Alaska Administrative Code › Title 3 - Commerce, Community, and Economic Development › Part 2 - Division of Insurance › Chapter 28 - Life, Health, Variable, and Related Insurance › Article 9 - Life Insurance Policy Illustrations › 3 AAC 28.820 - Standards for basic illustrations

Current through May 31, 2024
(a) Format. A basic
				  illustration must conform with the following requirements:
(1) the terms used in an illustration must be
				  consistent with the terms used in the policy that is being
				  illustrated;
(2) an illustration
				  must be labeled with the date on which it was prepared;
(3) each page, including any explanatory
				  notes or pages, must be numbered to show its relationship to the total number
				  of pages in the illustration (for example, 1 of 5 pages, 2 of 5 pages,
				  etc.);
(4) the assumed dates that
				  payment will be received and benefits will be paid within a policy year must be
				  clearly identified;
(5) if the age
				  of the proposed insured is shown as a component of the tabular detail required
				  under (e) of this section, it must be the issue age plus the number of years
				  the policy is assumed to have been in force;
(6) the assumed payments upon which the
				  illustrated benefits and values are based must be identified as contract
				  premium, if a specific contract premium is required; otherwise the assumed
				  payments must be identified as premium outlay;
(7) if guaranteed death benefits and values
				  are available upon surrender for the illustrated premium outlay or contract
				  premium, they must be shown and clearly identified as guaranteed;
(8) if an illustration shows a non-guaranteed
				  element, the non-guaranteed element may not be based on a scale more favorable
				  to the policy owner than the insurer's illustrated scale at any time during the
				  term of the policy, and the elements must be clearly identified as
				  non-guaranteed;
(9) guaranteed
				  elements, if any, must be shown before corresponding non-guaranteed elements
				  and must be referenced on any page of an illustration that shows or describes
				  only the non-guaranteed elements (for example, "see page one for guaranteed
				  elements");
(10) the account or
				  accumulation value of a policy, if shown, must be identified by the name the
				  value is given in the policy being illustrated and shown in close proximity to
				  the corresponding value available upon surrender;
(11) the value available upon surrender must
				  be identified by the name the value is given in the policy being illustrated
				  and must be the amount that will be available to the policy owner in a lump sum
				  after deduction of any surrender charges, policy loans, or policy loan
				  interest; if the policy does not specify a maximum policy loan interest rate,
				  the illustration must use the greater of the maximum rate permitted by AS 21 or
				  federal law to compute guaranteed values;
(12) an illustration may show policy benefits
				  and values in graphic or chart form in addition to tabular form;
(13) any illustration of non-guaranteed
				  elements must be accompanied by a statement disclosing that
(A) the benefits and values are not
				  guaranteed;
(B) the assumptions
				  upon which the benefits and values are based are subject to change by the
				  insurer; and
(C) actual results of
				  the benefits and values may be more or less favorable than the
				  illustration;
(14) if an
				  illustration shows that the premium payer may choose to pay policy charges
				  using non-guaranteed values,
(A) the
				  illustration must clearly disclose that a policy charge continues to be
				  required and, depending on actual results, the premium payer may need to
				  continue or resume premium outlays;
(B) a disclosure must be made for a premium
				  outlay of lesser amounts or shorter durations than the contract premium;
				  and
(C) if a contract premium is
				  due, the premium outlay display may not be left blank or show zero unless
				  accompanied by an asterisk or similar mark to draw attention to the fact that
				  the policy is not paid up; and
(15) if an applicant expresses an intent to
				  use dividends or policy values, whether guaranteed or non-guaranteed, to pay
				  any portion of the contract premium or policy charges, or for any other
				  purpose, the illustration may reflect the applicant's intent and the effect on
				  future policy benefits and values of using dividends or policy values as the
				  applicant intends.