N.J. Admin. Code § 11:4-45.4

Current through Register Vol. 56, No. 24, December 18, 2024

Section 11:4-45.4 - Flexible factor forms; reporting requirements

(a) For any flexible factor form where cash values and/or death benefits are subject to variation on the basis of interest, mortality, or expense factors that may be adjusted by the insurer, or on the basis of premium amounts which the policyholder may unilaterally change or choose not to pay, the insurer shall provide each policyholder with a periodic report to notify each policyholder of his or her values and benefits. The report shall satisfy, at a minimum, the following requirements:

1. The report shall be provided at least annually, and shall show values applicable at both the beginning and end of the period covered by the report;

2. The report shall show the policy status as of a date no more than two months prior to the date of the mailing of the report and shall show all increments and decrements to values and benefits since the date as of which the last previous report provided value and benefit information;

3. Individual premiums received during the period covered by the report shall be identified as to amount, date of receipt, and the date on which the insurer first credited interest thereon, unless this information was previously provided in writing to the policyholder at the time each consideration was received;

4. Interest increments shall not be aggregated over different time periods but rather shall be segregated in sufficient detail to permit verification;

5. The report shall record all interest rates which applied to loaned and unloaned amounts during the reporting period;

i. In the case of policies with "buckets" or "generations" of interest, the Commissioner shall waive the requirement set forth in (a)5 above if:

(1) The report states that the insurer will provide information regarding interest rates and the methods utilized to calculate interest credits to loaned and unloaned values to the policyholder upon request and free of charge; and

(2) The information available upon request shall record all interest rates which applied to loaned and unloaned amounts during the reporting period, together with the amounts to which such rates apply.

ii. Notwithstanding any waiver granted pursuant to (a)5i above, the report shall indicate the interest rate(s) which applied to new premiums during the reporting period;

6. The report shall display all transactions and charges allowed under the policies, which shall be recorded by date. However, the Commissioner shall waive this requirement with respect to the recording of loan activity if:

i. The report states that the insurer will provide this information to the policyholder upon request and free of charge; and

ii. The information available upon request shall record all transactions for loan activity by date; and

7. If the value of the policy is such that it would not maintain insurance in-force until the anticipated effective date of the next periodic report, the report shall include a caution that the policy may be in danger of terminating without value in the next 12 months unless additional premium is paid.

(b) For all flexible-factor forms, the insurer shall notify policyholders of changes in the amount of premiums or premium factors. The notification required pursuant to this section shall be by periodic report, amendment to the policy form or letter.

(c) For policies to which (a) above applies, the periodic report set forth in that subsection may be utilized to satisfy the notification requirement set forth in (b) above. If so, the notification to the policyholder shall include any changes in amounts that have occurred since the effective date of the previous report together with any changes that have been finally adopted by the insurer and that will be applicable to the next subsequent reporting period.

(d) For forms which contain non-guaranteed premiums or rating factors, the notification of changes to the premiums or factors shall be in the form of a policy form amendment which shall modify all current and future non-guaranteed premium or rating factors that have changed and that were included in the original policy or in subsequent amendments. Any policy form amendments shall be submitted with the form submission for review and filing by the Commissioner in accordance with applicable law.

N.J. Admin. Code § 11:4-45.4

Amended by R.1998 d.337, effective 7/6/1998.
See: 30 New Jersey Register 275(a), 30 New Jersey Register 2492(a).
In (a), added ", together with the amounts to which such rates apply" at the end of 5i(3), and rewrote 6iii; and in (d), inserted "with the form submission" in the last sentence.
Amended by R.2000 d.130, effective 3/20/2000.
See: 31 New Jersey Register 3910(a), 32 New Jersey Register 1024(a).
In (a), rewrote 5 and 6; and in (b), deleted "insurer shall indicate in the cover letter to the submission whether the" following "The" in the second sentence.