W. Va. Code R. § 114-11A-3

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 114-11A-3 - Definitions

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.

W. Va. Code R. § 114-11A-3