Alabama Administrative Code › Title 482 - ALABAMA DEPARTMENT OF INSURANCE › Chapter 482-1-114 - LIFE INSURANCE ILLUSTRATIONS › Section 482-1-114-.07 - Standards For Basic Illustrations

Current through Register Vol. 42, No. 9, June 28, 2024
A. Format. A basic illustration shall conform
			 with the following requirements:
(1) The
			 illustration shall be labeled with the date on which it was prepared.
(2) Each page, including any explanatory
			 notes or pages, shall be numbered and show its relationship to the total number
			 of pages in the illustration (
e.g.,
the fourth page of a
			 seven-page illustration shall be labeled "page 4 of 7 pages").
(3) The assumed dates of payment receipt and
			 benefit pay-out within a policy year shall be clearly identified.
(4) If the age of the proposed insured is
			 shown as a component of the tabular detail, it shall be issue age plus the
			 numbers of years the policy is assumed to have been in force.
(5) The assumed payments on which the
			 illustrated benefits and values are based shall be identified as premium outlay
			 or contract premium, as applicable. For policies that do not require a specific
			 contract premium, the illustrated payments shall be identified as premium
			 outlay.
(6) Guaranteed death
			 benefits and values available upon surrender, if any, for the illustrated
			 premium outlay or contract premium shall be shown and clearly labeled
			 guaranteed.
(7) If the illustration
			 shows any non-guaranteed elements, they cannot be based on a scale more
			 favorable to the policy owner than the insurer's illustrated scale at any
			 duration. These elements shall be clearly labeled non-guaranteed.
(8) The guaranteed elements, if any, shall be
			 shown before corresponding non-guaranteed elements and shall be specifically
			 referred to on any page of an illustration that shows or describes only the
			 non-guaranteed elements (
e.g
., "see page one for guaranteed
			 elements.")
(9) The account or
			 accumulation value of a policy, if shown, shall be identified by the name this
			 value is given in the policy being illustrated and shown in close proximity to
			 the corresponding value available upon surrender.
(10) The value available upon surrender shall
			 be identified by the name this value is given in the policy being illustrated
			 and shall be the amount available to the policy owner in a lump sum after
			 deduction of surrender charges, policy loans and policy loan interest, as
			 applicable.
(11) Illustrations may
			 show policy benefits and values in graphic or chart form in addition to the
			 tabular form.
(12) Any illustration
			 of non-guaranteed elements shall be accompanied by a statement indicating that:
(a) The benefits and values are not
			 guaranteed;
(b) The assumptions on
			 which they are based are subject to change by the insurer; and
(c) Actual results may be more or less
			 favorable.
(13) If the
			 illustration shows that the premium payer may have the option to allow policy
			 charges to be paid using non-guaranteed values, the illustration must clearly
			 disclose that a charge continues to be required and that, depending on actual
			 results, the premium payer may need to continue or resume premium outlays.
			 Similar disclosure shall be made for premium outlay of lesser amounts or
			 shorter durations than the contract premium. If a contract premium is due, the
			 premium outlay display shall 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.
(14) If the applicant
			 plans to use dividends or policy values, guaranteed or non-guaranteed, to pay
			 all or a portion of the contract premium or policy charges, or for any other
			 purpose, the illustration may reflect those plans and the impact on future
			 policy benefits and values.