New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter III - Policy and Certificate Provisions › Subchapter A - Life, Accident and Health Insurance › Part 54 - Variable Life Insurance › Section 54.7 - Policy value and cash surrender value

Current through Register Vol. 46, No. 28, July 10, 2024
The policy value and cash surrender value shall be
					 determined no less frequently than annually for a private placement variable
					 life insurance policy and at least monthly for any other variable life
					 insurance policy. A summary of the method of computation of cash surender
					 values and other nonforfeiture benefits shall be described in the policy; a
					 complete statement of the method of computation shall be filed with the
					 superintendent. Such method shall be in accordance with actuarial procedures
					 that recognize the variable nature of the policy. The method of computation
					 must be such that it complies with subdivision (a) or (b) of this
					 section:
(a) If the net investment
				  return credited to the policy at all times from the date of issue should be
				  equal to the assumed investment rate with premiums and benefits determined
				  accordingly under the terms of the policy or, where premiums are not determined
				  by the terms of the policy, according to the planned premiums to be paid as set
				  forth in the application, then the resulting cash surrender values and other
				  nonforfeiture benefits must be at least equal to the minimum values required by
				  section 4221  of the Insurance Law, for a general
				  account policy with such premiums and benefits. The assumed investment rate
				  shall not exceed the maximum interest rate permitted under section 4221. If the
				  policy does not contain an assumed investment rate, this demonstration shall be
				  based on the maximum interest rate permitted under section 4217  of the Insurance Law, for a general
				  account life insurance policy of comparable duration based on the planned
				  premium. The method of computation may disregard incidental minimum guarantees
				  as to the dollar amounts payable. Incidental minimum guarantees include, but
				  are not to be limited to, a guarantee that the amount payable at death or
				  maturity shall be at least equal to the amount that otherwise would have been
				  payable if the net investment return credited to the policy at all times from
				  the date of issue had been equal to the assumed investment rate.
(b) Alternative policy value and cash
				  surrender valuerequirement.
(1) Definitions.
				  Wherever used in this section, the terms have the respective meanings set forth
				  or indicated in this paragraph.
(i) Policy
				  value is equal to gross premiums paid (excluding separate identified premiums
				  for riders or supplementary benefits which are not credited to policy value)
				  plus net investment income (which may be positive or negative and may vary
				  based on policy loans), less the following as specified in the policy:
(a) administrative charges (which may be
				  taken in part from premiums and in part from policy value);
(b) acquisition and other charges;
(c) deferred acquisition and other
				  charges;
(d) benefits
				  charges;
(e) service
				  charges;
(f) partial withdrawals;
				  and
(g) partial surrender
				  charges.