Rhode Island Code of Regulations › Title 230 - Department of Business Regulation › Chapter 20 - Insurance › Subchapter 25 - LIFE AND ANNUITIES › Part 14 - Life Insurance Illustrations (230-RICR-20-25-14) › Section 230-RICR-20-25-14.4 - Definitions

Current through June 14, 2024
A. For the purposes of this regulation:
1. "Actuarial Standards Board" means the
				  board established by the American Academy of Actuaries to develop and
				  promulgate standards of actuarial practice.
2. "Contract premium" means the gross premium
				  that is required to be paid under a fixed premium policy, including the premium
				  for a rider for which benefits are shown in the illustration.
3. "Currently payable scale" means a scale of
				  non-guaranteed elements in effect for a policy form as of the preparation date
				  of the illustration or declared to become effective within the next ninety-five
				  (95) days.
4. "Disciplined current
				  scale" means a scale of non-guaranteed elements constituting a limit on
				  illustrations currently being illustrated by an insurer that is reasonably
				  based on actual recent historical experience, as certified annually by an
				  illustration actuary designated by the insurer. Further guidance in determining
				  the disciplined current scale as contained in standards established by the
				  Actuarial Standards Board may be relied upon if the standards:
a. Are consistent with all provisions of this
				  regulation;
b. Limit a disciplined
				  current scale to reflect only actions that have already been taken or events
				  that have already occurred;
c. Do
				  not permit a disciplined current scale to include any projected trends of
				  improvements in experience or any assumed improvements in experience beyond the
				  illustration date; and
d. Do not
				  permit assumed expenses to be less than minimum assumed expenses.
5. "Generic name" means a short
				  title descriptive of the policy being illustrated such as "whole life," "term
				  life" or "flexible premium adjustable life."
6. "Guaranteed elements" and "non-guaranteed
				  elements"
a. "Guaranteed elements" means the
				  premiums, benefits, values, credits or charges under a policy of life insurance
				  that are guaranteed and determined at issue.
b. "Non-guaranteed elements" means the
				  premiums, benefits, values, credits or charges under a policy of life insurance
				  that are not guaranteed or not determined at issue.
7. "Illustrated scale" means a scale of
				  non-guaranteed elements currently being illustrated that is not more favorable
				  to the policy owner than the lesser of:
a. The
				  disciplined current scale; or
b.
				  The currently payable scale.
8. "Illustration" means a presentation or
				  depiction that includes non-guaranteed elements of a policy of life insurance
				  over a period of years and that is one of the three (3) types defined below:
a. "Basic illustration" means a ledger or
				  proposal used in the sale of a life insurance policy that shows both guaranteed
				  and non-guaranteed elements.
b.
				  "Supplemental illustration" means an illustration furnished in addition to a
				  basic illustration that meets the applicable requirements of this regulation,
				  and that may be presented in a format differing from the basic illustration,
				  but may only depict a scale of non-guaranteed elements that is permitted in a
				  basic illustration.
c. "In force
				  illustration" means an illustration furnished at any time after the policy that
				  it depicts has been in force for one year or more.
9. "Illustration actuary" means an actuary
				  meeting the requirements of §
											14.11   of this Part who certifies to
				  illustrations based on the standard of practice promulgated by the Actuarial
				  Standards Board.
10. "Insurance
				  Commissioner" or "Commissioner" means the Director of the Department of
				  Business Regulation or his or her designee.
11. "Lapse-supported illustration" means an
				  illustration of a policy form failing the test of self-supporting as defined in
				  this regulation, under a modified persistency rate assumption using persistency
				  rates underlying the disciplined current scale for the first five (5) years and
				  100 percent policy persistency thereafter.
12. "Minimum assumed expenses" means the
				  minimum expenses that may be used in the calculation of the disciplined current
				  scale for a policy form. The insurer may choose to designate each year the
				  method of determining assumed expenses for all policy forms from the following:
a. Fully allocated expenses;
b. Marginal expenses; and
c. A generally recognized expense table based
				  on fully allocated expenses representing a significant portion of insurance
				  companies and approved by the National Association of Insurance Commissioners
				  or by the commissioner.
d. Marginal
				  expenses may be used only if greater than a generally recognized expense table.
				  If no generally recognized expense table is approved, fully allocated expenses
				  must be used.
13.
				  "Non-term group life" means a group policy or individual policies of life
				  insurance issued to members of an employer group or other permitted group
				  where:
a. Every plan of coverage was selected
				  by the employer or other group representative;
b. Some portion of the premium is paid by the
				  group or through payroll deduction; and
c. Group underwriting or simplified
				  underwriting is used.
14. "Policy owner" means the owner named in
				  the policy or the certificate holder in the case of a group policy.
15. "Premium outlay" means the amount of
				  premium assumed to be paid by the policy owner or other premium payer
				  out-of-pocket.
16.
				  "Self-supporting illustration" means an illustration of a policy form for which
				  it can be demonstrated that, when using experience assumptions underlying the
				  disciplined current scale, for all illustrated points in time on or after the
				  fifteenth policy anniversary or the twentieth policy anniversary for
				  second-or-later-to-die policies (or upon policy expiration if sooner), the
				  accumulated value of all policy cash flows equals or exceeds the total policy
				  owner value available. For this purpose, policy owner value will include cash
				  surrender values and any other illustrated benefit amounts available at the
				  policy owner's election.