New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter III - Policy and Certificate Provisions
Subchapter A - Life, Accident and Health Insurance
Part 54 - Variable Life Insurance
Section 54.6 - Insurance policy requirements

(i) a prominent statement that the amount or duration of death benefit may be variable or fixed under specified conditions and may increase or decrease;

(ii) a prominent statement that policy values may increase or decrease in accordance with the experience of the separate account, subject to any specified minimum guarantees;

(iii) a statement describing any minimum death benefit required pursuant to paragraph (a)(2) of this section;

(iv) the method, or a reference to the policy provision, which describes the method for determining the amount of insurance payable at death;

(v) a captioned provision which provides that the policyholder may return the variable life insurance policy within 10 days of receipt of the policy and receive a refund of all premium payments of such policy; and

(vi) such other items as are currently required for general account life insurance policies and which are not inconsistent with this Part.

(i) 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, unless otherwise provided in the policy, the net cash surrender value 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 policy processing day on which the insurer determined that an insufficiency had occurred, and the insurer shall send the Report to Policyholders required by section 54.11(c) of this Part within 30 days of such policy processing day.

(ii) 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 a premium sufficient to keep the policy in force for three months beginning with the policy processing day on which, unless otherwise provided in the policy, the net cash surrender value under the policy was insufficient to pay all charges authorized by the policy that are necessary to keep such policy in force until the next policy processing day.

(i) all overdue premiums (other than for incidental insurance benefits) and any other 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 for overdue premiums and at a rate not exceeding the applicable policy loan rate or rates for indebtedness compounded annually; or

(ii) 110 percent of the increase in cash surrender value resulting from reinstatement; and

(iii) all overdue premiums for incidental insurance benefits, with interest at a rate not exceeding six percent per annum compounded annually.

(i) the new policy shall bear the same date of issue and issue age as the variable life insurance policy;

(ii) the new policy shall be issued on a substantially comparable plan of insurance offered in this State by the insurer (or if not available from the insurer, by a subsidiary of the insurer, its parent or an affiliate licensed to do a life insurance business in this State) with the same date of issue of the variable life insurance policy and at the rates in effect on that date for the same class of risk;

(iii) the new policy shall include such incidental insurance benefits as were included in the variable life insurance policy if such incidental insurance benefits were then available for issue with the new policy; and

(iv) the exchange shall be subject to an equitable premium or policy value adjustment that takes appropriate account of the premiums and policy values under the original and new policies. A detailed statement of the method of computing such adjustment shall be filed with the superintendent.

(i) if no premium is in default or if the policy is being continued under a variable nonforfeiture benefit, payment of variable death benefits in excess of any minimum death benefits, cash surrender values, policy loans or partial withdrawals (except when used to pay premiums), or partial surrenders may be deferred for any period during which the New York State 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; and

(ii) if the policy is being continued under a fixed nonforfeiture benefit or to the extent benefits are being paid from the general account, payment of any cash surrender value or loan may be deferred for up to six months from the date of request.

(i) The loan value available shall be at least equal to 75 percent of the policy's cash surrender value.

(ii) The amount borrowed shall bear interest at a rate not to exceed that permitted by state insurance laws.

(iii) Any indebtedness shall be deducted from the proceeds payable on death.

(iv) Any indebtedness shall be deducted from the cash surrender value upon surrender or in determining any nonforfeiture benefit.

(v) For scheduled premium policies, whenever the indebtedness exceeds the cash surrender value, the insurer shall give notice of any intent to cancel the policy if the excess indebtedness is not repaid within 31 days after the date of mailing of such notice; for flexible premium policies, whenever the total charges authorized by the policy that are necessary to keep the policy in force until the next following policy processing day exceed, unless otherwise provided in the policy, the net cash surrender value under the policy to pay such charges, a report must be sent to the policyholder containing the information specified by section 54.11(c) of this Part.

(vi) The policy may include a provision that if at any time, so long as the policy is in force on a premium-paying basis, the variable death benefit is less than it would have been if no loan or withdrawal had ever been made, the policyholder may increase such variable death benefit up to what it would have been if there had been no loan or withdrawal by paying an amount not exceeding 110 percent of the corresponding increase in policy value and by furnishing such evidence of insurability as the insurer may request.

(vii) The policy may specify a reasonable minimum amount which may be borrowed at any time, but such minimum shall not apply to any automatic premium loan provision.

(viii) No policy loan provision is required if the policy is under the extended insurance nonforfeiture option.

(ix) The policy loan provision shall be so constructed that variable life insurance policyholders who have not exercised such provision are not disadvantaged by the exercise thereof.

(x) Amounts paid to the policyholders upon the exercise of any policy loan provision may be withdrawn from the separate account and may be returned to the separate account upon repayment, except that a stock insurer may provide the amounts for policy loans from the general account.

(xi) The policy shall describe how loans are charged against separate accounts and the effect on such accounts when a loan is made or repaid.

(xii) An insurer must credit on the loaned amount a rate at least equal to the loan interest rate less two percent, unless the superintendent allows crediting of a lower rate of interest upon an insurer demonstrating a justification for such lower rate.

(i) may be applied to provide paid-up amounts of additional general account or variable life insurance;

(ii) may be deposited in the general account at a rate of interest allowed by the company;

(iii) may be applied to provide paid-up amounts of general account one-year term insurance;

(iv) may be deposited as a variable deposit in a separate account.