Indiana Administrative Code › Title 760 - DEPARTMENT OF INSURANCE › Article 1 - GENERAL PROVISIONS › Rule 62 - Life Insurance Illustrations › Section 62-5 - Basic illustrations

Current through July 10, 2024
Authority: IC
				  27-1-3-7
Affected: IC
				  27-1-12-25;
				  IC
				  27-4-1-4
Sec. 5.
(a) 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, for example, the fourth page of a seven (7) 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 nonguaranteed 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 nonguaranteed.
(8) The guaranteed elements, if any, shall be
				shown before corresponding nonguaranteed elements and shall be specifically
				referred to on any page of an illustration that shows or describes only the
				nonguaranteed elements, for example, "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 nonguaranteed elements shall be accompanied by a statement indicating the
				following:
(A) The benefits and values are not
				guaranteed.
(B) The assumptions on
				which they are based are subject to change by the insurer.
(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 nonguaranteed 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 (0) 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
				nonguaranteed, 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.