Pennsylvania Code › Title 31 - INSURANCE › Part IV - Life Insurance › Chapter 83 - DISCLOSURES IN SOLICITATION OF LIFE INSURANCE › Subchapter A - REQUIRED DISCLOSURES IN THE SOLICITATION OF LIFE INSURANCE › Section 83.3 - Disclosure statement

Current through Register Vol. 54, No. 28, July 13, 2024
(a)
Required written disclosure.
A life insurance agent, broker or
				  insurer soliciting the type of business to which this subchapter applies shall
				  provide a prospective purchaser with a written disclosure statement clearly
				  labeled as such. An acceptable disclosure statement is attached as Appendix A.
				  If the Appendix A disclosure statement will be used, a letter to that effect,
				  prior to use, is adequate notification to the Department. However, if a
				  statement different than Appendix A will be used, the statement shall be filed
				  with the Department for review prior to use. If an insurer desires to use an
				  advertisement as its disclosure statement, the portion of the advertisement
				  containing the disclosure statement shall be filed for review prior to use. A
				  disclosure statement shall be a document which shall describe the purpose and
				  importance of the disclosure and describe the significant elements of the
				  policy and riders being offered.
(1) A
				  statement that the disclosure is for the insured's protection, provides basic
				  information about the cost and coverage of the insurance and should be read
				  carefully.
(2) A statement that the
				  disclosure statement may not be considered as an offer to contract or as
				  altering or modifying any policy or rider that might be issued.
(3) The name, age and sex of the proposed
				  insured, to the extent that each is known or can reasonably become known to the
				  company, broker or agent at the time of presentation.
(4) Source of insurance, including the
				  following:
(i) If applicable, the name of the
				  agent or broker, home address or agency address and the home or agency
				  telephone number of the insurance agent or broker making the
				  solicitation.
(ii) The name and
				  home address (city and state) of the insurer to whom applications will be made
				  and a mailing address of the insurer's home, executive or administrative office
				  to which correspondence should be addressed.
(5) Information about the basic policy, rider
				  or supplemental benefit built into the policy, such as descriptive title, as
				  "whole life, 20 year decreasing term, endowment at age 65," and the
				  like.
(6) Amount of coverage and
				  benefits offered.
(i) Separately for each
				  basic policy, rider and supplemental benefit built into the policy.
(A) The face amount of coverage; if not
				  applicable, a description of the coverage.
(B) If the face amount of coverage changes
				  (other than through the exercise of dividend options), an explanation as to
				  what changes will occur and when, as "coverage reduces $100 per month till age
				  65 when the coverage expires."
(ii) Retirement income. If the policy is one
				  primarily designated to pay a guaranteed income, the monthly income payable for
				  life with a ten-year period certain at the appropriate age.
(iii) Cash surrender value.
(A) In policies which develop such values,
				  the applicable amount of cash surrender value per $1,000 or face amount at the
				  end of 5, 10 and 20 policy years and at age 65.
(B) If a loan option is available, the annual
				  percentage loan interest charge.
(7) Premiums.
(i) Separately for each basic policy and
				  rider:
(A) Annual premium; if not known,
				  premium for mode quoted to prospect.
(B) If the premium quoted in clause (A)
				  changes other than by the exercise of an option contained in the policy such as
				  a right of renewal of a term life insurance policy or the exercise of a
				  dividend option:
(I) If one premium changes,
				  the ultimate premium and the effective time.
(II) If more than one premium changes, two
				  representative premiums and the ultimate premium and the effective time of each
				  such change; or an explanation as to what changes will occur, as "Amount of
				  premium increases 3% each year" and the ultimate premium and the effective
				  time.
(C) If the policy
				  contains supplemental built-in benefits, a statement that the cost for such
				  benefits is included in the premium for the policy.
(ii) Total initial annual premium for the
				  policy and rider. If not known, total initial premium for the policy and rider
				  for the payment mode quoted to prospect.
(8) Dividends payable.
(i) If the company chooses to show
				  illustrations, a statement that illustrated dividends are not a guarantee of
				  what future dividends will be.
(ii)
				  If a payment of a dividend is contingent upon the payment of the next premium
				  due, a statement to this effect.
(iii) Dividend illustrations used shall be
				  for policy years 10 and 20 per $1,000 or face amount. A statement that the
				  dividend illustrations will be based on current interest, mortality, and
				  expense experience of the company as reflected in the dividends currently paid
				  and will pertain to the policy or rider being solicited.
(9) Surrender comparison index for policies.
(i) A disclosure that a surrender comparison
				  index will be provided upon delivery of the policy or earlier if requested. If
				  requested earlier, the index disclosure must be provided as soon as reasonably
				  possible. This requirement is not applicable to the following kinds of
				  insurance:
(A) Annuities.
(B) Group life insurance.
(C) Credit life insurance.
(D) Life insurance of less than
				  $5,000.
(E) Life insurance on
				  substandard risks.
(F) Life
				  insurance issued in connection with qualified funded pension plans and
				  qualified retirement plans.
(G)
				  Life insurance issued as a result of a contractual policy change or conversion
				  provision.
(H) Life insurance where
				  the cost is borne in whole or in part by the employer of the insured.
(I) Policies having a varying face amount
				  (resulting from other than the application of dividends).
(J) Variable life insurance.
(K) Family policies.
(L) Term policies.
(M) Riders.
(ii) A provision for the election of earlier
				  delivery.
(iii) A brief explanation
				  of what the surrender comparison index is.
(10) Upon request, the company, fraternal
				  benefit society, or agent, if applicable, will furnish the prospective insured
				  with additional information about the insurance described.