New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter III - Policy and Certificate Provisions › Subchapter A - Life, Accident and Health Insurance › Part 43 - Individual Life Insurance Market-value Adjustment › Section 43.2 - Definitions

Current through Register Vol. 46, No. 28, July 10, 2024
As used in this Part, the following terms have the
					 following meanings:
(a) Benefit
				  charges means mortality charges made for life insurance on the insured person
				  or persons and any charges made for riders or supplementary benefits.
(b) Cash surrender benefits means the amount
				  payable on surrender of a policy.
(c) Cash surrender value means an amount
				  equal to the policy value (including the value of the loan account), less any
				  surrender charge, before reduction for indebtedness. Unadjusted cash surrender
				  value means the cash surrender value before application of the market-value
				  adjustment formula, and market-value adjusted cash surrender value means the
				  cash surrender value after the application of such formula.
(d) Company means an insurer authorized to do
				  life insurance business in this State and includes fraternal benefit societies
				  but only to the extent that the Insurance Law authorizes such societies to
				  conduct the life insurance business.
(e) Expense charges means charges (other than
				  service charges) deducted from gross premiums before premiums are credited to
				  the policy value or otherwise deducted from the policy value.
(f) Fair value means, with respect to an
				  asset that is not a publicly traded security, a reasonable estimate of what a
				  knowledgeable buyer would be willing to pay and a knowledgeable seller would be
				  willing to accept for the asset on an arms' length basis.
(g) Fixed scheduled premium policy or fixed
				  premium policy means a policy, including a single premium policy, under which
				  the amount and timing of payments are fixed by the company under or pursuant to
				  the terms of the policy and the failure to pay a scheduled premium results in
				  paid-up benefits and requires reinstatement to resume premium payments. For
				  this Part, fixed premium policies with guaranteed rates shall be governed by
				  the same rules as are applicable to flexible premium policies.
(h) Flexible premium policy means a policy
				  other than a fixed premium policy.
(i) Guaranteed-benefit date means the date on
				  which an unadjusted cash surrender benefit is to be made available under a
				  policy after a specified time interval.
(j) Guaranteed rate means an interest rate to
				  be credited to the unborrowed portion of the policy value, not less frequently
				  than annually, that (1) is guaranteed for a specified period of time equal to
				  the specified time interval as defined below; (2) is constant or conforms to a
				  schedule of rates provided in, or declared in advance of crediting pursuant to,
				  the policy; (3) is not based on actual investment experience; and (4) is a high
				  interest rate such that not more than a minimal increase (as defined from time
				  to time by the superintendent) in the interest rate is likely to be credited
				  not less frequently than annually (as distinguished, for example, from a
				  contractually guaranteed minimum rate of interest over which additional
				  interest is likely to be declared and credited).
(k) Hedging instrument means:
(1) any interest rate futures contract,
				  foreign currency futures contract or option used in a bona fide hedging
				  transaction pursuant to section 1403 (d)  of the Insurance
				  Law; or
(2) any financial contract
				  or arrangement entered into in connection with investment in one or more
				  securities in order to provide certainty of return or to create a synthetic
				  investment.