Virginia Administrative Code › Title 14 - INSURANCE › Agency 5 - STATE CORPORATION COMMISSION, BUREAU OF INSURANCE › Chapter 80 - RULES GOVERNING VARIABLE LIFE INSURANCE › Article IV - Variable Life Insurance Form › Section 14VAC5-80-120 - Mandatory policy benefit and design requirements

Current through Register Vol. 40, No. 24, July 15, 2024
Variable life insurance policies delivered or issued for
					 delivery in this Commonwealth shall comply with the following minimum
					 requirements.
1. Mortality and expense
				  risks shall be borne by the insurer. The mortality and expense charges shall be
				  subject to the maximums stated in the contract.
2. For scheduled premium policies, a minimum
				  death benefit shall be provided in an amount at least equal to the initial face
				  amount of the policy less any indebtedness so long as premiums are duly
				  paid.
3. The policy shall reflect
				  the investment experience of one or more separate accounts established and
				  maintained by the insurer which shall be set forth in the policy. The insurer
				  must demonstrate that the reflection of the investment experience in variable
				  life insurance policy is actuarially sound.
4. Each variable life insurance policy shall
				  be credited with the full amount of the net investment return applied to the
				  benefit base.
5. Any changes in
				  variable death benefits of each variable life insurance policy shall be
				  determined at least annually.
6.
				  The cash value of each variable life insurance policy shall be determined at
				  least monthly. The method of computation of cash values and other nonforfeiture
				  benefits, as described either in the policy or in a statement filed with the
				  insurance supervisory official of the state in which the policy is delivered,
				  or issued for delivery, shall be in accordance with actuarial procedures that
				  recognize the variable nature of the policy. The method of computation must be
				  such that, if the net investment return credited to the policy at all times
				  from the date of issue should be equal to the assumed investment rate with
				  premiums and benefits determined accordingly under the terms of the policy,
				  then the resulting cash values and other nonforfeiture benefits must be at
				  least equal to the minimum values required by § 38.2-3200 through §
				  38.2-3229 (Standard Nonforfeiture Law) of the Code of Virginia for a general
				  account policy with such premiums and benefits. The assumed investment rate
				  shall not exceed the maximum interest rate permitted under the standard
				  nonforfeiture law of this Commonwealth. If the policy does not contain an
				  assumed investment rate this demonstration shall be based on the maximum
				  interest rate permitted under the standard nonforfeiture law. The method of
				  computation may disregard incidental minimum guarantees as to the dollar
				  amounts payable. Incidental minimum guarantees include, for example, but are
				  not to be limited to, a guarantee that the amount payable at death or maturity
				  shall be at least equal to the amount that otherwise would have been payable if
				  the net investment return credited to the policy at all times from the date of
				  issue had been equal to the assumed investment rate.
7. The computation of values required for
				  each variable life insurance policy may be based upon such reasonable and
				  necessary approximations as are acceptable to the Commission.
Statutory Authority
§§ 12.1-13 and 38.2-3313 of the Code of
						Virginia.