Ill. Admin. Code tit. 50 § 1409.20

Current through Register Vol. 48, No. 43, October 25, 2024

Section 1409.20 - Applicability

This Part shall apply to all life insurance policies, with or without nonforfeiture values issued on or after January 1, 2000, subject to the following exceptions and conditions:

a) Exceptions

1) This Part does not apply to any individual life insurance policy issued on or after January 1, 2000 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 or any individual life insurance policy of the same or greater face amount, issued before January 1, 2000 that guarantees the premium rates of the new policy. This Part also does 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.

2) This Part does not apply to any universal life policy that meets all the following requirements with regard to all secondary guarantee periods:

A) Secondary guarantee period, if any, is 5 years or less;

B) Specified premium for the secondary guarantee period is not less than the net level reserve premium for the secondary guarantee period based on the 1980 CSO valuation tables as defined in Section 1409.30 and the applicable valuation interest rate; and

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

3) This Part does 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.

4) This Part does 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.

5) This Part does not apply to group life insurance certificates unless the certificates provide 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.

6) This Part does not apply to any policy that is subject to the requirements of a principle-based valuation as determined by Section 223(8)(d)(ii) of the Code.

b) Conditions

1) Calculation of the minimum valuation standard for policies with guaranteed nonlevel premiums or guaranteed nonlevel benefits (other than universal life policies), or both, shall be in accordance with the provisions of Section 1409.50.

2) 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 Section 1409.60.

3) For preneed insurance contracts and similar policies and contracts, as defined by 50 Ill. Adm. Code 1414.30, to which the requirements of this Part apply, the minimum mortality standard for calculating the minimum valuation standard in accordance with this Part shall be the 1980 CSO Valuation Tables without select factors, or the 2001 CSO Mortality Table in accordance with the Transitional Rules prescribed in 50 Ill. Adm. Code 1414.50.

Ill. Admin. Code tit. 50, § 1409.20

Amended at 32 Ill. Reg. 19713, effective January 1, 2009

Amended at 42 Ill. Reg. 14225, effective 7/12/2018