New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 25 - FUNERAL INSURANCE POLICIES › Section 11:4-25.2 - Definitions

Current through Register Vol. 56, No. 14, July 15, 2024
The following words and terms, where used in this subchapter, shall have the following meanings unless the context clearly indicates otherwise.
"Funeral insurance policy" means any insurance policy or annuity contract (other than "credit life insurance" as defined at 45:7-82 ) that at the time of issue, was intended to provide or which was explicitly marketed for the purpose of providing funds to the provider, whether directly or indirectly, at the time of the insured's death in connection with a prepaid funeral agreement.
"Funeral trust" means a commingled or non-commingled account held in a pooled trust or "P.O.D." account, established in accordance with 2A:102-13 et seq. or 3B:11-16 et seq., which is intended as the depository for cash payments connected with a prepaid funeral agreement.
"Insurance adjusted premium fund" at the end of any policy year means the quantity (E) times the following quantity: (A) plus (B), the sum multiplied by (C), less (D), where:
(A) is the insurance adjusted premium fund at the end of the previous year (or zero at policy inception);
(B) is the insurance adjusted premium fund consideration for the policy year;
(C) is 1 plus the premium fund interest rate;
(D) is the premium fund mortality rate times the death benefit during the policy year (including any increases to the initial death benefit as provided by this formula); and
(E) is 1 divided by the quantity: 1 minus the premium fund mortality rate.
"Insurance adjusted premium fund consideration" means:
1. In the case of a single premium policy, 90 percent of the actual gross premium less $ 75.00; and
2. In the case of multiple premium policies, 65 percent of the first year gross premium and 87.5 percent of any renewal gross premium, less the smaller of $ 30.00 and 10 percent of the gross premium.
"Premium fund interest rate" means the interest rate specified at 17B:25-20 or 21, as applicable, for calculating the minimum nonforfeiture values for deferred annuities.
"Premium fund mortality rate" means the mortality rate used in calculating the minimum cash values required by law. This mortality rate is based on the 1980 CSO table or 2001 CSO Table, as applicable (with or without smoker differentiation, as applicable).
"Preneed funeral arrangements" means funeral arrangements made with an intended funeral recipient or his or her guardian, agent or next of kin, for the funeral of the intended funeral recipient.
"Prepaid funeral agreement" means a written agreement and all documents related thereto made by a purchaser with a provider prior to the death of the intended funeral recipient, with which there is connected a provisional means of paying for preneed funeral arrangements upon the death of the intended funeral recipient by the use of a funeral trust or funeral insurance policy, made payable to a provider and in return for which the provider promises to furnish, make available or provide the prepaid funeral goods or services, or both, specified in the agreement, the delivery of which occurs after the death of the intended funeral recipient.
"Provider" means a person, firm or corporation duly licensed and registered pursuant to the "Mortuary Science Act," 45:7-32 et seq., to engage in the business and practice of funeral directing or mortuary science, or an individual serving as an agent thereof and so licensed:
1. Operating a duly registered mortuary in accordance with 45:7-32 et seq. and the regulations promulgated thereunder;
2. Having his, her or its business and practice based within the physical confines of the registered mortuary; and
3. Engaging in the practice of making preneed funeral arrangements, including, but not limited to, offering the opportunity to purchase or enroll in prepaid funeral agreements.