Virginia Administrative Code › Title 14 - INSURANCE › Agency 5 - STATE CORPORATION COMMISSION, BUREAU OF INSURANCE › Chapter 30 - RULES GOVERNING LIFE INSURANCE AND ANNUITY REPLACEMENTS › Section 14VAC5-30-20 - Definitions

Current through Register Vol. 40, No. 24, July 15, 2024
The following words and terms when used in this chapter shall
				  have the following meaning unless the context clearly indicates
				  otherwise:
"Agent" or "producer" means an individual or business entity
				  that sells, solicits, or negotiates contracts of insurance or annuity in this
				  Commonwealth.
"Commission" means the State Corporation Commission.
"Direct-response solicitation" means a solicitation through a
				  sponsoring or endorsing entity or individually, made solely through mail,
				  telephone, the Internet or other mass communication media.
"Existing insurer" means the insurance company whose policy
				  or contract is or will be changed or affected in a manner described within the
				  definition of "replacement."
"Existing policy or contract" means an individual life
				  insurance policy (policy) or annuity contract (contract) in force, including a
				  policy under a binding or conditional receipt or a policy or contract that is
				  within an unconditional refund period.
"Financed purchase" means the purchase of a new policy
				  involving the actual or intended use of funds obtained by the withdrawal or
				  surrender of, or by borrowing from values of an existing policy to pay all or
				  part of any premium due on the new policy. For purposes of a regulatory review
				  of an individual transaction only, if a withdrawal, surrender or borrowing
				  involving the policy values of an existing policy is used to pay premiums on a
				  new policy owned by the same policyholder and issued by the same company within
				  four months before or 13 months after the effective date of the new policy, it
				  will be deemed prima facie evidence of the policyholder's intent to finance the
				  purchase of the new policy with existing policy values. This prima facie
				  standard is not intended to increase or decrease the monitoring obligations
				  contained in
				  14VAC5-30-60 A 5.
"Guaranteed elements" means the premiums, benefits, values,
				  credits or charges under a policy of life insurance or an annuity contract that
				  are guaranteed and determined at issue.
"Illustration" means a presentation or depiction that
				  includes nonguaranteed elements of a life insurance policy or an annuity
				  contract over a period of years.
"Insurer" means any insurance company required to be licensed
				  under the laws of this Commonwealth.
"Marketing communication" or "sales material" means printed,
				  written, electronic, or other material of any type from any source which is
				  used by an agent or insurer and which is designed to create or has the effect
				  of creating public interest in life insurance or annuities, or in an insurer or
				  agent, or induces or tends to induce the public to purchase, increase, modify,
				  reinstate, borrow on, surrender, replace or retain a policy or contract
				  including, but not limited to:
1.
				Printed or published material, audiovisual material, mailing envelopes,
				descriptive literature of an insurer or agent used in direct mail, newspapers,
				magazines, radio, Internet, telephone and television scripts, billboards or
				similar displays;
2. Descriptive
				literature and sales aids of all kinds, authored by the insurer, its agents, or
				third parties, issued, distributed, or used by an insurer or agent including
				but not limited to circulars, leaflets, booklets, depictions, illustrations,
				pictures, form letters, electronic solicitations, pamphlets, brochures, and
				books or portions thereof;
3.
				Materials, statements, or communications of any type used for the recruitment,
				training, and education of an insurer's sales personnel and agents which are
				designed to be used or are used to induce the public to purchase, increase,
				modify, reinstate, borrow on, surrender, replace, or retain a policy or
				contract; and
4. Prepared or
				extemporaneous sales talks, presentations, and material for use or used by
				sales personnel or agents.
"Marketing communication" or "sales material" for the purpose
				  of this chapter does not include:
1.
				Communications or materials used within an insurer's own organization, not used
				as a sales aid, and not disseminated to the public;
2. Communications with policy or contract
				holders other than material urging them to purchase, increase, modify,
				reinstate, borrow on, surrender, replace, or retain a policy or contract;
				or
3. A general announcement from a
				group or blanket policyholder to eligible individuals on an employment or
				membership list that a policy or program has been written or arranged; provided
				the announcement clearly indicates that it is preliminary to the issuance of a
				booklet explaining the proposed coverage.
"Nonguaranteed elements" means the premiums, benefits,
				  values, credits, or charges under a life insurance policy or an annuity
				  contract that are not guaranteed or not determined at issue.
"Policy summary" means:
1. For policies or contracts other than
				universal life policies, a written statement regarding a policy or contract
				that shall contain to the extent applicable, but need not be limited to, the
				following information: current death benefit; annual contract premium; current
				cash surrender value; current dividend; application of current dividend; and
				amount of outstanding loan.
2. For
				universal life policies, a written statement that shall contain at least the
				following information: the beginning and end date of the current report period;
				the policy value at the end of the previous report period and at the end of the
				current report period; the total amounts that have been credited or debited to
				the policy value during the current report period, identifying each by type
				(e.g., interest, mortality, expense and riders); the current death benefit at
				the end of the current report period on each life covered by the policy; the
				net cash surrender value of the policy as of the end of the current report
				period; and the amount of outstanding loans, if any, as of the end of the
				current report period.
"Replacing insurer" means the insurance company that issues
				  or proposes to issue a new policy or contract that replaces an existing policy
				  or contract or is a financed purchase.
"Registered contract" means a variable annuity contract or
				  variable life insurance policy subject to the prospectus delivery requirements
				  of the Securities Act of 1933 ( 15 USC § 77a et seq.).
"Replacement" means a transaction in which a new policy or
				  contract is to be purchased, and it is known or should be known to the
				  proposing agent, or the proposing insurer if there is no agent, that by reason
				  of the transaction, an existing policy or contract has been or is to be:
1. Lapsed, forfeited, surrendered or
				partially surrendered, assigned to the replacing insurer, or otherwise
				terminated;
2. Converted to reduced
				paid-up insurance, continued as extended term insurance, or otherwise reduced
				in value by the use of nonforfeiture benefits or other policy values;
3. Amended to effect either a reduction in
				benefits or in the term for which coverage would otherwise remain in force or
				for which benefits would be paid;
4. Reissued with any reduction in cash
				value;
5. Used in a financed
				purchase.
"Universal life policy" means a life insurance policy in
				  which separately identified interest credits (other than in connection with
				  dividend accumulation, premium deposit funds, or other supplementary accounts)
				  and mortality and expense charges are made to the policy. A universal life
				  policy may provide for other credits and charges, such as charges for the cost
				  of benefits provided by the rider.