N.J. Admin. Code § 11:4-52.4

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

Section 11:4-52.4 - General rules and prohibitions

(a) An illustration used in the sale of a life insurance policy shall satisfy the applicable requirements of these rules, be clearly labeled "life insurance illustration" and contain the following basic information:

1. The name of the insurer;

2. The name and business address of the producer or insurer's authorized representative, if any;

3. The name, age and sex of the proposed insured, except where a composite illustration is permitted under these rules. In the case of a composite illustration, it shall be so identified;

4. The underwriting or rating classification upon which the illustration is based;

5. The generic name of the policy, the company product name, if different, and State specific form number;

6. The initial death benefit; and

7. The dividend option election or application of non-guaranteed elements, if applicable.

(b) When using an illustration in the sale of a life insurance policy, an insurer or its producers or other authorized representatives shall not:

1. Represent the policy as anything other than a life insurance policy;

2. Use or describe non-guaranteed elements in a manner that is misleading or has the capacity or tendency to mislead;

3. State or imply that the payment or amount of non-guaranteed elements is guaranteed;

4. Use an illustration that does not comply with the requirements of these rules;

5. Use an illustration that at any policy duration depicts policy performance more favorable to the policy owner than that produced by the illustrated scale of the insurer whose policy is being illustrated;

6. Use an illustration that includes any information that is unauthorized pursuant to law, outdated and/or invalid, no longer effective, or that fails to accurately reflect particulars concerning the applicant or policy being offered;

7. Provide an applicant with an incomplete illustration;

8. Represent in any way that premium payments will not be required for each year of the policy in order to maintain the illustrated death benefits, unless that is the fact;

9. Use the term "vanish" or "vanishing premium," or a similar term that implies the policy becomes paid up, to describe a plan for using non-guaranteed elements to pay a portion of future premiums;

10. Except for policies that can never develop nonforfeiture values, use an illustration that is "lapse-supported"; or

11. Use an illustration that is not "self-supporting."

(c) If an interest rate used to determine the illustrated non-guaranteed elements is shown, it shall not be greater than the earned interest rate underlying the disciplined current scale.

N.J. Admin. Code § 11:4-52.4