Current through Register Vol. 39, No. 6, September 16, 2024
(a) As used in this
Rule, "generic name" means a title descriptive of the policy being illustrated,
such as "whole life", "term life", or "flexible premium adjustable life." An
illustration used in the sale of a policy shall satisfy the requirements of
this Section, be labeled "life insurance illustration" and contain the
following information:
(1) Name of
insurer;
(2) Name and business
address of producer or insurer's authorized representative, if any;
(3) Name, age and sex of proposed insured,
except where a composite illustration is permitted under this
Section;
(4) Underwriting or rating
classification upon which the illustration is based;
(5) Generic name of the policy, the company
product name, if different, and policy form number;
(6) Initial death benefit; and
(7) Dividend option election or application
of non-guaranteed elements, if applicable.
(b) When using an illustration in the sale of
a policy, an insurer or its agents or other authorized representatives shall
not:
(1) Represent the policy as anything
other than a life insurance policy;
(2) Use or describe non-guaranteed elements
in a manner that is misleading;
(3)
State or imply that the payment or amount of non-guaranteed elements is
guaranteed;
(4) Use an illustration
that does not comply with the requirements of this Section;
(5) Use an illustration that at any policy
duration depicts policy performance more favorable to the policy owner than
that produced by the illustrated scale of the insurer whose policy is being
illustrated;
(6) Provide an
applicant with an incomplete illustration;
(7) Represent in any way that premium
payments will not be required for each year of the policy in order to maintain
the illustrated death benefits, unless that is the fact;
(8) Use the term "vanish" or "vanishing
premium", or a similar term that implies the policy becomes paid up, to
describe a plan for using non-guaranteed elements to pay a portion of future
premiums;
(9) Except for policies
that can never develop nonforfeiture values, use an illustration that is
"lapse-supported"; or
(10) Use an
illustration that is not "self-supporting."
(c) If an interest rate used to determine the
illustrated non-guaranteed elements is shown, it shall not be greater than the
earned interest rate underlying the disciplined current scale.
Authority
G.S.
58-2-40;
58-58-1;
58-58-40;
58-60-15;
58-60-20;
58-63-15;
58-63-65;
Eff. January
1, 1997;
Readopted Eff. December 1,
2021.
