Code of Massachusetts Regulations › 211 CMR - DIVISION OF INSURANCE › Title 211 CMR 28.00 - Life Insurance Illustrations › Section 28.04 - Definitions

Current through Register 1525, July 5, 2024
For the purposes of
				211
				CMR 28.00:
Actuarial Standards Board
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.
Disciplined Current Scale
means a
				scale of non-guaranteed elements constituting a limit on illustrations
				currentlybeingillustrated byan insurer that is reasonably based on actualrecent
				historicalexperience, as certified annually by an illustration actuary
				designated by theinsurer. Further guidance in determining the disciplined
				current scale as contained in standards established by the Actuarial Standards
				Board may be relied upon if the standards:
(a) Are consistent with all provisions of
				211
				CMR 28.00;
(b) Limit a disciplined current scale to reflect only actions
				that have already been taken or events that have already occurred;
(c) Do not permit a disciplined current scale to include any
				projected trends of improvements in experience or any assumed improvements in
				experience beyond the illustration date; and
(d) Do not permit assumed expenses to be less than minimum
				assumed expenses.
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
means the
				premiums, benefits, values, credits or charges under a policy of life insurance
				that are guaranteed and determined at issue.
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:
(a) The disciplined current scale; or
(b) The currently payable scale.
Illustration
means a presentation or
				depictionthat includes non-guaranteed elements of a policy of life insurance
				over a period of years and that is one of the three types defined in 211 CMR
				28.04:
Illustration
(a) through (c):
(a) Basic illustration: a ledger or proposal used in the sale
				of a life insurance policy that shows both guaranteed and non-guaranteed
				elements.
(b) Supplemental illustration: an illustration furnished in
				addition to a basic illustration that meets the applicable requirements of
				211
				CMR 28.00, 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.
(c) In force illustration: an illustration furnished at anytime
				after the policythat it depicts has been in force for one year or more.
Illustration Actuary
means an actuary
				meeting the requirements of Section 11 who certifies to illustrations based on
				the standard of practice promulgated by the Actuarial Standards Board.
Lapse-supported Illustration
means an
				illustrationofa policyform failing the test of self-supporting as defined in
				211
				CMR 28.00, under a modified persistency rate
				assumption using persistency rates underlying the disciplined current scale for
				the first five years and 100% policy persistency thereafter.
MinimumAssumed Expenses
means the
				minimum expenses that may be used in the calculation of the disciplined current
				scale for a policyform. The insurer may choose to designate each year the
				method of determining assumed expenses for all policy forms from the
				following:
(a) Fully allocated expenses;
(b) Marginal expenses; and
(c) A generally recognized expense table based on fully
				allocated expenses representing a significant portion of insurance companies
				and approved by the commissioner.
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.
Nonguaranteed Elements
means the
				benefits, values, credits or charges under a policy of life insurance that are
				not guaranteed or not determined at issue.
Non-term Group Life
means a group
				policy or individual policies of life insurance issued to members of an
				employer group or other permitted group where:
(a) Every plan of coverage was selected by the employer or
				other group representative;
(b) Some portion of the premium is paid by the group or through
				payroll deduction; and
(c) Group underwriting or simplified underwriting is
				used.
Policy Owner
means the owner named in
				the policy or the certificate holder in the case of a group policy.
Premium Outlay
means the amount of
				premium assumed to be paid by the policy owner or other premium payer
				out-of-pocket.
Self-supporting Illustration
means an
				illustration of a policy form 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 15th
				policy anniversary or the 20th policy anniversary
				for second-or-later-to-die policies (or upon policy expiration if sooner), the
				accumulated value ofallpolicy cash flows equals or exceeds the total policy
				owner value available. For this purpose, policyowner value willinclude cash
				surrender values and any other illustrated benefit amounts available at the
				policy owner's election.