S.D. Admin. R. 20:06:08:38

Current through Register Vol. 50, page 159, June 17, 2024

Section 20:06:08:38 - Definitions

Terms used in this chapter mean:

(1) "2001 CSO Mortality Table," that mortality table, consisting of separate rates of mortality for male and female lives, developed by the American Academy of Actuaries CSO Task Force from the Valuation Basic Mortality Table developed by the Society of Actuaries Individual Life Insurance Valuation Mortality Task Force, and adopted by the NAIC in December 2002. Unless the context indicates otherwise, the 2001 CSO Mortality Table includes both the ultimate form of that table and the select and ultimate form of that table and includes both the smoker and nonsmoker mortality tables and the composite mortality tables. It also includes both the age-nearest-birthday and age-last-birthday bases of the mortality tables;

(2) "2001 CSO Mortality Table (F)," that mortality table consisting of the rates of mortality for female lives from the 2001 CSO Mortality Table;

(3) "2001 CSO Mortality Table (M)," that mortality table consisting of the rates of mortality for male lives from the 2001 CSO Mortality Table;

(4) "Composite mortality tables," mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers;

(5) "Direct-response solicitation," a solicitation through a sponsoring or endorsing entity or individually sold solely through mail, telephone, the Internet, or other mass communication media;

(6) "Existing insurer," the insurance company whose policy or contract is or will be changed or affected in a manner described within the definition of "replacement";

(7) "Existing policy or contract," an individual life insurance policy (policy) or annuity contract (contract) in force, including a policy under a binding or conditional receipt or a policy or contract that is within an unconditional refund period;

(8) "Financed purchase," the purchase of a new policy involving the actual or intended use of funds obtained by the withdrawal, surrender, or borrowing from values of an existing policy to pay all of part of any premium due on the new policy;

(9) "Illustration," a presentation or depiction that includes non-guaranteed elements of a policy of life insurance over a period of years as defined in chapter 20:06:38;

(10) "Policy summary," for purposes of §§ 20:06:08:49 to 20:06:08:65, inclusive;

(a) For policies or contracts other than universal life policies, a written statement regarding a policy or contract which shall contain to the extent applicable, but need not be limited to, the following information: current death benefit; annual contract premium; current cash surrender value; current dividend; application of current dividend; and amount of outstanding loan;

(b) For universal life policies, a written statement that shall contain at least the following information: the beginning and end date of the current report period; the policy value at the end of the previous report period and at the end of the current report period; the total amounts that have been credited or debited to the policy value during the current report period, identifying each by type (e.g., interest, mortality, expense and riders); the current death benefit at the end of the current report period on each life covered by the policy; the net cash surrender value of the policy as of the end of the current report period; and the amount of outstanding loans, if any, as of the end of the current report period;

(11) "Producer," for the purpose of §§ 20:06:08:49 to 20:06:08:65, inclusive, includes agents, brokers and producers;

(12) "Registered contract," a variable annuity contract or variable life insurance policy subject to the prospectus delivery requirements of the Securities Act of 1933;

(13) "Replacement," a transaction in which a new policy or contract is to be purchased, and it is known or should be known to the proposing producer, or to the proposing insurer if there is no producer, that by reason of the transaction, an existing policy or contract has been or is to be:

(a) Lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer or otherwise terminated;

(b) Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values;

(c) Amended so as to effect either a reduction in benefits in the term for which coverage would otherwise remain in force or for which benefits would be paid;

(d) Reissued with a reduction in cash value; or

(e) Used in a financed purchase;

(14) "Replacement notice," the form used by a replacing insurer to notify an existing insurer of the replacement of existing insurance;

(15) "Replacing insurer," the insurance company that issues or proposes to issue a new policy or contract that replaces an existing policy or contract or is a financed purchase;

(16) " Sales material," a sales illustration and any other written, printed, or electronically presented information created, completed, or provided by the company or producer and used in the presentation to the policy or contract owner related to the policy or contract purchased;

(17) "Smoker and nonsmoker mortality tables," mortality tables with separate rates of mortality for smokers and nonsmokers;

S.D. Admin. R. 20:06:08:38

15 SDR 143, effective 3/29/1989; 30 SDR 189, effective 6/7/2004; 39 SDR 55, effective 10/4/2012; 39 SDR 219, effective 6/26/2013.

General Authority: SDCL 58-26-57, 58-33A-7(20).

Law Implemented: SDCL 58-26-57, 58-33-5, 58-33-6, 58-33-8.

2001 Commissioners Standard Ordinary (CSO) Mortality Table, may be obtained free of charge from the Proceedings of the NAIC 2nd Quarter 2002 from the National Association of Insurance Commissioners, Publications Department, Telephone 816-783-8300, Fax 816-460-7593, or by email to prodserv@naic.org. Cost: Free to members; $180 for nonmembers.