Code of Maryland Regulations › Title 31 - MARYLAND INSURANCE ADMINISTRATION › Subtitle 09 - LIFE INSURANCE AND ANNUITIES › Chapter 31.09.02 - Variable Life Insurance › Section 31.09.02.07 - Information Furnished to Applicants

Current through Register Vol. 51, No. 14, July 12, 2024
A. An insurer delivering or issuing for delivery in this State a variable life insurance policy shall deliver to the applicant for the policy, and obtain a written acknowledgement of receipt from the applicant coincident with or before the execution of the application, the following information:
(1) A summary explanation, in nontechnical terms, of the principal features of the policy, including a description of the manner in which the variable benefits will reflect the investment experience of the separate account and the factors which affect the variation. This explanation shall include notices of the provisions required by Regulation .04D(1)(e) and D(6) of this chapter.
(2) A statement of the investment policy of the separate account, including:
(a) A description of the investment objective and orientation intended for the separate account and the principal types of investments intended to be made; and
(b) Any restriction or limitations on the manner in which the operations of the separate account are intended to be conducted.
(3) A statement of the net investment return of the separate account for each of the last 10 years for which the separate account was in existence.
(4) A statement describing, as an approximate percentage of an annual gross premium for each year and for the life of the policy, all commission or equivalent payments to be paid to all agents or other persons as a result of the proposed sale for each year of the policy for which payments are to be made. As used in this subsection, commissions means all monies and other valuable consideration, including but not limited to prizes, bonuses paid directly or indirectly to, for, or on behalf of the selling agent as compensation for services in the sale of variable life insurance.
(5) A statement of the annual taxes, brokerage fees, and similar costs, and the charges, expressed as an annual percentage, levied against the separate account during the previous year.
(6) A summary of the method to be used in valuing assets held by the separate account.
(7) A summary of the federal income tax liabilities of the policy applicable to the insured, the policy owner, and the beneficiary.
(8) If the applicant is furnished illustrations of benefits payable under a variable life insurance contract, these illustrations shall be prepared by the insurer and may not include projections of past investment experience into the future or attempted predictions of future investment experience, provided that nothing in this subsection prohibits the use of hypothetical assumed rates of return to illustrate possible levels of benefits if it is made clear that the assumed rates are hypothetical only.
(9) A prominent statement either in contrasting color or in boldface type at least four points larger than the type size of the largest type used in the text of any provision on the page, providing in substance the following information:
(a) The purpose of this variable life insurance policy is to provide insurance protection for the beneficiary named in the policy;
(b) A claim is not made that this variable life insurance policy is in any way similar or comparable to a systematic investment plan of mutual fund.