Current through Register Vol. XLI, No. 38, September 20, 2024
For the purposes of this rule, the following definitions shall
apply:
3.1. "Buyer's Guide" means the Life
Insurance Buyer's Guide adopted by the National Association of Insurance
Commissioners (NAIC) or language approved by the West Virginia Insurance
Commissioner and appended to this rule as Appendix A.
3.2. "Current scale of nonguaranteed elements"
means a formula or other mechanism that produces values for an illustration as if
there is no change in the basis of those values after the time of
illustration.
3.3. "Generic name" means
a short title that is descriptive of the premium and benefit patterns of a policy or
a rider.
3.4. "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 rule, 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.
3.5. "Nonguaranteed elements" means the premiums,
credited interest rates (including any bonus), benefits, values, non-interest based
credits or charges, or formulas used to determine any of these, that are subject to
company discretion and are not guaranteed at issue. An element is considered
nonguaranteed if any of the underlying nonguaranteed elements are used in its
calculation.
3.6. "Policy data" means a
display or schedule of numerical values, both guaranteed and nonguaranteed, for each
policy year or a series of designated policy years for the following information:
Illustrated annual, other periodic, and terminal dividends; premiums; death
benefits; cash surrender values and endowment benefits.
3.7. "Policy summary" means a written statement
describing the elements of the policy, including, but not limited to:
a. A prominently placed title reading: STATEMENT
OF POLICY COST AND BENEFIT INFORMATION;
b. The name and address of the insurance producer
or, if no producer is involved, a statement of the procedure for obtaining responses
to inquiries regarding the Policy Summary;
c. The full name and home office or administrative
office address of the company by which the life insurance policy is to be or has
been written;
d. The generic name of the
basic policy and each rider;
e. The
following amounts, where applicable, for the first five (5) policy years and
representative policy years thereafter sufficient to clearly illustrate the premium
and benefit patterns, including at least one age from sixty (60) through sixty-five
(65) and policy maturity:
1. The annual premium
for the basic policy;
2. The annual
premium for each optional rider;
3. The
amount payable upon death at the beginning of the policy year, regardless of the
cause of death, other than suicide or other specifically enumerated exclusions, that
is provided by the basic policy and each optional rider, with benefits provided
under the basic policy and each rider shown separately;
4. The total guaranteed cash surrender values at
the end of the year, with values shown separately for the basic policy and each
rider; and
5. Any endowment amounts
payable under the policy that are not included under cash surrender values as
provided in paragraph 4 of this subdivision;
f. The effective policy loan annual percentage
interest rate, if applicable, specifying whether the rate is applied in advance or
in arrears. If the policy loan interest rate is adjustable, the policy summary must
also indicate that the annual percentage rate will be determined by the company in
accordance with the provisions of the policy and the applicable law; and
g. The date on which the policy summary was
prepared.
