N.J. Admin. Code § 11:4-24.4

Current through Register Vol. 56, No. 21, November 4, 2024

Section 11:4-24.4 - Juvenile insureds

(a) Because the smoker and nonsmoker mortality tables do not extend below age 15, the Department shall permit the following uses of the composite and smoker and nonsmoker mortality tables for juvenile insureds, as hereafter provided:

1. Insurers may use the composite mortality table for juvenile issues and continue to use such table for all future attained ages; or

2. Insurers may use the composite mortality table for juvenile issues and change to use of a smoker and nonsmoker mortality table when the insured's attained age is a specified age between 15 and 23.

i. When the insured reaches the attained age, the insurer shall notify the insured in writing at least 30 days prior to the effective date of the change in mortality tables of his or her option to elect smoker or nonsmoker status.

ii. Each insurer shall adopt a uniform default classification of either smoker or nonsmoker to which the insurer shall assign an insured who fails to respond to the notice described in (a)2i above.

iii. An insurer may only apply a default classification of smoker pursuant to ii above to an insured whose attained age is at least 18.

iv. The insurer shall identify such adopted uniform default classification in the notice described in (a)2i above and advise the insured therein that the insured shall be assigned the uniform default classification if the insured fails to respond to the notice.

v. Alternatively, at the insurer's option, the insurer may reclassify the insured as a nonsmoker upon reaching the attained age.

3. Insurers may use a reasonable extrapolation of the smoker and nonsmoker mortality tables for ages 15 and below. The submission shall include an actuarial memorandum which describes the basis for the extrapolation.

(b) Insurers may classify a juvenile as a smoker only if, at the time of the application, the juvenile responds to a smoking question in the affirmative.

1. Insurers may contest the response to the question concerning smoking status only if the contract specifically reserves such right, there is an entire contract provision in the policy which states that the application for the change in smoking status is attached to and made a part of the policy and the submission describes the settlement payable upon a successful contest. A contest shall be limited to the amount of coverage which is purchased by the difference between the smoker and nonsmoker rates.

2. If the insurer intends to waive the right to contest, the submission should include a statement to that effect from a company officer.

(c) The policy must accurately describe all mortality tables used as composite, smoker and nonsmoker, or extrapolation for all ages.

(d) The policy form shall accurately describe the process set forth at (a)2 above relating to insurer notification, insured election of smoker or nonsmoker status, the default classification resulting from failure to elect, and any automatic reclassification to nonsmoker.

(e) In fixed premium contracts, a change in smoker/nonsmoker classification pursuant to (a)2 above shall affect premium rates only and not the guaranteed nonforfeiture benefits. A fixed premium contract which provides for changes in smoker/nonsmoker classification pursuant to (a)2 above shall specify the guaranteed maximum smoker and nonsmoker premium.

N.J. Admin. Code § 11:4-24.4

New Rule, R.1996 d.81, effective 2/20/1996.
See: 27 New Jersey Register 3723(a), 28 New Jersey Register 1214(a).
Amended by R.2002 d.102, effective 4/1/2002.
See: 33 New Jersey Register 3863(a), 34 New Jersey Register 1439(a).
In (a)2 inserted i through v; inserted a new (d), and recodified former (d) as (e).