Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 4 - LIFE AND ANNUITY › Subchapter O - VARIABLE LIFE INSURANCE › Section 4.1502 - Definitions

Current through Reg. 49, No. 28; July 12, 2024
The following words and terms, when used in this
					 subchapter, have the following meanings unless the context clearly indicates
					 otherwise.
(1) Affiliate of an
				  insurer--Any person, directly or indirectly, controlling, controlled by, or
				  under common control with such insurer; any person who regularly furnishes
				  investment advice to such insurer with respect to its separate accounts for
				  which a specific fee or commission is charged; or any director, officer,
				  partner, or employee of such insurer, controlling or controlled person, or
				  person providing investment advice or any member of the immediate family of
				  such person.
(2) Agent--Any person,
				  corporation, partnership, or other legal entity that is licensed by this state
				  as a life insurance agent.
(3)
				  Assumed investment rate--The rate of investment return that would be required
				  to be credited to a variable life contract, after deduction of charges for
				  taxes, investment expenses, and mortality and expense guarantees to maintain
				  the variable death benefit equal at all times to the amount of death benefit,
				  other than incidental insurance benefits, which would be payable under the plan
				  of insurance if the death benefit did not vary according to the investment
				  experience of the separate account.
(4) Benefit base--The amount to which the net
				  investment return is applied.
(5)
				  Cash surrender value--The net cash surrender value plus any amounts outstanding
				  as contract loans.
(6)
				  Commissioner--The commissioner of insurance of this state.
(7) Contract cost factors--Those amounts that
				  affect the price per thousand of life insurance coverage or other benefits.
				  They include interest, mortality, expense charges, and fees, including any
				  surrender charges, but not persistency assumptions.
(8) Contract processing day--The day on which
				  charges authorized in the contract are deducted from the contract
				  value.
(9) Contract value--The
				  amount to which interest is credited, and against which separately identified
				  mortality charges, expense charges, fees, and other charges are
				  debited.
(10) Control (including
				  the terms "controlling," "controlled by," and "under common control with")--The
				  possession, direct or indirect, of the power to direct or cause the direction
				  of the management and policies of a person, whether through ownership of voting
				  securities, by contract other than a commercial contract for goods or
				  nonmanagement services, or otherwise, unless the power is the result of an
				  official position with or corporate office held by the person. Control is
				  presumed to exist if any person, directly or indirectly, owns, controls, holds
				  with the power to vote, or holds proxies representing more than 10% of the
				  voting securities of any other person. This presumption may be rebutted by a
				  showing made to the satisfaction of the commissioner that control does not
				  exist in fact. The commissioner may determine, after furnishing all persons in
				  interest with notice and opportunity to be heard and making specific findings
				  of fact to support such determination, that control exists in fact,
				  notwithstanding the absence of a presumption to that effect.
(11) Flexible premium contract--Any variable
				  life contract other than a scheduled premium variable life contract as defined
				  in the definition of scheduled premium variable life contract.
(12) General account--All assets of the
				  insurer other than assets in separate accounts established under Insurance Code
				  Chapter 1152, concerning Separate Accounts, Variable Contracts, and Related
				  Products, or under the corresponding sections of the insurance laws of the
				  state of domicile of a foreign or alien insurer, whether or not for variable
				  life insurance.
(13) Incidental
				  insurance benefit--All insurance benefits in a variable life contract, other
				  than the variable death benefit and the minimum death benefit, including, but
				  not limited to, accidental death and dismemberment benefits, disability
				  benefits, guaranteed insurability options, family income, or term
				  riders.
(14) Minimum death
				  benefit--The amount of the guaranteed death benefit, other than incidental
				  insurance benefits, payable under a variable life contract regardless of the
				  investment performance of the separate account.
(15) Net cash surrender value--The maximum
				  amount payable to the contract owner upon surrender.
(16) Net investment return--The rate of
				  investment return in a separate account to be applied to the benefit
				  base.
(17) Person--An individual,
				  corporation, partnership, association, trust, or fund.
(18) Scheduled premium contract--Any variable
				  life contract under which both the amount and timing of premium payments are
				  fixed by the insurer.
(19) Separate
				  account--A separate account established under Insurance Code Chapter 1152, or
				  under the corresponding section of the insurance laws of the state of domicile
				  of a foreign or alien insurer.
(20)
				  Structural changes--Those changes that are separate from the automatic workings
				  of the contract. Such changes usually would be initiated by the contract owner
				  and include changes in the guaranteed benefits, changes in latest maturity
				  date, or changes in allowable premium payment period.
(21) Variable death benefit--The amount of
				  the death benefit, other than incidental benefits payable under a variable life
				  contract dependent on the investment performance of the separate account, which
				  the insurer would have to pay in the absence of any minimum death
				  benefit.
(22) Variable life
				  contract--Any individual variable life insurance contract that provides for
				  life insurance the amount or duration of which varies according to the
				  investment experience of any separate account or accounts established and
				  maintained by the insurer as to such contract, under Insurance Code Chapter
				  1152, or under the corresponding section of the insurance laws of the state of
				  domicile of a foreign or alien insurer.