Kentucky Administrative Regulations › Title 806 - PUBLIC PROTECTION CABINET - DEPARTMENT OF INSURANCE › Chapter 15 - Life Insurance and Annuity Contracts › Section 806 KAR 15:030 - Variable life insurance

Current through Register Vol. 51, No. 1, July 1, 2024
RELATES TO:
				KRS
				304.2-100,
				304.7-240,
				304.12-020,
				304.12-030,
				304.14-120,
				304.15-115,
				304.15-130,
				304.15-390
NECESSITY, FUNCTION, AND CONFORMITY:
				KRS
				304.2-110 provides that the Commissioner of
				Insurance may make reasonable administrative regulations necessary for or as an
				aid to the effectuation of any provision of the Kentucky Insurance Code.
				KRS
				304.15-390 authorizes the Commissioner of
				Insurance to make administrative regulations controlling the sale and issuance
				of variable contracts. This administrative regulation establishes guidelines
				for the sale and issuance of variable life insurance.
Section 1. Definitions. As used in this
			 administrative regulation:
(1) "Affiliate" of
			 an insurer means any person, directly or indirectly, controlling, controlled
			 by, or under common control with such insurer; any person who regularly
			 furnishes investment advice to such insurer with respect to its separate
			 accounts for which a specific fee or commission is charged; or any director,
			 officer, partner, or employee of such insurer, controlling or controlled
			 person, or person providing investment advice or any member of the immediate
			 family of such person.
(2) "Agent"
			 means any person, corporation, partnership, or other legal entity which is
			 licensed by this state as a life insurance agent.
(3) "Assumed investment rate" means the rate
			 of investment return which would be required to be credited to a variable life
			 insurance policy, after deduction of charges for taxes, investment expenses,
			 and mortality and expense guarantees to maintain the variable death benefit
			 equal at all times to the amount of death benefit, other than incidental
			 insurance benefits, which would be payable under the plan of insurance if the
			 death benefit did not vary according to the investment experience of the
			 separate account.
(4) "Benefit
			 base" means the amount to which the net investment return is applied.
(5) "Commissioner" is defined in
			 KRS
			 304.1-050(1).
(6) "Control" (including the terms
			 "controlling," "controlled by" and "under common control with") means the
			 possession, direct or indirect, or the power to direct or cause the direction
			 of the management and policies of a person, whether through the ownership of
			 voting securities, by contract other than a commercial contract for goods or
			 nonmanagement services, or otherwise, unless the power is the result of an
			 official position with or corporate office held by the person. Control shall be
			 presumed to exist if any person, directly or indirectly, owns, controls, holds
			 with the power to vote, or holds proxies representing more than ten (10)
			 percent of the voting securities of any other person. This presumption may be
			 rebutted by a showing made to the satisfaction of the commissioner that control
			 does not exist in fact. The commissioner may determine, after furnishing all
			 persons in interest notice and opportunity to be heard and making specific
			 findings of fact to support such determination, that control exists in fact,
			 notwithstanding the absence of a presumption to that effect.
(7) "Flexible premium policy" means any
			 variable life insurance policy other than a scheduled premium policy as
			 specified in subsection (15) of this section.
(8) "General account" means all assets of the
			 insurer other than assets in separate accounts established pursuant to
			 KRS
			 304.15-390 or pursuant to the corresponding
			 section of the insurance laws of the state of domicile of a foreign or alien
			 insurer, whether or not for variable life insurance.
(9) "Incidental insurance benefit" means all
			 insurance benefits in a variable life insurance policy, other than the variable
			 death benefit and the minimum death benefit, including but not limited to
			 accidental death and dismemberment benefits, disability benefits, guaranteed
			 insurability options, family income, or term riders.
(10) "May" is permissive.
(11) "Minimum death benefit" means the amount
			 of the guaranteed death benefit, other than incidental insurance benefits,
			 payable under a variable life insurance policy regardless of the investment
			 performance of the separate account.
(12) "Net investment return" means the rate
			 of investment return in a separate account to be applied to the benefit
			 base.
(13) "Person" has the meaning
			 specified in
			 KRS
			 304.1-020, and also includes a
			 fund.
(14) "Policy processing day"
			 means the day on which charges authorized in the policy are deducted from the
			 policy's cash value.
(15)
			 "Scheduled premium policy" means any variable life insurance policy under which
			 both the amount and timing of premium payments are fixed by the
			 insurer.
(16) "Separate account"
			 means a separate account established pursuant to
			 KRS
			 304.15-390 or pursuant to the corresponding
			 section of the insurance laws of the state of domicile of a foreign or alien
			 insurer.
(17) "Shall" is
			 mandatory.
(18) "Variable death
			 benefit" means the amount of the death benefit, other than incidental insurance
			 benefits, payable under a variable life insurance policy dependent on the
			 investment performance of the separate account, which the insurer would have to
			 pay in the absence of any minimum death benefit.
(19) "Variable life insurance policy" means
			 any individual policy which provides for life insurance the amount or duration
			 of which varies according to the investment experience of any separate account
			 or accounts established and maintained by the insurer as to such policy,
			 pursuant to
			 KRS
			 304.15-390 or pursuant to the corresponding
			 section of the insurance laws of the state of domicile of a foreign or alien
			 insurer.