|TO:||Licenses, Insurers and Interested Parties|
|FROM:||Linda Ruthardt, Commissioner of Insurance|
|DATE:||March 30, 2000|
|RE:||Universal Life and Variable Life Policies With No-Lapse Guarantees|
|The Division of Insurance continues to receive for review Universal Life and Variable Life policies with no-lapse guarantees. No-Lapse guarantees designate a premium and a time period during which, if the designated premium is paid, the policy is guaranteed not to lapse. It has been the practice of the Division of Insurance to limit these provisions to five years.|
This bulletin removes that limit and sets forth guidelines to assist insurers with the filing of no-lapse guarantees. All actuarial information and actuarial certifications relative to proposed reserving information must be forwarded to the State Rating Bureau for review.
Definition of No-Lapse Guarantee: The guarantee that a flexible premium universal life insurance policy or a flexible premium variable life insurance policy will remain in force as long as a designated premium is paid and regardless of the magnitude of the accumulated account value.
Actuarial Memorandum: The requisite actuarial memorandum, prepared and signed by a qualified actuary, must contain the following:
Advertising Materials: Filings must include all advertising materials, including any illustrations used in marketing the contract form. Language in marketing materials must disclose:
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