Current through Register Vol. 39, No. 6, September 16, 2024
(a) Unless
otherwise stated in Chapter 58 of the North Carolina General Statutes, this
Section shall not apply to transactions involving:
(1) Credit life insurance;
(2) Group life insurance or group annuities
where there is no direct solicitation of individuals by an insurance producer.
Direct solicitation does not include any group meeting held by an insurance
producer solely for the purpose of educating or enrolling individuals or, when
initiated by an individual member of the group, assisting with the selection of
investment options offered by a single insurer in connection with enrolling
that individual. Group life insurance or group annuity certificates marketed
through direct response solicitation is subject to the provisions of
11 NCAC
12 .0608;
(3) Group life insurance and annuities used
to fund prearranged funeral contracts;
(4) An application to the existing insurer
that issued the existing policy or contract when a contractual change or a
conversion privilege is being exercised; or, when the existing policy or
contract is being replaced by the same insurer pursuant to a program filed with
and approved by the Commissioner; or, when a term conversion privilege is
exercised among corporate affiliates;
(5) Proposed life insurance that is to
replace life insurance under a binding or conditional receipt issued by the
same company;
(6) Policies or
contracts used to fund:
(A) An employee
pension or welfare benefit plan that is covered by the Employee Retirement and
Income Security Act (ERISA);
(B) A
plan described by Sections 401(a), 401(k) or 403(b) of the Internal Revenue
Code, where the plan, for purposes of ERISA, is established or maintained by an
employer;
(C) A governmental or
church plan defined in Section 414 of the Internal Revenue Code, a governmental
or church welfare benefit plan, or a deferred compensation plan of a state or
local government or tax exempt organization under Section 457 of the Internal
Revenue Code; or
(D) As described
in the Internal Revenue Code, a nonqualified deferred compensation arrangement
established or maintained by an employer or plan sponsor.
(7) Where new coverage is provided under a
life insurance policy or annuity contract and the cost is borne wholly by the
insured's employer or by an association of which the insured is a
member;
(8) Existing life insurance
that is a non-convertible term life insurance policy that will expire in five
years or less and cannot be renewed;
(9) Immediate annuities that are purchased
with proceeds from an existing contract. Immediate annuities purchased with
proceeds from an existing policy are not exempt from the rules in this Section;
or
(10) Structured
settlements.
(b)
Notwithstanding
11 NCAC
12 .0604(a)(6), the rules in
this Section apply to policies or contracts used to fund any plan or
arrangement that is funded solely by contributions an employee elects to make,
whether on a pre-tax or after tax-basis, and where the insurer has been
notified that plan participants may chose from among two or more insurers and
there is a direct solicitation of an individual employee by an insurance
producer for the purchase of a contract or policy. As used in this Paragraph,
direct solicitation does not include any group meeting held by an insurance
producer solely for the purpose of educating individuals about the plan or
arrangement or enrolling individuals in the plan or arrangement, or when
initiated by an individual employee, assisting with the selection of investment
options offered by a single insurer in connection with enrolling that
individual employee.
(c) Registered
contracts are exempt from the requirements of
11 NCAC
12 .0606(2) and 12
.0612(a)(2) with respect to the provision of illustrations or policy summaries;
however, premium or contract contribution amounts and identification of the
appropriate prospectus or offering circular are required instead.
Authority
G.S.
58-2-40;
58-3-115;
58-58-1;
58-58-40;
Eff. October
1, 1985;
Amended Eff. February 1, 2008; August 1, 2004; April 8,
2002; November 1, 1989;
Pursuant to
G.S.
150B-21.3A, rule is necessary without
substantive public interest Eff. May 1, 2018.
