New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 9 - LIFE INSURANCE AND ANNUITIES › Part 8 - VARIABLE LIFE INSURANCE › Section 13.9.8.17 - MANDATORY POLICY BENEFIT AND DESIGN REQUIREMENTS

Current through Register Vol. 35, No. 13, July 16, 2024
Variable life insurance policies delivered or issued for
				  delivery in this state shall comply with the following minimum
				  requirements:
A. Mortality and expense
				risks shall be borne by the insurer. The mortality and expense charges shall be
				subject to the maximums stated in the contract.
B. For scheduled premium policies, a minimum
				death benefit shall be provided in an amount at least equal to the initial face
				amount of the policy so long as premiums are duly paid (subject to the
				provisions of 13 NMAC 9.8.18.2.2) [now Paragraph (2) of Subsection B of
				13.9.8.18 NMAC].
C. The policy
				shall reflect the investment experience of one or more separate accounts
				established and maintained by the insurer. The insurer must demonstrate that
				the reflection of investment expense in the variable life insurance policy is
				actuarially sound.
D. Each variable
				life insurance policy shall be credited with the full amount of the net
				investment return applied to the benefit base.
E. Any changes in variable death benefits of
				each variable life insurance policy shall be determined at least
				annually.
F. The cash value of each
				variable life insurance policy shall be determined at least monthly. The method
				of computation of cash values and other non-forfeiture benefits, as described
				either in the policy or in a statement filed with the superintendent of the
				state in which the policy is delivered, or issued for delivery, shall be in
				accordance with actuarial procedures that recognize the variable nature of the
				policy. The method of computation must be such that, 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, then the resulting cash values and
				other non-forfeiture benefits must be at least equal to the minimum values
				required by the Standard Non-Forfeiture Law of New Mexico for a general account
				policy with such premiums and benefits. The assumed investment rate shall not
				exceed the maximum interest rate permitted under the Standard Non-Forfeiture
				Law of New Mexico. If the policy does not contain an assumed investment rate
				this demonstration shall be based on the maximum interest rate permitted under
				the Standard Non-Forfeiture Law. The method of computation may disregard
				incidental minimum guarantees as to the dollar amounts payable. Incidental
				minimum guarantees include, for example, 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.
G. The computation of values required for
				each variable life insurance policy may be based upon such reasonable and
				necessary approximations as are acceptable to the superintendent.