Code of Massachusetts Regulations › 211 CMR - DIVISION OF INSURANCE › Title 211 CMR 95.00 - Variable Life Insurance › Section 95.07 - Insurance Policy Requirements - Policy Benefit and Design

Current through Register 1525, July 5, 2024
Every variable life insurance policy delivered or issued for
				delivery in this state shall be subject to the following:
(1) The mortality and expense risks shall be
			 borne by the insurer. The mortality and expense charges shall be subject to the
			 maximums stated in the contract.
(2) A policy may provide for general account
			 preliminary term insurance. For any such policy, the premium rate for such
			 preliminary term insurance shall be stated separately in the application or
			 receipt.
(3) For scheduled premiums
			 policies, a minimum death benefit shall be provided in an amount at least equal
			 to the initial face amount of the policy so long as premiums are duly paid and
			 subject to all other policy provision requirements of
			 211 CMR
			 95.00. Other minimum death benefit patterns are
			 permitted so long as it is proved that they are actuarially equivalent to that
			 specified in the preceding sentence. Such demonstration shall be made in the
			 actuarial memorandum required in
			 211 CMR
			 95.06(2).
(4) The policy benefits shall reflect the
			 investment experience of one or more separate accounts established and
			 maintained by the insurer. The insurer shall demonstrate that the reflection of
			 investment experience in the variable insurance policy is actuarially
			 sound.
(5) Each variable life
			 insurance policy shall be credited with the full amount of the net investment
			 return applied to the benefit base.
(6) Notwithstanding the actual reserve basis
			 used for policies that do not meet standard underwriting requirements, the
			 benefit base for such policies may be the same as for corresponding policies
			 which do meet standard underwriting requirements.
(7) Any changes in variable death benefits of
			 each variable life insurance policy shall be determined at least
			 annually.
(8) The cash value and
			 cash surrender value of each variable life insurance policy shall be determined
			 at least monthly. A summary of the method of computation of cash values and
			 other nonforfeiture benefits shall be described in the policy; a complete
			 statement of the method of computation shall be filed with the Commissioner.
			 Such method shall be in accordance with the actuarial procedures that recognize
			 the variable nature of the policy. The method of computation must be such that,
			 if the net investment return credited to the policy at all times from the date
			 of issue should be equal to the assumed investment rate with premiums and
			 benefits determined accordingly under the terms of the policy, then the
			 resulting cash values and other nonforfeiture benefits must be at least equal
			 to the minimum values required by M.G.L. c. 175, § 144 for a general
			 account policy with such premiums and benefits. The assumed investment rate
			 shall not exceed the maximum interest rate permitted under M.G.L. c. 175,
			 § 144. If the policy does not contain an assumed investment rate, the
			 method of computation may be any other method approved by the Commissioner. The
			 method of computation may disregard incidental minimum guarantees as to the
			 dollar amounts payable. Incidental minimum guarantees include, but are not to
			 be limited to, a guarantee that the amount payable at death or maturity shall
			 be at least equal to the amount that otherwise would have been payable if the
			 net investment return credited to the policy at all times from the date of
			 issue had been equal to the assumed investment rate.
(9) The computation of values required for
			 each variable life insurance policy may be based upon such reasonable and
			 necessary approximations as are acceptable to the Commissioner.