Section R. 500.865 - Reports to policyholdersRule 25. Any insurer delivering or issuing for delivery in this state any variable life insurance policies shall mail to each variable life insurance policyholder, at his or her last known address, all of the following statements, notice, report, and information:
(a) Within 30 days after each anniversary of the policy, a statement or statements of all of the following: (i) The cash surrender value.(iii) Any partial withdrawal.(vi) Any optional payments allowed under the policy pursuant to R 500.851 computed as of the policy anniversary date. Such statement may be furnished within 30 days after a specified date in each policy year if the information contained therein is computed as of a date not more than 65 days before the mailing of such notice. This statement shall state that, in accordance with the investment experience of the separate account, the cash values and the variable death benefit may increase or decrease and the statement shall prominently identify any value described therein which may be recomputed before the next statement required by this rule. If the policy guarantees that the variable death benefit on the next policy anniversary date will not be less than the variable death benefit specified in such statement, the statement shall be modified to so indicate. For flexible premium policies, the statement shall contain a reconciliation of the change since the previous statement in cash value and cash surrender value, if different, because of payments made, less deductions for expense charges; withdrawals; investment experience; insurance charges; and any other charges made against the cash value. In addition, the statement shall show the projected cash value and cash surrender value, if different, as of 1 year from the end of the period covered by the statement assuming that planned periodic premiums, if any, are paid as scheduled, guaranteed costs of insurance are deducted, and the net return is equal to the guaranteed rate or, in the absence of a guaranteed rate, is not more than zero. If the projected value is less than zero, a warning message shall be included that states that the policy may be in danger of terminating without value in the next 12 months unless additional premium is paid.(b) Annually, a statement or statements including all of the following information: (i) A summary of the financial statement of the separate account, including a calculation of the net investment return, based on the annual statement last filed with the commissioner.(ii) The net investment return of the separate account for the most recent year and, for each year after the first, a comparison of the investment rate of the separate account during the most recent year with the investment rate during prior years, up to a total of 5 years, when available.(iii) A list of investments held by the separate account as of a date not earlier than the end of the last year for which an annual statement was filed with the commissioner.(iv) Any charges, taxes, and brokerage fees determined on an accrual basis payable by the separate account during the previous year, each expressed as a dollar amount and a percentage and the total expressed as a dollar amount and as a percentage of the assets of the separate account.(v) A statement of any change in any of the following since the last statement:(A) The investment objective and orientation of the separate account.(B) Any investment restriction or material quantitative or qualitative investment requirement applicable to the separate account.(C) The investment adviser of the separate account.(vi) The name of each broker or dealer handling portfolio transactions on behalf of the separate account in which the insurer or an affiliate has any material interest, directly or indirectly, and the nature of such transactions and the amount of compensation received by each such broker or dealer from business originating with the separate account during the preceding fiscal year.(vii) The names and principal occupations of each principal executive officer and each director of the insurer.(viii) The names of all parents of the insurer and the basis of control of the insurer, and the name of any person who is known to own, of record or beneficially, 10% or more of the outstanding voting securities of the company.(c) Notwithstanding the requirements in subdivision (b) of this rule, a notice of any change in investment policy of the separate account, pursuant to R 500.859, shall be provided not later than 6 months from the effective date of that change. This requirement shall be considered satisfied if an annual report containing such notice is provided not later than 6 months from the effective date of the change or if a substantially similar notice is made pursuant to any federal securities laws not later than 6 months from the effective date.(d) For flexible premium policies, a statement shall be sent to the policyholder if the amounts available under the policy, on any policy processing day, to pay the charges authorized by the policy are less than the amount necessary to keep the policy in force until the next following policy processing day. The statement shall indicate the minimum payment required under the terms of the policy to keep it in force and the length of the grace period for payment of such amount.(e) Such additional information concerning the variable life insurance operations or the variable life insurance separate accounts as the commissioner shall deem appropriate.Mich. Admin. Code R. 500.865