Pennsylvania Code › Title 31 - INSURANCE › Part IV - Life Insurance › Chapter 82 - VARIABLE LIFE INSURANCE › INSURANCE POLICY REQUIREMENTS › Section 82.23 - Mandatory policy benefit and design requirements

Current through Register Vol. 54, No. 28, July 13, 2024
Variable life insurance policies delivered or issued for
					 delivery in this Commonwealth shall comply with the following minimum
					 requirements:
(1) The mortality and
				  expense risk shall be borne by the insurer. The mortality and expense charges
				  shall be subject to the maximums stated in the contract. For a flexible premium
				  policy, the guaranteed maximum mortality charges may not exceed charges based
				  on a mortality table permitted for calculation of nonforfeiture benefits.
				  Guaranteed charges of up to 130% of an approved version of 1958 CSO or up to
				  135% of an approved version of 1980 CSO will be considered for policies issued
				  on a simplified underwriting basis. Guaranteed charges of up to 145% of an
				  approved version of 1958 CSO or up to 150% of an approved version of 1980 CSO
				  will be considered for policies issued on a guaranteed basis. The guaranteed
				  maximum mortality charges for a flexible premium policy issued to an insured in
				  a rated premium class may reflect that the insured is rated. A premium class
				  composed of smokers is considered to be a smoker class and not a rated premium
				  class.
(2) 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 paid, subject
				  to §
										82.25 (relating to policy loan
				  provisions).
(3) The policy shall
				  reflect the investment experience of one or more separate accounts established
				  and maintained by the insurer. The insurer shall demonstrate that the
				  reflection of investment experience in the variable life insurance policy is
				  actuarially sound.
(4) Each
				  variable life insurance policy shall be credited with the full amount of the
				  net investment return applied to the benefit base.
(5) Changes in variable death benefits of
				  each variable life insurance policy shall be determined at least
				  annually.
(6) The cash value of
				  each variable life insurance policy shall be determined at least monthly. The
				  method of computation of cash values and other nonforfeiture benefits, as
				  described either in the policy or in a statement filed with the Commissioner 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 shall 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 nonforfeiture benefits shall be at least equal to the minimum values
				  required by section 410A of the act (40 P. S. §
											510.1) for a general account policy with
				  those premiums and benefits. The assumed investment rate may not exceed the
				  maximum interest rate permitted under section 410A of the act. If the policy
				  does not contain an assumed investment rate this demonstration shall be based
				  on the maximum interest rate permitted under section 410A of the act. The
				  method of computation may disregard incidental minimum guarantees as to the
				  dollar amounts payable. Incidental minimum guarantees include but are not
				  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.
(7) 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 Commissioner.
This section cited in 31 Pa. Code §
												82.21 (relating to insurance
						policy qualification); and 31 Pa. Code §
												82.24 (relating to mandatory
						policy provisions).