Ala. Admin. Code r. 482-1-120-.03

Current through Register Vol. 43, No. 1, October 31, 2024

Section 482-1-120-.03 - Applicability

(1) This chapter shall apply to all life insurance policies, with or without nonforfeiture values, issued on or after the effective date of this chapter, subject to the following exceptions and conditions.

(2) Exceptions:

(a) This chapter shall not apply to any individual life insurance policy issued on or after the effective date of this chapter if the policy is issued in accordance with and as a result of the exercise of a reentry provision contained in the original life insurance policy of the same or greater face amount, issued before the effective date of this chapter, that guarantees the premium rates of the new policy. This chapter also shall not apply to subsequent policies issued as a result of the exercise of such a provision, or a derivation of the provision, in the new policy.

(b) This chapter shall not apply to any universal life policy that meets all the following requirements:

1. Secondary guarantee period, if any, is five (5) years or less.

2. Specified premium for the secondary guarantee period is not less than the net level reserve premium for the secondary guarantee period based on the CSO valuation tables as defined in Rule 482-1-120-.04 and the applicable valuation interest rate.

3. The initial surrender charge is not less than 100 percent of the first year annualized specified premium for the secondary guarantee period.

(c) This chapter shall not apply to any variable life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts.

(d) This chapter shall not apply to any variable universal life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts.

(e) This chapter shall not apply to a group life insurance certificate unless the certificate provides for a stated or implied schedule of maximum gross premiums required in order to continue coverage in force for a period in excess of one year.

(3) Conditions.

(a) Calculation of the minimum valuation standard for policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits (other than universal life policies), or both, shall be in accordance with the provisions of Rule 482-1-120-.06.

(b) Calculation of the minimum valuation standard for flexible premium and fixed premium universal life insurance policies, that contain provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period shall be in accordance with the provisions of Rule 482-1-120-.07.

Ala. Admin. Code r. 482-1-120-.03

New Rule: February 18, 2000; effective March 1, 2000. Filed for codification in the Alabama Administrative Code by the Department of Insurance on January 17, 2003, pursuant to the Code of Ala. 1975, § 27-7-43.

Amended by Alabama Administrative Monthly Volume XLII, Issue No. 09, June 28, 2024, eff. 7/1/2024.

Author: Reyn Norman, Associate Counsel

Statutory Authority:Code of Ala. 1975, §§ 27-2-17 and 27-36A-1 to 27-36A-20.