specified minimum guarantees;
(3) a
statement describing any minimum death benefit required;
(4) the method, or a reference to the policy
provision which describes the method, for determining the amount of insurance
payable at death;
(5) to the extent
permitted by state law, a captioned provision that the policy holder may return
the variable life insurance policy within 10 days of receipt of the policy by
the policyholder, and receive a refund equal to the sum of:
1) the difference between the premiums paid
including any policy fees or other charges and the amounts allocated to any
separate accounts under the policy; and
2) the value of the amounts allocated to any
separate accounts under the policy, on the date the returned policy is received
by the insurer or its agent. Until such time as state law authorizes the return
of payments as calculated in the preceding sentence, the amount of the refund
shall be the total of all premium payments for such policy; and
(6) such other items as are
currently required for fixed benefit life insurance policies and which are not
inconsistent with this regulation.
B.
Grace period:
(1) For scheduled premium policies, a
provision for a grace period of not less than thirty-one days from the premium
due date which shall provide that where the premium is paid within the grace
period, policy values will be the same, except for the deduction of any overdue
premium, as if the premium were paid on or before the due date.
(2) For flexible premium policies, a
provision for a grace period beginning on the policy processing day when the
total charges authorized by the policy that are necessary to keep the policy in
force until the next policy processing day exceed the amounts available under
the policy to pay such charges in accordance with the terms of the policy. Such
grace period shall end on a date not less than 61 days after the mailing date
of the required report to policyholders.
(3) The death benefit payable during the
grace period will equal the death benefit in effect immediately prior to such
period less any overdue charges. If the policy processing days occur monthly,
the insurer may require the payment of not more than 3 times the charge which
were due on the policy processing day on which the amounts available under the
policy were insufficient to pay all charges authorized by the policy that are
necessary to keep such policy in force until the next policy processing
day.
C. For scheduled
premium policies, a provision that the policy will be reinstated at any time
within two years from the date of default upon the written application of the
insured and evidence of insurability, including good health, satisfactory to
the insurer, unless the cash surrender value has been paid or the period of
extended insurance has expired, upon the payment of any outstanding
indebtedness arising subsequent to the end of the grace period following the
date of default together with accrued interest thereon to the date of
reinstatement and payment of an amount not exceeding the greater of:
(1) all overdue premiums with interest at a
rate not exceeding six percent per annum compounded annually and any
indebtedness in effect at the end of the grace period following the date of
default with interest at a rate not exceeding six percent per annum compounded
annually; or
(2) 110 percent of the
increase in cash value resulting from reinstatement plus all overdue premiums
for incidental insurance benefits with interest at a rate not exceeding six
percent per annum compounded annually.
D. A full description of the benefit base and
of the method of calculation and application of any factors used to adjust
variable benefits under the policy.
E. A provision designating the separate
account to be used and stating that:
(1) the
assets of such separate account shall be available to cover the liabilities of
the general account of the insurer only to the extent that the assets of the
separate account exceed the liabilities of the separate account arising under
the variable life insurance policies supported by the separate account;
and
(2) the assets of such separate
account shall be valued at least as often as any policy benefits vary but at
least monthly.
F. A
provision specifying what documents constitute the entire insurance contract
under state law.
G. A designation
of the officers who are empowered to make an agreement or representation on
behalf of the insurer and an indication that statements by the insured, or on
his behalf, shall be considered as representations and not
warranties.
H. An identification of
the owner of the insurance contract.
I. A provision setting forth conditions or
requirements as to the designation, or change of designation, or a beneficiary
and a provision for disbursement of benefits in the absence of a beneficiary
designation.
J. A statement of any
conditions or requirements concerning the assignment of the policy.
K. A description of any adjustments in policy
values to be made in the event of misstatement of age or sex of the
insured.
L. A provision that the
policy shall be incontestable by the insurer after it has been in force for two
years during the lifetime of the insured, provided, however, that any increase
in the amount of the policy's death benefits subsequent to the policy issue
date, which increase occurred upon a new application or request of the owner
and was subject to satisfactory proof of the insured's insurability, shall be
incontestable after any such increase has been in force, during the life-time
of the insured, for two years from the date of issue of such
increase.
M. A provision stating
that the investment policy of the separate account shall not be changed without
the approval of the insurance commissioner of the state of domicile of the
insurer, and that the approval process is on file with the superintendent of
this state.
N. A provision that
payment of variable death benefits in excess of any minimum death benefits,
cash values, policy loans, or partial withdrawals (except when used to pay
premiums) or partial surrenders may be deferred:
(1) for up to six months from the date of
request, if such payments are based on policy values which do not depend on the
investment performance of the separate account; or
(2) otherwise, for any period during which
the New York stock exchange is closed for trading (except for normal holiday
closing) or when the securities and exchange commission has determined that a
state of emergency exists which may make such payment impractical.
O. If settlement options are
provided, at least one such option shall be provided on a fixed basis
only.
P. A description of the basis
for computing the cash value and the surrender value under the policy shall be
included.
Q. Premiums or charges
for incidental insurance benefits shall be stated separately.
R. Any other policy provision required by
this rule.
S. Such other items as
are currently required for fixed benefit life insurance policies and are not
inconsistent with this rule.
T. A
provision for non-forfeiture insurance benefits. The insurer may establish a
reasonable minimum cash value below which any non-forfeiture insurance options
will not be available.
