N.J. Admin. Code § 11:4-45.6

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

Section 11:4-45.6 - Variable life insurance; periodic report requirements

(a) Any periodic report for use with a variable life form shall satisfy, at a minimum, the following requirements:

1. The report shall be provided at least annually, and shall show values by fund, sub-account and division (including, but not limited to, dollar and unit values, if the product has unit 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 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. The report shall state that, in accordance with the investment experience of the separate account, the cash values and variable death benefit may increase or decrease;

4. If the report shows projected values, it shall describe the assumptions (premiums, charges, and net return) used to calculate the projections; and

5. If, as of the reporting date, any projected value shown in the report is less than zero, 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) Any periodic report for use with a variable life form, which is a 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, shall satisfy, at a minimum, the following requirements:

1. The report shall include a monthly or quarterly display of positive and negative investment performance for each sub-account, fund or division of the separate account to which money was allocated during the reporting period;

2. Except as provided in (b)3 below, the report shall record the following transactions by date:

i. Premium receipt;

ii. Loans, incurred and repaid;

iii. Partial surrenders or withdrawals;

iv. Transfers; and

v. Monthly deductions;

3. Alternatively to (b)2 above, for any transactions for which transaction or confirmation notices are sent, the report may show an aggregate amount for each such type of transaction, except that transfers need not be shown;

i. The Commissioner shall waive the requirement set forth in (b)2 above for loan activity if:

(1) The report states that the insurer will provide this information to the policyholder upon request and free of charges; and

(2) The information available upon request shall record transactions set forth in (b)2 above by date for loan activity;

4. The report shall display interest increments separately from other increments and decrements. Interest increments shall not be aggregated over different time periods but shall be segregated in sufficient detail to permit verification; and

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 (b)5 above if:

(1) The report states that the insurer will provide the interest rates and crediting methodology 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 (b)5i above, the report shall record the interest rates applied to monies newly allocated to a fixed account option during the reporting period, unless such interest rates are provided by the insurer in a transaction or confirmation notice at the time of allocation.

(c) In addition to the requirements set forth in (a) above, the periodic report and submission shall satisfy the requirement set forth in N.J.A.C. 11:4-45.4(b), (c) and (d).

N.J. Admin. Code § 11:4-45.6

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) and (b), substituted references to variable life forms for references to individual variable life forms in the introductory paragraphs; and in (b)5i(3), added ", together with the amounts to which such rates apply" at the end.
Amended by R.2000 d.130, effective 3/20/2000.
See: 31 New Jersey Register 3910(a), 32 New Jersey Register 1024(a).
In (b), inserted "or quarterly" following "monthly" in 1, and rewrote 3 and 5.