Illinois Administrative Code › Title 50 - INSURANCE › Part 1406 - INDIVIDUAL AND GROUP LIFE INSURANCE POLICY ILLUSTRATIONS › Section 1406.30 - Definitions

Current through Register Vol. 48, No. 28, July 12, 2024
"Actuarial Standards Board" or "ASB" means the board
				established by the American Academy of Actuaries to develop and promulgate
				standards of actuarial practice.
"Contract Premium" means the gross premium that is required to
				be paid under a fixed premium policy, including the premium for a rider for
				which benefits are shown in the illustration.
"Currently Payable Scale" means a scale of non-guaranteed
				elements in effect for a policy form as of the preparation date of the
				illustration, or declared to become effective within the next 95 days after the
				preparation date.
"Director" means the Director of the Illinois Department of
				Insurance.
"Disciplined Current Scale" means a scale of non-guaranteed
				elements constituting a limit on illustrations currently being illustrated by
				an insurer that is reasonably based on actual recent historical experience, as
				certified annually by an illustration actuary designated by the insurer.
"Generic Name" means a short title descriptive of the policy
				being illustrated, such as "Whole Life", "Term Life" or "Flexible Premium
				Adjustable Life".
"Guaranteed Elements" and "Non-guaranteed Elements"
				mean:
"Guaranteed Elements" means the premiums, benefits, values,
				credits or charges under a policy of individual or group life insurance that
				are guaranteed and determined at the time of issuance.
"Non-guaranteed Elements" means the premiums, benefits, values,
				credits or charges under a policy of individual or group life insurance that
				are not guaranteed or not determined at the time of issuance.
"Illustrated Scale" means a scale of non-guaranteed elements
				currently being illustrated that is not more favorable to the policy owner than
				the lesser of:
The disciplined current scale; or
The currently payable scale.
"Illustration" means a presentation or depiction that includes
				non-guaranteed elements of a policy of individual or group life insurance over
				a period of years and that is one of the 3 types defined below:
"Basic Illustration" means a ledger or proposal used in the
				sale of an individual or group life insurance policy that shows both guaranteed
				and non-guaranteed elements.
"Supplemental Illustration" means an illustration furnished in
				addition to a basic illustration that meets the applicable requirements of this
				Part, and that may be presented in a format differing from the basic
				illustration, but may only depict a scale of non-guaranteed elements that is
				permitted in a basic illustration.
"In Force Illustration" means an illustration furnished at any
				time after the policy that it depicts has been in force for one year or
				more.
"Illustration Actuary" means an actuary meeting the
				requirements of Section
				1406.100
				who certifies that illustrations are based on the standard of practice
				promulgated by the Actuarial Standards Board.
"Lapse-supported Illustration" means an illustration of a
				policy form for individual or group life insurance failing the test of
				self-supporting as defined in this Section, under a modified persistency rate
				assumption using persistency rates underlying the disciplined current scale for
				the first 5 years and 100% policy persistency thereafter.
"Minimum Assumed Expenses" means the minimum expenses that may
				be used in the calculation of the disciplined current scale for a policy
				form.
The insurer may choose to designate each year the method of
				determining assumed expenses for all policy forms from the following:
Fully allocated expenses;
Marginal expenses; and
A generally recognized expense table based on fully allocated
				expenses representing a significant portion of insurance companies and approved
				by the National Association of Insurance Commissioners (NAIC) or by the
				Director.
Marginal expenses may be used only if greater than a generally
				recognized expense table. If no generally recognized expense table is approved,
				fully allocated expenses must be used.
"Non-term Group Life" means a group policy or individual
				policies of life insurance issued to members of a group when:
Every plan of coverage was selected by the employer or other
				group representative;
Some portion of the premium is paid by the group or through
				payroll deduction; and
Group underwriting or simplified underwriting is used.
"Policyowner" means the owner named in the policy or the
				certificateholder in the case of a group policy.
"Premium Outlay" means the amount of premium assumed to be paid
				by the policyowner or other premium payer out-of-pocket.
"Self-supporting Illustration" means an illustration of a
				policy form, either individual or group, for which it can be demonstrated that,
				when using experience assumptions underlying the disciplined current scale, for
				all illustrated points in time on or after the fifteenth policy anniversary or
				the twentieth policy anniversary for last survivor policies (or upon policy
				expiration if sooner), the accumulated value of all policy cash flows equals or
				exceeds the total policyowner value available. For this purpose, policyowner
				value will include cash surrender values and any other illustrated benefit
				amounts available at the policyowner's election.