Current through Register Vol. 54, No. 44, November 2, 2024
Section 89.42 - Nonforfeiture value requirements(a)General. The nonforfeiture values (for the age for which the form is filled in for a typical plan of insurance) to be issued under a particular policy form should be included. The Department has approved reference to the Commissioners' Standard Non-Forfeiture Value Method in lieu of explanation of the method of calculating cash values under the Standard Non-Forfeiture Law, section 410A of the act (40 P.S. § 510.1), and insurers using the method may refer thereto in the forms submitted. If no nonforfeiture values develop, the submission letter should so state.(b)Recommended statement in policy. It is suggested that a provision be included in the policy substantially similar to the following: The cash values and nonforfeiture benefits available under this policy are equal to or greater than the minimum required by statute of the state in which this policy is delivered.
(c)Automatic premium loan. An automatic premium loan provision should be separately captioned and not included under or with the nonforfeiture provisions.(d)Substandard plans. Substandard plans in which the extended insurance option is not available shall indicate by the proper text in the policy and endorsements that such option and values are not applicable. Tables which contain headings and spaces for the insertion of extended insurance values shall be printed, overprinted or stamped in a prominent manner to indicate that, in cases in which the values are not granted, the values are not applicable.(e)Nonforfeiture benefit limitations. Nonforfeiture benefit limitations shall conform with the following:(1) Insurers may offer extended term insurance or paid-up insurance as a nonforfeiture benefit. These benefits need not include supplementary built-in insurance benefits provided for while the policy is in force, nor need they include benefits provided by riders attached thereto.(2) Where the nonforfeiture benefits of a policy do not apply to supplementary benefits which are built into the policy or attached by riders, the policyholder shall be so notified. Notification shall be in the following or comparable form: Any insurance continued under these nonforfeiture provisions shall not include benefits which supplement the basic life insurance benefit, whether these supplemental benefits are mentioned in the policy itself or provided by a rider attached to the policy, unless specifically provided otherwise where the supplemental benefit is described.
(3) The provision set forth in paragraph (2) should be included in the first section of the policy which describes nonforfeiture values.(i) If the provision is located elsewhere in the policy, it shall be in a place where it is equally or more visible.(ii) Where supplemental benefits are described in a rider to the policy and not in the policy itself, notification of nonapplicability of the benefits as a nonforfeiture value may be made in the rider describing the benefit. The notice shall be prominently located.(iii) Policy and rider forms will be disapproved which do not include the provision in a location acceptable to the Department.(4) The provision set forth in paragraph (2) shall be required in life insurance policies or riders issued 90 days after the effective date of this subsection. Compliance may be made by endorsement to policies or riders issued 90 days after the effective date but before January 1, 1976. After January 1, 1976, life insurance forms shall incorporate the provision into the policy or rider itself.The provisions of this §89.42 amended October 11, 1974, effective 10/12/1974, 4 Pa.B. 2173. This section cited in 31 Pa. Code § 90d.5 (relating to termination of coverage); 31 Pa. Code § 90f.8 (relating to termination of coverage); 31 Pa. Code § 90g.8 (relating to termination of coverage); and 31 Pa. Code § 90h.6 (relating to termination of coverage).