Utah Administrative Code
Topic - Insurance
Title R590 - Administration
Rule R590-79 - Life Insurance Disclosure Rule
Section R590-79-4 - Disclosure Requirements

Universal Citation: UT Admin Code R 590-79-4

Current through Bulletin 2024-06, March 15, 2024

(1) The insurer shall provide a buyer's guide and either a policy summary or illustration when the policy is delivered or prior to delivery of the policy if requested.

(2)

(a) The policy summary must be a separate document.

(b) Any information required to be disclosed must be displayed in a way that does not minimize or obscure any portion of the information.

(c) Any amount that remains level for two or more years of the policy may be represented by a single number if it is clearly indicated which amount applies for each policy year.

(d) An amount in Subsection (3)(e) shall be listed in total, not on a per-thousand nor per-unit basis.

(e) If more than one insured is covered under one policy or rider, a death benefit shall be displayed separately for each insured or for each class of insureds if death benefits do not differ within the class.

(f) A zero amount shall be displayed as zero and may not be displayed as a blank space.

(3) A policy summary must include the following information:

(a) A prominently placed title as follows: STATEMENT OF POLICY COST AND BENEFIT INFORMATION.

(b) The name and address of the insurance producer or, if no producer is involved, the procedure to be followed to receive a response to an inquiry regarding the policy summary.

(c) The full name and home office or administrative office address of the company in which the life insurance policy is to be or has been written.

(d) The generic name of the policy and each rider.

(e) The following amounts, where applicable, for the first five policy years and representative policy years thereafter, sufficient to illustrate the premium and benefit patterns, including the 10th and 20th policy years, and at least one age from 60 through 65 or maturity, whichever is earlier:
(i) The annual premium for the policy.

(ii) The annual premium for each optional rider.

(iii) The guaranteed amount payable upon death, at the beginning of the policy year regardless of the cause of death or other specifically enumerated exclusion, that is provided by the policy and each optional rider, with benefits provided under the policy and each rider shown separately.

(iv) The total guaranteed cash surrender values at the end of the year with values shown separately for the policy and each rider.

(v) The guaranteed endowment amounts payable under the policy that are not included under the guaranteed cash surrender values in Subsection (3)(e)(iv).

(f)
(i) The effective policy loan annual percentage interest rate, if the policy contains this provision, specifying whether this rate is applied in advance or in arrears.

(ii) If the policy loan interest rate is adjustable, the policy summary shall indicate the maximum annual percentage rate and shall indicate that the annual percentage rate will be determined by the company in accordance with the provisions of the policy and applicable law.

(g) The date on which the policy summary is prepared.

(4) For the purposes of this rule, the annual premium for a policy or rider, for which the company reserves the right to change the premium, shall be the maximum annual premium.

(5) For a policy commonly called "universal life insurance" and any similarly structured policy, the policy summary shall indicate when the policy will expire based on the interest rates and mortality rates and other charges guaranteed in the policy and the anticipated or assumed annual premiums shown in the policy summary.

(6) Upon request by the policyholder, the insurer shall furnish either policy data or an in -force illustration as follows:

(a) For a policy issued prior to January 1, 1997, the insurer shall furnish policy data or an in-force illustration.

(b) For a policy issued on or after January 1, 1997 , and declared not to be used with an illustration, the insurer shall furnish policy data, limited to guaranteed values or an in-force illustration.

(c) For a policy issued on or after January 1, 1997, and declared to be used with an illustration, the insurer shall provide an in-force illustration.

(d)
(i) Unless otherwise requested, the policy data shall be provided for 20 consecutive years beginning with the previous policy anniversary.

(ii) The statement of policy data shall include nonguaranteed elements according to the current scale, the amount of outstanding policy loans, and the current policy loan interest rate.

(iii) Any policy value shown shall be based on the current application of nonguaranteed elements in effect at the time of the request.

(iv) The insurer may charge a reasonable fee for the preparation of the statement after providing one annually without charge.

(7) For a life insurance policy or certificate with a death benefit not exceeding $15,000:

(a) the insurer shall disclose the following:
(i) the limited death benefit whenever a policy limits death benefits during a period following the inception date of coverage; and

(ii) the possibility that premiums paid over several years may exceed the death benefit whenever that possibility exists; and

(b) the disclosure shall be provided to the applicant no later than delivery of the policy or certificate.

(8) The following information shall be disclosed at the time an application is made for a preneed funeral contract or prearrangement that is or will be funded by a life insurance policy, prior to accepting the applicant's initial premium or deposit:

(a) the fact that a life insurance policy is involved or is being used to fund a prearrangement;

(b) the nature of the relationship among the soliciting producer or producers, the provider of the funeral or cemetery merchandise or services, the administrator, and any other person;

(c) the relationship of the life insurance policy to the funding of the prearrangement and the nature and existence of any guarantees relating to the prearrangement;

(d) the impact on the prearrangement of any:
(i) changes in the life insurance policy, including changes in the assignment, beneficiary designation, or use of the proceeds;

(ii) penalties to be incurred by the policyholder due to failure to make premium payments; and

(iii) penalties to be incurred or monies to be received due to cancellation or surrender of the life insurance policy;

(f) a list of the merchandise and services that are applied or contracted for in the prearrangement and any relevant information concerning the price of the funeral services, including an indication that the purchase price is either guaranteed at the time of purchase or to be determined at the time of need;

(g) any information concerning what occurs and whether any entitlements or obligations arise if there is a difference between the proceeds of the life insurance policy and the amount needed to fund the prearrangement; and

(h) whether a sales commission or other form of compensation is being paid and the identity of each individual or entity to whom it is paid.

Disclaimer: These regulations may not be the most recent version. Utah 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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