Michigan Administrative Code › Department - Insurance and Financial Services › Insurance › Life Insurance Contracts On Variable Basis › Section R. 500.859 - Separate accounts; material change in investment policy

Current through Vol. 24-12, July 15, 2024
Rule 19.
(1) The
				investment policies of a separate account for variable life insurance operated
				by insurers authorized under
				R 500.843 shall not be changed
				without first filing such change with the insurance commissioner.
(2) A material change in the investment
				policy of a separate account operated by a domestic insurer or an alien insurer
				entering the United States through this state and filed under
				R 500.843(c)(iii)
				shall not be made without first filing such change with the commissioner not
				less than 60 days before the effective date of the change.
(3) A material change in the investment
				policy of a separate account operated by a foreign insurer or an alien insurer
				not entering the United States through this state, pursuant to the section of
				the insurance law of the insurer's state of domicile which corresponds to
				R 500.843(c)(iii),
				shall not be made without first filing such change with the commissioner not
				less than 60 days before the effective date of the change.
(4) Any change filed pursuant to this rule
				shall be effective 60 days after the date it was filed with the commissioner,
				unless the commissioner notifies the insurer before the end of such 60-day
				period of his or her disapproval of the proposed change. At any time the
				commissioner may, after notice and public hearing, disapprove any change that
				has become effective pursuant to this rule if he or she determines that the
				change would be detrimental to the interests of the policyholders participating
				in such separate accounts.
(5) If
				any policyholder objects to a proposed material change in the investment policy
				of a separate account and the change becomes effective, the objecting
				policyholder shall be given the option of converting, within 60 days after the
				effective date of the change or the receipt of a notice of the options
				available, whichever is later, without evidence of insurability, under 1 of the
				following options, to a fixed benefit life insurance policy issued by the
				insurer or an affiliate:
(a) If the policy is
				a scheduled premium policy, as defined by
				R
				500.841 and is in force on a premium paying basis, an
				insurer shall offer either or both of the following options:
(i) A conversion as of the original issue age
				to a substantially comparable form of general account life insurance, based on
				the insurer's premium rates for a general account life insurance policy at the
				original issue age, for an amount of insurance not exceeding the death benefit
				of the variable life insurance policy on the date of conversion. If the cash
				value of the variable life insurance policy exceeds the cash value of the
				general account life insurance policy, the difference shall be paid to the
				policyholder. If the cash value of the general account life insurance policy
				exceeds the cash value of the variable life insurance policy, the difference
				shall be paid by the policyholder.
(ii) Conversion as of the attained age to a
				substantially comparable form of general account life insurance for an amount
				of insurance not exceeding the excess of the death benefit of the variable life
				insurance policy on the date of conversion over either of the following:
(A) Its net cash surrender value on the date
				of conversion if the withdrawing policyholder elects to surrender the variable
				life policy for its net cash surrender value.
(B) The death benefit payable under any
				paid-up insurance option if the withdrawing policyholder elects such
				nonforfeiture option under the variable life policy.