Rhode Island Code of Regulations
Title 230 - Department of Business Regulation
Chapter 20 - Insurance
Subchapter 25 - LIFE AND ANNUITIES
Part 14 - Life Insurance Illustrations (230-RICR-20-25-14)
Section 230-RICR-20-25-14.4 - Definitions
Universal Citation: 230 RI Code of Rules 20 25 14.4
Current through September 18, 2024
A. For the purposes of this regulation:
1. "Actuarial Standards Board" means the
board established by the American Academy of Actuaries to develop and
promulgate standards of actuarial practice.
2. "Contract premium" means the gross premium
that is required to be paid under a fixed premium policy, including the premium
for a rider for which benefits are shown in the illustration.
3. "Currently payable scale" means a scale of
non-guaranteed elements in effect for a policy form as of the preparation date
of the illustration or declared to become effective within the next ninety-five
(95) days.
4. "Disciplined current
scale" means a scale of non-guaranteed elements constituting a limit on
illustrations currently being illustrated by an insurer that is reasonably
based on actual recent historical experience, as certified annually by an
illustration actuary designated by the insurer. Further guidance in determining
the disciplined current scale as contained in standards established by the
Actuarial Standards Board may be relied upon if the standards:
a. Are consistent with all provisions of this
regulation;
b. Limit a disciplined
current scale to reflect only actions that have already been taken or events
that have already occurred;
c. Do
not permit a disciplined current scale to include any projected trends of
improvements in experience or any assumed improvements in experience beyond the
illustration date; and
d. Do not
permit assumed expenses to be less than minimum assumed expenses.
5. "Generic name" means a short
title descriptive of the policy being illustrated such as "whole life," "term
life" or "flexible premium adjustable life."
6. "Guaranteed elements" and "non-guaranteed
elements"
a. "Guaranteed elements" means the
premiums, benefits, values, credits or charges under a policy of life insurance
that are guaranteed and determined at issue.
b. "Non-guaranteed elements" means the
premiums, benefits, values, credits or charges under a policy of life insurance
that are not guaranteed or not determined at issue.
7. "Illustrated scale" means a scale of
non-guaranteed elements currently being illustrated that is not more favorable
to the policy owner than the lesser of:
a. The
disciplined current scale; or
b.
The currently payable scale.
8. "Illustration" means a presentation or
depiction that includes non-guaranteed elements of a policy of life insurance
over a period of years and that is one of the three (3) types defined below:
a. "Basic illustration" means a ledger or
proposal used in the sale of a life insurance policy that shows both guaranteed
and non-guaranteed elements.
b.
"Supplemental illustration" means an illustration furnished in addition to a
basic illustration that meets the applicable requirements of this regulation,
and that may be presented in a format differing from the basic illustration,
but may only depict a scale of non-guaranteed elements that is permitted in a
basic illustration.
c. "In force
illustration" means an illustration furnished at any time after the policy that
it depicts has been in force for one year or more.
9. "Illustration actuary" means an actuary
meeting the requirements of §
14.11 of this Part who certifies to
illustrations based on the standard of practice promulgated by the Actuarial
Standards Board.
10. "Insurance
Commissioner" or "Commissioner" means the Director of the Department of
Business Regulation or his or her designee.
11. "Lapse-supported illustration" means an
illustration of a policy form failing the test of self-supporting as defined in
this regulation, under a modified persistency rate assumption using persistency
rates underlying the disciplined current scale for the first five (5) years and
100 percent policy persistency thereafter.
12. "Minimum assumed expenses" means the
minimum expenses that may be used in the calculation of the disciplined current
scale for a policy form. The insurer may choose to designate each year the
method of determining assumed expenses for all policy forms from the following:
a. Fully allocated expenses;
b. Marginal expenses; and
c. A generally recognized expense table based
on fully allocated expenses representing a significant portion of insurance
companies and approved by the National Association of Insurance Commissioners
or by the commissioner.
d. Marginal
expenses may be used only if greater than a generally recognized expense table.
If no generally recognized expense table is approved, fully allocated expenses
must be used.
13.
"Non-term group life" means a group policy or individual policies of life
insurance issued to members of an employer group or other permitted group
where:
a. Every plan of coverage was selected
by the employer or other group representative;
b. Some portion of the premium is paid by the
group or through payroll deduction; and
c. Group underwriting or simplified
underwriting is used.
14. "Policy owner" means the owner named in
the policy or the certificate holder in the case of a group policy.
15. "Premium outlay" means the amount of
premium assumed to be paid by the policy owner or other premium payer
out-of-pocket.
16.
"Self-supporting illustration" means an illustration of a policy form for which
it can be demonstrated that, when using experience assumptions underlying the
disciplined current scale, for all illustrated points in time on or after the
fifteenth policy anniversary or the twentieth policy anniversary for
second-or-later-to-die policies (or upon policy expiration if sooner), the
accumulated value of all policy cash flows equals or exceeds the total policy
owner value available. For this purpose, policy owner value will include cash
surrender values and any other illustrated benefit amounts available at the
policy owner's election.
Disclaimer: These regulations may not be the most recent version. Rhode Island may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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