North Carolina Administrative Code
Title 11 - INSURANCE
Chapter 12 - LIFE AND HEALTH DIVISION
Section .1200 - ACCELERATED BENEFITS
Section 12 .1206 - DISCLOSURES
Current through Register Vol. 38, No. 18, March 15, 2024
(a) Descriptive Title. The term "accelerated benefit" shall be included in the descriptive title printed on the first page of the policy or rider. Products regulated under this Section shall not be described or marketed as long-term care insurance or as providing long-term care benefits.
(b) Tax Consequences. A disclosure statement is required at the time of application for the policy or rider and at the time the accelerated benefit payment request is submitted, which statement shall advise that receipt of accelerated benefits may be taxable and that assistance should be sought from a personal tax advisor. The statement shall be prominently displayed on the first page of the policy or rider and on any other related documents.
(c) Solicitation:
(d) Effect of the Benefit Payment. When a policy owner or certificate holder requests an acceleration, the insurer shall send a statement to the policy owner or certificate holder and irrevocable beneficiary showing any effect that the payment of the accelerated benefit will have on the policy's cash value, accumulation account, death benefit, premium, policy loans and policy liens. The statement shall disclose that:
Each time an accelerated benefit option is exercised the policy owner and certificate holder shall be given an endorsement, rider or schedule page that reflects any revisions to cash values, death benefits, accumulation accounts, premiums, policy loans, policy liens and any other values that change as a result of the payment or payments. When a previous disclosure statement becomes invalid as a result of an acceleration of the death benefit, the insurer shall send a revised disclosure statement to the policy owner or certificate holder and irrevocable beneficiary. When the insurer agrees to accelerate death benefits, the insurer shall issue an amended schedule page to the policyholder or notify the certificate holder under a group policy to reflect any new, reduced in-force face amount of the contract.
Authority
G.S.
58-2-40;
58-3-150;
58-7-15(1);
58-58-1;
Eff. March 1, 1992;
Pursuant to
G.S.
150B-21.3A, rule is necessary without substantive public interest Eff. May
1, 2018.