Current through Register Vol. 41, No. 3, September 23, 2024
Each variable life insurance policy filed for approval in
this Commonwealth shall in addition to other applicable statutory requirements,
contain the following:
1. The first
page of each policy shall contain:
a. A
prominent statement in boldface type at least two points larger than the type
used for policy provisions, printed in all capital letters, that the amount or
duration of death benefits may be variable or fixed under specified
conditions;
b. A prominent
statement in boldface type at least two points larger than the type used for
policy provisions, printed in all capital letters, that cash values may
increase or decrease in accordance with the experience of the separate account
subject to any specified minimum guarantees;
c. A prominent statement in contrasting color
and in boldface type at least two points larger than the type used for policy
provisions, printed in all capital letters, describing any minimum death
benefit required pursuant to subdivision 2 of
14VAC5-80-120;
d. A statement describing the method, or a
reference to the policy provision which describes the method, for determining
the amount of insurance payable at death;
e. When appropriate a prominent statement in
boldface type at least two points larger than the type used for policy
provisions, printed in all capital letters, that the policy loan value is less
than 100% of the policy's cash value surrender value;
2.
a. For
scheduled premium policies, a provision for a grace period of not less than 31
days from the premium due date which shall provide that where the premium is
paid within the grace period, policy values will be the same, except for the
deduction of any overdue premium, as if the premium were paid on or before the
due date.
b. For flexible premium
policies, a provision for a grace period beginning on the policy processing day
when the total charges authorized by the policy that are necessary to keep the
policy in force until the next policy processing day exceed the amounts
available under the policy to pay such charges in accordance with the terms of
the policy. Such grace period shall end on a date not less than 61 days after
the mailing date of the report to policyholders required by subdivision 3 of
Article IX (14VAC5-80-320) .
The death benefit payable during the grace period will
equal the death benefit less any outstanding indebtedness and less any overdue
charges at the time of the last valuation of the policy preceding the beginning
of the grace period.
3.
a. For
scheduled premium policies, a provision that the policy will be reinstated at
any time within three years from the date of default upon the written
application of the insured, and evidence of insurability, including good
health, satisfactory to the insurer, unless the cash surrender value has been
paid or the period of extended insurance has expired, upon the payment of any
outstanding indebtedness arising subsequent to the end of the grace period
following the date of default together with accrued interest thereon to the
date of reinstatement and payment of an amount not exceeding the greater of:
(1) All overdue premiums with interest at a
rate not exceeding 6.0% per year compounded annually and any indebtedness in
effect at the end of the grace period following the date of default with
interest at a rate as provided in § 38.2-3308 of the Code of Virginia;
or
(2) 110% of the increase in cash
value resulting from reinstatement plus all overdue premiums for incidental
insurance benefits with interest at a rate not exceeding 6.0% per annum
compounded annually.
b.
For flexible premium policies a provision that the policy will be reinstated at
any time within three years from the date of default upon the written
application of the insured and evidence of insurability, including good health,
satisfactory to the insurer, unless the cash surrender value has been paid or
the period of extended insurance has expired, upon the payment of any
outstanding indebtedness arising subsequent to the end of the grace period
following the date of default together with accrued interest thereon to the
date of reinstatement and payment of an amount not exceeding the greater of:
(1) A charge not to exceed three months cost
of insurance; or
(2) 110% of the
increase in cash value resulting from reinstatement plus all overdue premiums
for incidental insurance benefits with interest at a rate not exceeding 6.0%
per annum compounded annually.
4. A full description of the benefit base and
of the method of calculation and application of any factors used to adjust
variable benefits under the policy;
5. A provision designating the separate
account to be used and stating that:
a. The
assets of such separate account shall be available to cover the liabilities of
the general account of the insurer only to the extent that the assets of the
separate account exceed the liabilities of the separate account arising under
the variable life insurance policies supported by the separate
account;
b. The assets of such
separate account shall be valued at least as often as any policy benefits vary
but at least monthly.
6.
A designation of the officers who are empowered to make an agreement or
representation on behalf of the insurer;
7. A provision setting forth conditions or
requirements as to the designation, or change of designation, of a beneficiary
and a provision for disbursement of benefits in the absence of a beneficiary
designation;
8. A statement of any
conditions or requirements concerning the assignment of the policy;
9. A description of any adjustments in policy
values to be made in the event of misstatement of age or sex of the
insured;
10. A provision stating
that the investment policy of the separate account shall not be changed without
the approval of the insurance supervisory official of the state of domicile of
the insurer, and that the approval process is on file with the
Commission;
11. A provision that
payments of variable death benefits in excess of any minimum death benefits,
cash values, policy loans, or partial withdrawals (except when used to pay
premiums) or partial surrenders may be deferred;
a. For up to six months from the date of
request, if such payments are based on policy values which do not depend on the
investment performance of the separate account, or
b. Otherwise, for any period during which the
New York Stock Exchange is closed for trading (except for normal holiday
closing) or when the Securities and Exchange Commission has determined that a
state of emergency exists which may make such payment impractical;
12. If settlement options are
provided, at least one such option shall be provided on a fixed basis
only;
13. A description of the
basis for computing the cash value and the surrender value under the policy
shall be included;
14. Premiums or
charges for incidental insurance benefits shall be stated separately;
and
15. The insurer may establish a
reasonable minimum cash value below which any nonforfeiture insurance options
will not be available. Upon termination of any policy if there is any cash
value, the cash value shall be returned to the owner of the policy.
Statutory Authority
§§ 12.1-13 and 38.2-3313 of the Code of
Virginia.