North Dakota Administrative Code › Title 45 - Insurance, Commissioner of › Article 45-04 - Life Insurance › Chapter 45-04-01.1 - Life Insurance Illustrations Model Regulation › Section 45-04-01.1-05 - Standards for basic illustrations

Current through Supplement No. 393, July, 2024
1.
Format.
A basic illustration must conform with the following
				requirements:
a. The illustration must be
				labeled with the date on which it was prepared.
b. Each page, including any explanatory notes
				or pages, must be numbered and show its relationship to the total number of
				pages in the illustration (e.g., the fourth page of a seven-page illustration
				shall be labeled "page 4 of 7 pages").
c. The assumed dates of payment receipt and
				benefit payout within a policy year must be clearly identified.
d. If the age of the proposed insured is
				shown as a component of the tabular detail, it must be issue age plus the
				numbers of years the policy is assumed to have been in force.
e. The assumed payments on which the
				illustrated benefits and values are based must be identified as premium outlay
				or contract premium, as applicable. For policies that do not require a specific
				contract premium, the illustrated payments must be identified as premium
				outlay.
f. Guaranteed death
				benefits and values available upon surrender, if any, for the illustrated
				premium outlay or contract premium must be shown and clearly labeled
				guaranteed.
g. If the illustration
				shows any nonguaranteed elements, they may not be based on a scale more
				favorable to the policy owner than the insurer's illustrated scale at any
				duration. These elements must be clearly labeled nonguaranteed.
h. The guaranteed elements, if any, must be
				shown before corresponding nonguaranteed elements and must be specifically
				referred to on any page of an illustration that shows or describes only the
				nonguaranteed elements (e.g., "see page one for guaranteed elements").
i. The account or accumulation
				value of a policy, if shown, must be identified by the name this value is given
				in the policy being illustrated and shown in close proximity to the
				corresponding value available upon surrender.
j. The value available upon surrender must be
				identified by the name this value is given in the policy being illustrated and
				must be the amount available to the policy owner in a lump sum after deduction
				of surrender charges, policy loans, and policy loan interest, as applicable.
k. Illustrations may show policy
				benefits and values in graphic or chart form in addition to the tabular form.
l. Any illustration of
				nonguaranteed elements must be accompanied by a statement indicating that:
(1) The benefits and values are not
				guaranteed;
(2) The assumptions on
				which they are based are subject to change by the insurer; and
(3) Actual results may be more or less
				favorable.
m. If the
				illustration shows that the premium payer may have the option to allow policy
				charges to be paid using nonguaranteed values, the illustration must clearly
				disclose that a charge continues to be required and that, depending on actual
				results, the premium payer may need to continue or resume premium outlays.
				Similar disclosure must be made for premium outlay of lesser amounts or shorter
				durations than the contract premium. If a contract premium is due, the premium
				outlay display may not be left blank or show zero unless accompanied by an
				asterisk or similar mark to draw attention to the fact that the policy is not
				paid up.
n. If the applicant plans
				to use dividends or policy values, guaranteed or nonguaranteed, to pay all or a
				portion of the contract premium or policy charges, or for any other purpose,
				the illustration may reflect those plans and the impact on future policy
				benefits and values.