North Dakota Administrative Code
Title 45 - Insurance, Commissioner of
Article 45-04 - Life Insurance
Chapter 45-04-01.1 - Life Insurance Illustrations Model Regulation
Section 45-04-01.1-04 - General rules and prohibitions

Universal Citation: ND Admin Code ยง 45-04-01.1-04

Current through Supplement No. 394, October, 2024

1. An illustration used in the sale of a life insurance policy must satisfy the applicable requirements of this chapter, be clearly labeled life insurance illustration, and contain the following basic information:

a. Name of insurer;

b. Name and business address of producer or insurer's authorized representative, if any;

c. Name, age, and sex of proposed insured, except where a composite illustration is permitted under this chapter;

d. Underwriting or rating classification upon which the illustration is based;

e. Generic name of policy, the company product name, if different, and form number;

f. Initial death benefit; and

g. Dividend option election or application of nonguaranteed elements, if applicable.

2. When using an illustration in the sale of a life insurance policy, an insurer or its producers or other authorized representatives shall not:

a. Represent the policy as anything other than a life insurance policy;

b. Use or describe nonguaranteed elements in a manner that is misleading or has the capacity or tendency to mislead;

c. State or imply that the payment or amount of nonguaranteed elements is guaranteed;

d. Use an illustration that does not comply with the requirements of this chapter;

e. 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;

f. Provide an applicant with an incomplete illustration;

g. 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;

h. Use the term "vanish" or "vanishing premium" or a similar term that implies the policy becomes paid up, to describe a plan for using nonguaranteed elements to pay a portion of future premiums;

i. Except for polices that can never develop nonforfeiture values, use an illustration that is lapse-supported; or

j. Use an illustration that is not self-supporting.

3. If an interest rate used to determine the illustrated nonguaranteed elements is shown, it may not be greater than the earned interest rate underlying the disciplined current scale.

General Authority: NDCC 28-32-02

Law Implemented: NDCC 26.1-33-02

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