Pennsylvania Code › Title 31 - INSURANCE › Part IV - Life Insurance › Chapter 89 - APPROVAL OF LIFE, ACCIDENT AND HEALTH INSURANCE › Subchapter B - REQUIREMENTS FOR LIFE INSURANCE › INDIVIDUAL POLICIES › Section 89.42 - Nonforfeiture value requirements

Current through Register Vol. 54, No. 28, July 13, 2024
(a)
General.
The nonforfeiture values (for the age for which the
					 form is filled in for a typical plan of insurance) to be issued under a
					 particular policy form should be included. The Department has approved
					 reference to the Commissioners' Standard Non-Forfeiture Value Method in lieu of
					 explanation of the method of calculating cash values under the Standard
					 Non-Forfeiture Law, section 410A of the act (40 P.S. §
												510.1), and insurers using the method may
					 refer thereto in the forms submitted. If no nonforfeiture values develop, the
					 submission letter should so state.
(b)
Recommended statement in policy.
It is suggested that a provision be included in the policy
					 substantially similar to the following:
The cash values and nonforfeiture benefits available
						under this policy are equal to or greater than the minimum required by statute
						of the state in which this policy is delivered.
(c)
Automatic premium loan.
An automatic premium loan provision should be separately captioned and not
					 included under or with the nonforfeiture provisions.
(d)
Substandard plans.
Substandard plans in which the extended insurance option is not available shall
					 indicate by the proper text in the policy and endorsements that such option and
					 values are not applicable. Tables which contain headings and spaces for the
					 insertion of extended insurance values shall be printed, overprinted or stamped
					 in a prominent manner to indicate that, in cases in which the values are not
					 granted, the values are not applicable.
(e)
Nonforfeiture benefit
					 limitations.
Nonforfeiture benefit limitations shall conform with the
					 following:
(1) Insurers may offer extended
					 term insurance or paid-up insurance as a nonforfeiture benefit. These benefits
					 need not include supplementary built-in insurance benefits provided for while
					 the policy is in force, nor need they include benefits provided by riders
					 attached thereto.
(2) Where the
					 nonforfeiture benefits of a policy do not apply to supplementary benefits which
					 are built into the policy or attached by riders, the policyholder shall be so
					 notified. Notification shall be in the following or comparable form:
Any insurance continued under these nonforfeiture
						provisions shall not include benefits which supplement the basic life insurance
						benefit, whether these supplemental benefits are mentioned in the policy itself
						or provided by a rider attached to the policy, unless specifically provided
						otherwise where the supplemental benefit is described.
(3) The provision set forth in paragraph (2)
					 should be included in the first section of the policy which describes
					 nonforfeiture values.
(i) If the provision is
					 located elsewhere in the policy, it shall be in a place where it is equally or
					 more visible.
(ii) Where
					 supplemental benefits are described in a rider to the policy and not in the
					 policy itself, notification of nonapplicability of the benefits as a
					 nonforfeiture value may be made in the rider describing the benefit. The notice
					 shall be prominently located.
(iii)
					 Policy and rider forms will be disapproved which do not include the provision
					 in a location acceptable to the Department.
(4) The provision set forth in paragraph (2)
					 shall be required in life insurance policies or riders issued 90 days after the
					 effective date of this subsection. Compliance may be made by endorsement to
					 policies or riders issued 90 days after the effective date but before January
					 1, 1976. After January 1, 1976, life insurance forms shall incorporate the
					 provision into the policy or rider itself.