Oklahoma Administrative Code › Title 365 - Insurance Department › Chapter 10 - Life, Accident and Health › Subchapter 3 - Advertising › Part 5 - LIFE INSURANCE ILLUSTRATIONS REGULATION › Section 365:10-3-52 - Definitions

Current through Vol. 41, No. 20, July 1, 2024
The following words or terms, when used in this Part, shall
					 have the following meaning, unless the context clearly indicates
					 otherwise:
"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 ninety-five
					 (95) days.
"Disciplined current scale"
means a scale of
					 non-guaranteed elements constituting a limit on illustrations currently being
					 illustrated by an insurer that is reasonably based on actual recent historical
					 experience, as certified annually by an illustration actuary designated by the
					 insurer. Further guidance in determining the disciplined current scale as
					 contained in standards established by the Actuarial Standard Board may be
					 relied upon if the standards:
(A) Are consistent with all provisions of this
					 regulation;
(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." The terms
"Guaranteed elements"
and
"non-guaranteed elements"
are defined as follows:
(A)
"Guaranteed elements"
means the premiums,
					 benefits, values, credits or charges under a policy of life insurance that are
					 guaranteed and determined at issue.
(B)
"Non-guaranteed elements"
means the
					 premiums, benefits, values, credits or charges under a policy of life insurance
					 that are not guaranteed or not 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
					 depiction that includes non-guaranteed elements of a policy of life insurance
					 over a period of years and that is one of the three (3) types defined
					 below:
(A)
"Basic illustration"
means a ledger of
					 proposal used in the sale of a life insurance policy that shows both guaranteed
					 and non-guaranteed elements.
(B)
"Supplemental illustration"
means an
					 illustration furnished in addition to a basic illustration that meets the
					 applicable requirements of this regulation, 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"
means an
					 illustration furnished at any time after the policy that 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
					 illustration of policy form failing the test of self-supporting as defined in
					 this regulation, under a modified persistency rate assumption using persistency
					 rate underlying the disciplined current scale for the first five (5) years and
					 100 percent policy persistency thereafter.
"Minimum assumed expenses"
means the minimum
					 expenses that may be used in the calculation of the disciplined current scale
					 for a policy form.
(A) The insurer may choose to designate each year the
					 method of determining assumed expenses for all policy forms from the
					 following:
(i) Fully allocated expenses;
(ii) Marginal expenses: and
(iii) A generally recognized expense table based on fully
					 allocated expenses representing a significant portion of insurance companies
					 and approved by the (National Association of Insurance Commissioners or by the
					 commissioner).
(B) 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.
"Non-term group life"
means a group policy or
					 individual policies of life insurance issued to members of an employer group of
					 other permitted group where:
(A) Every plan of coverage was selected by the employer of
					 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 fifteenth policy anniversary or the
					 twentieth policy anniversary for second-or-later-to-die policies (or upon
					 policy expiration if sooner), the accumulated value of all policy cash flows
					 equals or exceeds the total policy owner value available. For this purpose,
					 policy owner value will include cash surrender values and any other illustrated
					 benefit amounts available at the policy owner's election.
Added at 14 Ok Reg
					 2644, eff 7-1-97