Section Ins 401.05 - Individual Life and Annuity Contracts(a) All individual life policies and individual annuity contracts shall contain the following provisions: (1) All premiums shall be payable in advance either at the home office of the company or to the company's appointed producer upon delivery of the policy or contract, and: a. If requested, the policy or contract shall be signed by one or more of the officers of the company who shall be designated by title in the policy, and countersigned by the appointed producer; andb. The policy itself shall be a receipt for the first premium payment;(2) There shall be a grace period of 31 days within which the payment of any premium after the first payment may be made, during which period of grace: a. The policy shall continue in force;b. The amount of such premiums in arrears plus accrued interest, at a rate not exceeding the policy loan rate, shall be deducted from any claim arising in such period; andc. This premium provision shall not be applicable to single premium contracts, or to flexible payment annuity contracts that do not default upon nonpayment of premium;(3) For flexible premium life policies, there shall be a provision for a grace period beginning on the policy processing day when the total charges authorized by the policy that are necessary to keep the policy in force until the next policy processing day exceed the amounts available under the policy to pay such charges in accordance with the terms of the policy. The grace period shall end on a date not less than 61 days after the mailing of the notice to the policyholder pursuant to Ins 401.10(f), below;(4) There shall be provisions addressing cancellation of the policy and refund of unearned premium, provided however, if the policy provides for no refund of paid premium, the cancellation date shall be set, at earliest, on the first day the next premium payment would otherwise be due and owing;(5) The entire contract between the parties shall consist of the policy together with a copy of the signed and completed application;(6) No statement made by the insured or on his behalf shall be used in defense of a claim under the policy unless it is contained in a written application and a copy endorsed upon or attached to the policy when issued;(7) All statements made by, or by the authority of, the applicant for the issuance, reinstatement, or renewal of the contract shall, in the absence of fraud, be deemed representations and not warranties;(8) Pursuant to the provisions of RSA 408:10, the policy shall be incontestable after it has been in force during the lifetime of the insured for 2 years from its date, except for: a. The nonpayment of premiums;b. Violations of the policy relating to naval or military service in time of war; orc. At the option of the company: 1. Provisions granting or increasing benefits in the event of total and permanent disability; and2. Provisions that grant additional insurance specifically against death by accident;(9) An incontestable provision shall not be required in any policy or contract where the only statements required as a condition of issuing the contract are those pertaining to age, gender, and personal identity;(10) If the insured's age or gender has been misstated, any benefit under the policy shall be such as the premiums would have purchased for the correct age or gender; and(11) The policy or contract shall participate in its share of the divisible surplus of the company at annual intervals that begin no later than the fifth policy year, unless such policies or contracts are nonparticipating, issued as sub-standard, or provide nonforfeiture benefits in exchange for lapsed or surrendered policies or contracts.(b) Policy loan values and policy loan provisions for individual life insurance and annuities shall provide that:(1) After the policy has been in force for 3 full years with all premiums due having been paid, the insurer shall advance an amount up to but not exceeding the loan value of the policy upon proper assignment or pledge of the policy and on the sole security thereof;(2) The loan value shall be at least equal to the cash surrender value available at the end of the policy year, less the sum of premiums falling due from the date of the loan to the end of the policy year, less any existing indebtedness, less the interest on any existing indebtedness to the end of the policy year;(3) Interest due at the end of the policy year, if not paid when due, shall be added to the existing loan payable at the same interest rate as the existing loan or in advance at the equivalent effective rate;(4) Policy provisions reserve to the insurer the right to defer loan grants for up to 6 months after the application is filed, other than for the payment of premiums;(5) The provisions of Ins 401.05(b)(1) and (2) shall not be applicable to term insurance or to any policy or contract of pure endowment, variable annuity, annuity, or reversionary annuity; and(6) The provisions of Ins 401.05(b)(1) and (2) shall not be construed as prohibiting policy loan provisions in any annuity contract.(c) Rates of interest charged on life insurance policy loans shall provide: (1) A provision permitting a maximum interest rate of not more than 8 percent per annum;(2) A provision permitting an adjustable maximum interest rate established from time to time by the life insurer, which interest rate shall not exceed the higher of a. or b. below: a. The published monthly average for the calendar month ending 2 months before the date on which the rate is determined. For purposes of this rule, "published monthly average" means the Moody's Corporate Bond Yield Average - Monthly Averages Corporates as published by Moody's Investors Service, Inc. and available as referenced in Appendix B; orb. The rate used to compute the cash surrender values under the policy during the applicable period plus one percent per annum;(3) If the maximum rate of interest to be charged on a policy loan is subject to (2) above, the policy shall contain a provision setting forth the frequency at which the rate is to be determined for that policy;(4) If the maximum rate of interest to be charged on a policy loan is subject to (2) above, the maximum rate for each policy shall be determined: a. At regular intervals at least once every 12 months, but not more frequently than once in any 3-month period;b. At the intervals specified in the policy, wherein the rate being charged may be increased whenever such increase as determined pursuant to (2) above would increase that rate by 1/2 percent or more per annum; andc. At the same intervals, wherein there is a reduction in the rate being charged whenever such reduction as determined pursuant to (2) above would decrease the rate being charged by 1/2 percent or more per annum;(5) The insurer shall: a. Notify the policyholder at the time a cash loan is made of the initial rate of interest on the loan;b. Notify the policyholder with respect to premium loans of the initial rate of interest on the loan as soon as it is practical to do so after making the initial loan. Notice to the policyholder shall not be required when a further premium loan is added, except as provided in c. below;c. Send advance notice of any increase in the rate to policyholders with outstanding loans; andd. Include in the notices required in c. above the policy loan interest rates and, if an adjustable interest rate, the frequency at which the rate will change;(6) No policy shall terminate nor shall the insurer deny or fail to provide coverage during the policy term solely as a result of a change in the policy loan interest rate, and the life insurer shall maintain coverage during that policy year until the time at which the policy would otherwise have terminated if there had been no change during that policy year; and(7) For purposes of this paragraph: a. The rate of interest on policy loans permitted by the rules stated above includes the interest rate charged on reinstatement of policy loans for the period during and after any lapse of a policy;b. The term "policy loan" shall include any premium loan made under a policy to pay one or more premiums that were not paid to the life insurer as they fell due;c. The term "policyholder" shall include the owner of the policy or the person designated to pay premiums as shown on the records of the life insurer; andd. The term "policy" shall include certificates issued by a fraternal benefit society and annuity contracts that provide for policy loans. (d) Upon the request of the policyholder, unless the cash surrender value of a permanent life insurance policy has been paid out in full or the period of extended insurance has expired, any life insurance policy shall be reinstated during the life of the insured anytime within 3 years of the date of default if: (1) Evidence of insurability satisfactory to the insurer is provided to the insurer;(2) Payment is tendered to the insurer in an amount not to exceed the larger of: a. The sum of: 1. Overdue premiums, including interest at a rate not to exceed 8 percent per annum, compounded annually; and2. Any outstanding policy loans, including interest at a rate that would be permitted under this rule if the policy had not lapsed; orb. One hundred ten percent of the increase in cash surrender value resulting from reinstatement.(e) Term life insurance policies shall provide for reinstatement subject to the same requirements set forth in (d)(1) and (2)a.1. and b. above, any time during the life of the insured and prior to the policy expiration date.(f) Except for funding agreements, the following provision or its equivalent shall appear in a conspicuous place on the face page of the policy: "This policy may, at any time within 10 days after its receipt by the policyholder, be returned by delivering it or mailing it to the company or to the agent through whom it was purchased. Immediately upon delivery or mailing, the policy will be deemed void from the beginning, and any premium paid on it will be refunded."
(g) For purposes of (f) above, a "funding agreement" means an agreement issued by a life insurance company, not based on mortality or morbidity, providing for the accumulation of funds by the insurer for the purpose of making one or more payments to a designated individual or entity, where the initial premium paid is $1,000,000 or more.(h) Unless the insurer has adopted a procedure to obtain a policyholder's dated and signed receipt for the delivery of the policy pursuant to (f) above, it shall be presumed that the date of delivery is the date shown in the policyholder's records or by his memory unless there is evidence sufficient to void this presumption.(i) Life insurance policies designed to permit increases or decreases in the premiums payable shall state in the policy the maximum premium or the schedule of maximum premiums applicable for the entire duration of the policy.(j) Supplemental contracts shall be subject to all insurance laws and parts that would be applicable to accident and health insurance forms containing similar provisions or benefits.(k) Arbitration provisions shall be prohibited.(l) Graded death benefits life insurance policies shall pay the policy face value after 2 years of premium payments.(m) The following exclusions shall be the only exclusions permitted in an individual life policy or individual annuity contract:(1) Except for those exclusions that relate to accidental death benefits, any policies that contain any exclusions violating this part shall be operative as if such prohibited exclusions were not included;(2) Policy exclusion provisions shall: a. Contain language substantially similar to the language of the following subclauses;b. Be set out in a separately titled policy section; andc. Prominently display reference to exclusion (3)c. below in the letter of transmittal and on the policy face in type at least as large as 12-point boldface type;(3) If a policy includes an exclusion, it shall contain only those exclusions listed below: a. Death resulting from suicide within 2 years of the issue date of the policy, or, if later, the last date on which reinstatement was applied for in writing and accepted by the insurer;b. Death resulting from a declared or undeclared war, if death occurs: 1. While the insured is outside the 50 states of the United States, D.C., and Canada and is in military service or a civilian unit required to serve with a military force;2. Within 6 months after the insured returns to the United States, D.C., or Canada from military service or from service in a civilian unit required to serve with a military force, provided the insured is still in military service at the time of death; or3. Within 6 months after the insured returns from service in a civilian unit required to serve with a military force outside the 50 states of the United States, D.C., or Canada, provided the insured is still in such service at the time of death; andc. Death as a result of aviation, other than as a fare-paying passenger, or other than military personnel, except the crew, aboard military multi-engine fixed wing air transports within the United States; and(4) In the event of death occurring from one of the causes delineated in (3) above, the premium shall be returned in at least the following manner: a. The amount of the gross premiums paid, less dividends applicable, and less any indebtedness for policies up to and including 2 years from the date of issue; andb. After 2 years from date of issue, the greater of:1. The reserve on the face amount of the policy together with the reserve for any dividend additions, less indebtedness and including interest; or2. Due and accrued of gross premiums paid, less dividends applicable, and less any indebtedness.N.H. Admin. Code § Ins 401.05
#1900, eff 1-1-82; ss by #4287, eff 7-1-87; ss by #5653, eff 7-1-93; ss by #7016, INTERIM, eff 7-1-99, EXPIRED: 10-29-99
New. #8726, eff 9-18-06; ss by #9334, eff 12-5-08
Amended by Volume XXXVII Number 15, Filed April 13, 2017, Proposed by #12126, Effective 3/8/2017, Expires 3/8/2027.