N.Y. Comp. Codes R. & Regs. tit. 11 § 54.11

Current through Register Vol. 46, No. 43, October 23, 2024

Section 54.11 - Reports to policyholders

Any insurer delivering or issuing for delivery in this State any variable life insurance policies shall mail to each variable life insurance policyholder, at his or her last known address, the following reports:

(a) Within 60 days after each anniversary of the policy, a statement or statements of the cash surrender value, policy value, death benefit, any partial withdrawal or policy loan, any interest charge, and any optional payments allowed pursuant to section 54.6(b)(10) of this Part under the policy, computed as of the policy anniversary date; provided, however, that such statement may be furnished within 30 days after a specified date in each policy year so long as the information contained therein is computed as of a date not more than 60 days prior to the mailing of such notice. This statement shall state that, in accordance with the investment experience of the separate account, the policy values and the variable death benefit may increase or decrease, and shall prominently identify any value described therein which may be recomputed prior to the next statement required by this subdivision. If the policy guarantees that the variable death benefit on the next policy anniversary date will not be less than the variable death benefit specified in such statement, the statement shall be modified to so indicate. For flexible premium policies, the report must contain a reconciliation of the change since the previous report in policy value and cash surrender value, if different, because of payments made (less deductions for expense charges), withdrawals, investment experience, insurance charges and any other charges made against the policy value. If, based upon the billed or other appropriate identified premium, an assumed net investment return of not greater than eight percent per annum, and current mortality charge and expense, the policy value would become exhausted at any duration within the 10 years following the report date, the report shall state such duration and note the assumptions as to premium and other factors upon which it is based, together with a notice that coverage might then terminate, subject to the policy grace period provision, unless additional premiums are paid. The report shall contain the notice specified in section 54.10(d) of this Part.

(b) Annually, a statement or statements, including:

(1) A summary of the balance sheet and summary of operations of the separate account, including a calculation of the net investment return, based on the annual statement last filed with the superintendent.

(2) The net investment return of the separate account for the last year and, for each year after the first, a comparison of the investment rate of the separate account during the last year with the investment rate during prior years, up to a total of not less than five years when available.

(3) A list of investments held by the separate account as of a date not earlier than the end of the last year for which an annual statement was filed with the superintendent.

(4) Any charges levied against the separate account during the previous year expressed as a dollar amount and a percentage, and the total expressed as a dollar amount and as a percentage, of the assets of the separate account.

(5) A statement of the portfolio turnover rate as defined in this paragraph during the preceding fiscal year of investments allocated to the separate account:

(i) The rate shall be calculated by dividing (a) the lesser of purchases or sales of porfolio securities for the particular fiscal year by (b) the monthly average of the value of the portfolio securities owned by the separate account during the particular fiscal year. Such monthly average shall be calculated by totaling the values of the portfolio securities as of the beginning and end of the first month of the particular fiscal year and as of the end of each of the succeeding 11 months, and dividing the sum by 13, except that the average value of securities for which market quotations are not available may be based upon the value of such securities as of the end of the preceding fiscal quarters.

(ii) For the purposes of this item, there shall be excluded from both the numerator and the denominator all United States government securities (short-term and long-term) and all other securities whose maturities at the time of acquisition were one year or less. Purchases shall also include any cash paid upon the conversion of one portfolio security into another. Purchases shall also include the cost of rights or warrants purchased. Sales shall include the net proceeds of the sale of rights or warrants. Sales shall also include the net proceeds of redemption of portfolio securities by call or maturity.

(iii) The insurer shall show, in addition to the calculated portfolio turnover rate, both the amount of the purchases and the amount of the sales (calculated as prescribed in subparagraph [ii[ of this paragraph) and the monthly average (but not the individual monthy figures) of the value of the portfolio securities owned by the separate account during the fiscal year.

(iv) The insurer may, if it wishes, make any statement or explanation with respect to any significant variations in the portfolio turnover rate during the three fiscal years next preceding.

(6) A statement of any change, since the last report, in the investment objective and orientation of the separate account, in any investment restriction or material quantitative or qualitative investment requirement applicable to the separate account, or in the investment adviser of the separate account.

(7) The name of each broker or dealer handling portfolio transactions on behalf of the separate account in which the insurer or an affiliate has any material direct or indirect interest and the nature of such transactions and the amount of compensation received by each such broker or dealer from business originating with the separate account during the preceding fiscal year.

(c) For flexible premium policies, a report must be sent to the policyholder if, unless otherwise provided in the policy, the net cash surrender value under the policy on any policy processing day to pay the charges authorized by the policy is less than the amount necessary to keep the policy in force until the next following policy processing day. The report shall be mailed no earlier than, and within 30 days after, the policy processing day on which the insurer determined that an insufficiency had occurred, and must indicate the minimum payment required under the terms of the policy to keep it in force and the length of the grace period for payment of such amount.

(d) Such additional information concerning the variable life insurance operations or the variable life insurance separate accounts as the superintendent shall deem appropriate.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 54.11