SECTIONS 10159.1-10167.5

10159.1.  This article is applicable only to policies and contractsissued on or after the operative date as to such policies orcontracts of this article.10159.2.  After December 31, 1943, any insurer may file with thecommissioner a written notice of its election to comply with theprovisions of this article as to any or all of its policies after aspecified date before January 1, 1948. After the filing of suchnotice, then upon such specified date, this article shall becomeoperative with respect to the policies specified in the notice andwhich are thereafter issued by such insurer. As to all of itspolicies with respect to which an insurer makes no such election, theoperative date of this article shall be January 1, 1948.10160.  Except as provided in Section 10165, no policy of lifeinsurance shall be delivered or issued for delivery in this stateunless it shall contain in substance the following provisions, orcorresponding provisions which are at least as favorable to thedefaulting or surrendering policyholder as are the minimumrequirements hereinafter specified and are essentially in compliancewith Section 10164.1 of this law: (a) That, in the event of default in any premium payment afterpremiums have been paid for at least one full year the insurer willgrant, upon proper request not later than 60 days after the due dateof the premium in default, a paid-up nonforfeiture benefit on a planstipulated in the policy, effective as of such due date, of suchamount as may be hereinafter specified. In lieu of this stipulatedpaid-up nonforfeiture benefit, the company may substitute, uponproper request not later than 60 days after the due date of thepremium in default, an actuarially equivalent alternative paid-upnonforfeiture benefit which provides a greater amount or longerperiod of death benefits or, if applicable, a greater amount orearlier payment of endowment benefits. (b) That, upon surrender of the policy within 60 days after thedue date of any premium payment in default after premiums have beenpaid for at least three full years in the case of ordinary insuranceor five full years in the case of industrial insurance, the insurerwill pay, in lieu of any paid-up nonforfeiture benefit, a cashsurrender value of such amount as may be hereinafter specified. (c) That a specified paid-up nonforfeiture benefit shall becomeeffective as specified in the policy unless the person entitled tomake such election elects another available option not later than 60days after the due date of the premium in default. (d) That, if the policy shall have become paid-up by completion ofall premium payments or if it is continued under any paid-upnonforfeiture benefit which became effective on or after the thirdpolicy anniversary in the case of ordinary insurance or the fifthpolicy anniversary in the case of industrial insurance, the insurerwill pay, upon surrender of the policy within 30 days after anypolicy anniversary, a cash surrender value of such amount as may behereinafter specified. (e) In the case of policies which cause, on a basis guaranteed inthe policy, unscheduled changes in benefits or premiums, or whichprovide an option for changes in benefits or premiums other than achange to a new policy, a statement of the mortality table, interestrate, and method used in calculating cash surrender values and thepaid-up nonforfeiture benefits available under the policy. In thecase of all other policies, a statement of the mortality table andinterest rate used in calculating the cash surrender values and thepaid-up nonforfeiture benefits available under the policy, togetherwith a schedule showing the cash surrender value, if any, and paid-upnonforfeiture benefit, if any, available under the policy on eachpolicy anniversary either during the first 20 policy years or duringthe term of the policy, whichever is shorter, such values andbenefits to be calculated upon the assumption that there are nodividends or paid-up additions credited to the policy and that thereis no indebtedness to the insurer on account of or secured by thepolicy. At the option of the insurer such schedule may also show suchvalues and benefits for any year or years beyond the twentiethpolicy year. (f) A brief and general statement of the method to be used incalculating the cash surrender value and the paid-up nonforfeiturebenefit available under the policy on any policy anniversary beyondthe last anniversary for which such values and benefits areconsecutively shown in the policy with an explanation of the mannerin which the cash surrender values and the paid-up nonforfeiturebenefits are altered by the existence of any paid-up additionscredited to the policy or any indebtedness to the insurer on accountof or secured by the policy. Any of the foregoing provisions or portions thereof not applicableby reason of the plan of insurance may, to the extent inapplicable,be omitted from the policy. The insurer shall reserve the right to defer the payment of anycash surrender value for a period of six months after demand thereforwith surrender of the policy.10161.  Any cash surrender value available under the policy in theevent of default in a premium payment due on any policy anniversary,whether or not required by Section 10160, shall be an amount not lessthan the excess, if any, of the present value, on such anniversary,of the future guaranteed benefits which would have been provided forby the policy, including any existing paid-up additions, if there hadbeen no default, over the sum of (a) the then present value of theadjusted premiums as defined in Sections 10163, 10163.1, and 10163.2corresponding to premiums which would have fallen due on and aftersuch anniversary, and (b) the amount of any indebtedness to thecompany on the policy. Provided, however, that for any policy issued on or after January1, 1989, which provides supplemental life insurance or annuitybenefits at the option of the insured and for an identifiableadditional premium by rider or supplemental policy provision, thecash surrender value referred to in the first paragraph of thissection shall be an amount not less than the sum of the cashsurrender value as defined in such paragraph for an otherwise similarpolicy issued at the same age without such rider or supplementalpolicy provision and the cash surrender value as defined in suchparagraph for a policy which provides only the benefits otherwiseprovided by such rider or supplemental policy provision. Provided, further, that for any family policy issued on or afterJanuary 1, 1989, which defines a primary insured and provides terminsurance on the life of the spouse of the primary insured expiringbefore the spouse's age of 71, the cash surrender value referred toin the first paragraph of this section shall be an amount not lessthan the sum of the cash surrender value as defined in such paragraphfor an otherwise similar policy issued at the same age without suchterm insurance on the life of the spouse and the cash surrender valueas defined in such paragraph for a policy which provides only thebenefits otherwise provided by such term insurance on the life of thespouse. Any cash surrender value available within 30 days after any policyanniversary under any policy paid up by completion of all premiumpayments or any policy continued under any paid-up nonforfeiturebenefit, whether or not required by Section 10160, shall be an amountnot less than the present value, on such anniversary, of the futureguaranteed benefits provided for by the policy, including anyexisting paid-up additions, decreased by any indebtedness to thecompany on the policy.10162.  Any paid-up nonforfeiture benefit available under the policyin the event of default in a premium payment due on any policyanniversary shall be such that its present value as of suchanniversary shall be at least equal to the cash surrender value thenprovided for by the policy or, if none is provided for, that cashsurrender value which would have been required by this article in theabsence of the condition that premiums shall have been paid for atleast a specified period.10163.  This section shall not apply to policies issued on or afterthe operative date of Section 10163.2 as defined therein. Except asprovided in the third paragraph of this section, the adjustedpremiums for any policy shall be calculated on an annual basis andshall be such uniform percentage of the respective premiums specifiedin the policy for each policy year, excluding extra premiums on asubstandard policy, that the present value, at the date of issue ofthe policy, of all such adjusted premiums shall be equal to the sumof (i) the then present value of the future guaranteed benefitsprovided for by the policy; (ii) two percent (2%) of the amount ofinsurance, if the insurance be uniform in amount, or of theequivalent uniform amount, as hereinafter defined, if the amount ofinsurance varies with duration of the policy; (iii) forty percent(40%) of the adjusted premium for the first policy year; (iv)twenty-five percent (25%) of either the adjusted premium for thefirst policy year or the adjusted premium for a whole life policy ofthe same uniform or equivalent uniform amount with uniform premiumsfor the whole of life issued at the same age for the same amount ofinsurance, whichever is less. In applying the percentages specifiedin (iii) and (iv) above, no adjusted premium shall be deemed toexceed four percent (4%) of the amount of insurance or uniform amountequivalent thereto. In the case of a policy providing an amount of insurance varyingwith duration of the policy, the equivalent uniform amount thereoffor the purpose of this section shall be deemed to be the uniformamount of insurance provided by an otherwise similar policy,containing the same endowment benefit or benefits, if any, issued atthe same age and for the same term, the amount of which does not varywith duration and the benefits under which have the same presentvalue at the date of issue as the benefits under the policy,provided, however, that in the case of a policy providing a varyingamount of insurance issued on the life of a child under age 10, theequivalent uniform amount may be computed as though the amount ofinsurance provided by the policy prior to the attainment of age 10were the amount provided by such policy at age 10. The adjusted premiums for any policy providing term insurancebenefits by rider or supplemental policy provision unless such terminsurance benefits are disregarded under Section 10164 shall be equalto (a) the adjusted premiums for an otherwise similar policy issuedat the same age without such term insurance benefits, increased,during the period for which premiums for such term insurance benefitsare payable, by (b) the adjusted premiums for such term insurance,the foregoing items (a) and (b) being calculated separately and asspecified in the first two paragraphs of this section. Except as otherwise provided in Section 10163.1, all adjustedpremiums and present values referred to in this article shall for allpolicies of ordinary insurance be calculated on the basis of theCommissioners 1941 Standard Ordinary Mortality Table; provided,however, that for any category of ordinary insurance issued on femalerisks, adjusted premiums and present values may be calculated, atthe option of the insurer, according to an age not more than threeyears younger than the actual age of the insured, and suchcalculations for all policies of industrial insurance shall be madeon the basis of the 1941 Standard Industrial Mortality Table. Allcalculations shall be made on the basis of the rate of interest, notexceeding three and one-half percent (3 1/2%) per annum, specified inthe policy for calculating cash surrender values and paid-upnonforfeiture benefits. However, in calculating the present value ofany paid-up term insurance with accompanying pure endowment, if any,offered as a nonforfeiture benefit, the rates of mortality assumedmay be not more than one hundred thirty percent (130%) of the ratesof mortality according to such applicable table; and for insuranceissued on a substandard basis, the calculation of any such adjustedpremiums and present values may be based on such other table ofmortality as may be specified by the insurer and approved by thecommissioner.10163.1.  (a) In the case of ordinary policies issued on or afterthe operative date of this subdivision as defined herein, alladjusted premiums and present values referred to in this articleshall be calculated on the basis of the Commissioners 1958 StandardOrdinary Mortality Table and the rate of interest specified in thepolicy for calculating cash surrender values and paid-upnonforfeiture benefits, provided that such rate of interest shall notexceed 3 1/2 percent per annum except that a rate of interest notexceeding 4 percent per annum may be used for all policies issued onor after January 1, 1970, and prior to January 1, 1980, and a rate ofinterest not exceeding 5 1/2 percent per annum may be used for allsuch policies issued on or after January 1, 1980, except that for anysingle premium whole life or endowment insurance policy a rate ofinterest not exceeding 6 1/2 percent per annum may be used; provided,that for any category of ordinary insurance issued on female risks,adjusted premiums and present values may be calculated according toan age not more than six years younger than the actual age of theinsured; provided, however, that in calculating the present value ofany paid-up term insurance with accompanying pure endowment, if any,offered as a nonforfeiture benefit, the rates of mortality assumedmay be not more than those shown in the Commissioners 1958 ExtendedTerm Insurance Table; provided further, that for insurance issued ona substandard basis, the calculation of any such adjusted premiumsand present values may be based on such other table of mortality asmay be specified by the company and approved by the commissioner. On or after January 1, 1961, any company may file with thecommissioner a written notice of its election to comply with theprovisions of this subdivision after a specified date before January1, 1966. After the filing of such notice, then upon such specifieddate (which shall be the operative date of this subdivision for suchcompany), this subdivision shall become operative with respect to theordinary policies thereafter issued by such company. If a companymakes no such election, the operative date of this subdivision forsuch company shall be January 1, 1966. (b) In the case of industrial policies issued on or after theoperative date of this subdivision as defined herein, all adjustedpremiums and present values referred to in this article shall becalculated on the basis of the Commissioners 1961 Standard IndustrialMortality Table and the rate of interest specified in the policy forcalculating cash surrender values and paid-up nonforfeiturebenefits, provided that such rate of interest shall not exceed 3 1/2percent per annum except that a rate of interest not exceeding 4percent per annum may be used for all such policies issued on orafter January 1, 1970, and prior to January 1, 1980, and a rate ofinterest not exceeding 5 1/2 percent per annum may be used for allsuch policies issued on or after January 1, 1980, except that for anysingle premium whole life or endowment insurance policy a rate ofinterest not exceeding 6 1/2 percent per annum may be used. Provided,however, that in calculating the present value of any paid-up terminsurance with accompanying pure endowment, if any, offered as anonforfeiture benefit, the rates of mortality assumed may be not morethan those shown in the Commissioners 1961 Industrial Extended TermInsurance Table. Provided, further, that for insurance issued on asubstandard basis, the calculation of any such adjusted premiums andpresent values may be based on such other table of mortality as maybe specified by the company and approved by the commissioner. After September 20, 1963, any company may file with thecommissioner a written notice of its election to comply with theprovisions of this subdivision after a specified date before January1, 1968. After the filing of such notice, then upon such specifieddate (which shall be the operative date of this subdivision for suchcompany), this subdivision shall become operative with respect to theindustrial policies thereafter issued by such company. If a companymakes no such election, the operative date of this subdivision forsuch company shall be January 1, 1968. This section shall not apply to ordinary or industrial policiesissued on or after the operative date of Section 10163.2.10163.2.  (a) This section shall apply to all policies issued on orafter the operative date of this section as defined herein. Except asprovided in subdivision (g), the adjusted premiums for any policyshall be calculated on an annual basis and shall be such uniformpercentage of the respective premiums specified in the policy foreach policy year, excluding amounts payable as extra premiums tocover impairments or special hazards and also excluding any uniformannual contract charge or policy fee specified in the policy in astatement of the method to be used in calculating the cash surrendervalues and paid-up nonforfeiture benefits, that the present value, atthe date of issue of the policy, of all adjusted premiums shall beequal to the sum of (1) the then present value of the futureguaranteed benefits provided for by the policy; (2) 1 percent ofeither the amount of insurance, if the insurance be uniform inamount, or the average amount of insurance at the beginning of eachof the first 10 policy years; and (3) 125 percent of thenonforfeiture net level premium as hereinafter defined. Provided,however, that in applying the percentage specified in (3) nononforfeiture net level premium shall be deemed to exceed 4 percentof either the amount of insurance, if the insurance be uniform inamount, or the average amount of insurance at the beginning of eachof the first 10 policy years. The date of issue of a policy for thepurpose of this section shall be the date as of which the rated ageof the insured is determined. (b) The nonforfeiture net level premium shall be equal to thepresent value, at the date of issue of the policy, of the guaranteedbenefits provided for by the policy, divided by the present value, atthe date of issue of the policy, of an annuity of 1 percent perannum payable on the date of issue of the policy and on eachanniversary of such policy on which a premium falls due. (c) In the case of policies which cause on a basis guaranteed inthe policy, unscheduled changes in benefits or premiums, or whichprovide an option for changes in benefits or premiums other than achange to a new policy, the adjusted premiums and present valuesshall initially be calculated on the assumption that future benefitsand premiums do not change from those stipulated at the date of issueof the policy. At the time of any such change in the benefits orpremiums the future adjusted premiums, nonforfeiture net levelpremiums and present values shall be recalculated on the assumptionthat future benefits and premiums do not change from those stipulatedby the policy immediately after the change. (d) Except as otherwise provided in subdivision (g), therecalculated future adjusted premiums for any such policy shall besuch uniform percentage of the respective future premiums specifiedin the policy for each policy year, excluding amounts payable asextra premiums to cover impairments and special hazards, and alsoexcluding any uniform annual contract charge or policy fee specifiedin the policy in a statement of the method to be used in calculatingthe cash surrender values and paid-up nonforfeiture benefits, thatthe present value, at the time of change to the newly definedbenefits or premiums, of all such future adjusted premiums shall beequal to the excess of (1) the sum of (A) the then present value ofthe then future guaranteed benefits provided for by the policy and(B) the additional expense allowance, if any, over (2) the then cashsurrender value, if any, or present value of any paid-upnonforfeiture benefit under the policy. (e) The additional expense allowance, at the time of the change tothe newly defined benefits or premiums, shall be the sum of (1) 1percent of the excess, if positive, of the average amount ofinsurance at the beginning of each of the first 10 policy yearssubsequent to the change over the average amount of insurance priorto the change at the beginning of each of the first 10 policy yearssubsequent to the time of the most recent previous change, or, ifthere has been no previous change, the date of issue of the policy;and (2) 125 percent of the increase, if positive, in thenonforfeiture net level premium. (f) The recalculated nonforfeiture net level premium shall beequal to the result obtained by dividing (1) by (2) where: (1) It equals the sum of: (A) The nonforfeiture net level premium applicable prior to thechange times the present value of an annuity of 1 percent per annumpayable on each anniversary of the policy on or subsequent to thedate of the change on which a premium would have fallen due had thechange not occurred, and (B) The present value of the increase in future guaranteedbenefits provided for by the policy, and (2) It equals the present value of an annuity of 1 percent perannum payable on each anniversary of the policy on or subsequent tothe date of change on which a premium falls due. (g) Notwithstanding any other provisions of this section to thecontrary, in the case of a policy issued on a substandard basis whichprovides reduced graded amounts of insurance so that, in each policyyear, such policy has the same tabular mortality cost as anotherwise similar policy issued on the standard basis which provideshigher uniform amounts of insurance, adjusted premiums and presentvalues for such substandard policy may be calculated as if it wereissued to provide such higher uniform amounts of insurance on thestandard basis. (h) All adjusted premiums and present values referred to in thisarticle shall for all policies of ordinary insurance be calculated onthe basis of (1) the Commissioners 1980 Standard Ordinary MortalityTable or (2) at the election of the company for any one or morespecified plans of life insurance, the Commissioners 1980 StandardOrdinary Mortality Table with Ten-Year Select Mortality Factors;shall for all policies of industrial insurance be calculated on thebasis of the Commissioners 1961 Standard Industrial Mortality Table;and shall for all policies issued in a particular calendar year becalculated on the basis of a rate of interest not exceeding thenonforfeiture interest rate as defined in this section for policiesissued in that calendar year. Provided, however, that: (1) At the option of the company, calculations for all policiesissued in a particular calendar year may be made on the basis of arate of interest not exceeding the nonforfeiture interest rate, asdefined in this section, for policies issued in the immediatelypreceding calendar year. (2) Under any paid-up nonforfeiture benefit, including any paid-updividend additions, any cash surrender value available, whether ornot required by Section 10160, shall be calculated on the basis ofthe mortality table and rate of interest used in determining theamount of such paid-up nonforfeiture benefit and paid-up dividendadditions, if any. (3) A company may calculate the amount of any guaranteed paid-upnonforfeiture benefit including any paid-up additions under thepolicy on the basis of an interest rate no lower than that specifiedin the policy for calculating cash surrender values. (4) In calculating the present value of any paid-up term insurancewith accompanying pure endowment, if any, offered as a nonforfeiturebenefit, the rates of mortality assumed may be not more than thoseshown in the Commissioners 1980 Extended Term Insurance Table forpolicies of ordinary insurance and not more than the Commissioners1961 Industrial Extended Term Insurance Table for policies ofindustrial insurance. (5) For insurance issued on a substandard basis, the calculationof any such adjusted premiums and present values may be based onappropriate modifications of the aforementioned tables. (6) Any ordinary mortality tables, adopted after 1980 by theNational Association of Insurance Commissioners, or its successor,that are approved by regulation promulgated or bulletin issued by thecommissioner for use in determining the minimum nonforfeiturestandard may be substituted for the Commissioners 1980 StandardOrdinary Mortality Table with or without Ten-Year Select MortalityFactors or for the Commissioners 1980 Extended Term Insurance Table. (7) Any industrial mortality tables, adopted after 1980 by theNational Association of Insurance Commissioners, or its successor,that are approved by regulation promulgated or bulletin issued by thecommissioner for use in determining the minimum nonforfeiturestandard may be substituted for the Commissioners 1961 StandardIndustrial Mortality Table or the Commissioners 1961 IndustrialExtended Term Insurance Table. (i) The nonforfeiture interest rate per annum for any policyissued in a particular calendar year shall be equal to 125 percent ofthe calendar year statutory valuation interest rate for such policyas defined in the Standard Valuation Law, rounded to the nearerone-quarter of 1 percent. (j) Notwithstanding any other provision in this code to thecontrary, any refiling of nonforfeiture values or their methods ofcomputation for any previously approved policy form which involvesonly a change in the interest rate or mortality table used to computenonforfeiture values shall not require refiling of any otherprovisions of that policy form. (k) After the effective date of this section, any company may filewith the commissioner a written notice of its election to complywith the provision of this section after a specified date beforeJanuary 1, 1989, which shall be the operative date of this sectionfor such company. If a company makes no such election, the operativedate of this section for such company shall be January 1, 1989.10163.3.  In the case of any plan of life insurance that providesfor future premium determination, the amounts of which are to bedetermined by the insurance company based on then estimates of futureexperience, or in the case of any plan of life insurance that is ofsuch a nature that minimum values cannot be determined by the methodsdescribed in Section 10160, 10161, 10162, 10163, 10163.1, or10163.2, then: (a) The commissioner must be satisfied that the benefits providedunder the plan are substantially as favorable to policyholders andinsureds as the minimum benefits otherwise required by Section 10160,10161, 10162, 10163, 10163.1, or 10163.2. (b) The commissioner must be satisfied that the benefits and thepattern of premiums of that plan are not such as to misleadprospective policyholders or insureds. (c) The cash surrender values and paid-up nonforfeiture benefitsprovided by the plan must not be less than the minimum values andbenefits required for the plan computed by a method consistent withthe principles of this Standard Nonforfeiture Law for Life Insurance,as determined by regulations promulgated by the commissioner.10163.35.  (a) Notwithstanding any other provision of law, the formof any policy, contract, or certificate providing life insurance thatis subject to this article shall be filed by the obligor under thepolicy, contract, or certificate with the commissioner before it ismarketed, issued, delivered, or used in this state. (b) Nothing contained in this section shall be construed asrequiring or providing for the prior approval by the commissioner offorms of individual life insurance policies, contracts, orcertificates prior to the time the forms are marketed, issued,delivered, or used in this state.10164.  Any cash surrender value and any paid-up nonforfeiturebenefit available under the policy in the event of default in apremium payment due at any time other than on the policy anniversary,shall be calculated with allowance for the lapse of time and thepayment of fractional premiums beyond the last preceding policyanniversary. All values referred to in Sections 10161, 10162, 10163,10163.1, and 10163.2 may be calculated upon the assumption that anydeath benefit is payable at the end of the policy year of death. Thenet value of any paid-up additions, other than paid-up termadditions, shall be not less than the amounts used to provide suchadditions. Notwithstanding the provisions of Section 10161,additional benefits payable (a) in the event of death ordismemberment by accident or accidental means, (b) in the event oftotal and permanent disability, (c) as reversionary annuity ordeferred reversionary annuity benefits, (d) as term insurancebenefits provided by a rider or supplemental policy provision towhich, if issued as a separate policy, this article would not apply,(e) as term insurance on the life of a child or on the lives ofchildren provided in a policy on the life of a parent of the child,if such term insurance expires before the child's age is 26, isuniform in amount after the child's age is one, and has not becomepaid up by reason of the death of a parent of the child, and (f) asother policy benefits additional to life insurance and endowmentbenefits, and premiums for all such additional benefits, shall bedisregarded in ascertaining cash surrender values and nonforfeiturebenefits required by this article, and no such additional benefitsshall be required to be included in any paid-up nonforfeiturebenefits.10164.1.  This section shall apply to all policies issued on orafter January 1, 1986. Any cash surrender value available under thepolicy in the event of default in a premium payment due on any policyanniversary shall be in an amount which does not differ by more thantwo-tenths of 1 percent of either the amount of insurance, if theinsurance be uniform in amount, or the average amount of insurance atthe beginning of each of the first 10 policy years, from the sum of(a) the greater of zero and the basic cash value hereinafterspecified and (b) the present value of any existing paid-up additionsless the amount of any indebtedness to the company under the policy. The basic cash value shall be equal to the present value, on suchanniversary, of the future guaranteed benefits which would have beenprovided for by the policy, excluding any existing paid-up additionsand before deduction of any indebtedness to the company, if there hadbeen no default, less the then present value of the nonforfeiturefactors, as hereinafter defined, corresponding to premiums whichwould have fallen due on and after such anniversary. Provided,however, that the effects on the basic cash value of supplementallife insurance or annuity benefits or of family coverage, asdescribed in Section 10161 or 10163 whichever is applicable, shall bethe same as are the effects specified in Section 10161 or 10163whichever is applicable, on the cash surrender values defined in thatsection. The nonforfeiture factor for each policy year shall be an amountequal to a percentage of the adjusted premium for the policy year, asdefined in Section 10163 or 10163.2 whichever is applicable. Exceptas is required by the next succeeding sentence of this paragraph,such percentage: (a) Shall be the same percentage for each policy year between thesecond policy anniversary and the later of (i) the fifth policyanniversary and (ii) the first policy anniversary at which there isavailable under the policy a cash surrender value in an amount,before including any paid-up additions and before deducting anyindebtedness, of at least two-tenths of 1 percent of either theamount of insurance, if the insurance be uniform in amount, or theaverage amount of insurance at the beginning of each of the first 10policy years. (b) Must be such that no percentage after the later of the twopolicy anniversaries specified in subdivision (a) may apply to fewerthan five consecutive policy years. Provided, that no basic cash value may be less than the valuewhich would be obtained if the adjusted premiums for the policy, asdefined in Section 10163 or 10163.2 whichever is applicable, weresubstituted for the nonforfeiture factors in the calculation of thebasic cash value. All adjusted premiums and present values referred to in thissection shall for a particular policy be calculated on the samemortality and interest bases as are used in demonstrating the policy's compliance with the other sections of this article. The cashsurrender values shall include any endowment benefits provided for bythe policy. Any cash surrender value available other than in the event ofdefault in a premium payment due on a policy anniversary, and theamount of any paid-up nonforfeiture benefit available under thepolicy in the event of default in a premium payment shall bedetermined in manners consistent with the manners specified fordetermining the analogous minimum amounts in Sections 10160, 10161,10162, 10163.2, and 10164. The amounts of any cash surrender valuesand of any paid-up nonforfeiture benefits granted in connection withadditional benefits such as those listed as items (a) through (f) inSection 10164 shall conform with the principles of this section.10164.2.  (a) For a policy of individual life insurance that issurrendered by the policy owner, the insurer shall return to theowner all moneys due in relation to that policy as expeditiously aspossible, but in no event more than 45 days from the date thesurrender is effective as provided in subdivision (b). However, thissection does not supersede the provisions of subdivision (f) ofSection 10160 empowering an insurer to defer payment of cashsurrender value for up to six months, to the extent that deferral isnecessary to assure the solvency of the insurer. (b) Unless a later date permitted by the policy (but not laterthan 45 days after the request is received) is requested by thepolicy owner, a surrender of a life insurance policy is effective onthe date the request is received, if the request is made to theinsurer or servicing agent authorized by the insurer in writing toreceive these requests on the insurer's behalf and contains theelements specified by the insurer in the contract. The insurer mayrequire the request be in writing. The insurer may require some orall of the following elements, but shall not require more: (1) A statement that makes it clear that the policy owner intendsto surrender, in whole or in part, the contract in question. (2) The policy number of the policy to be surrendered. (3) The name of the insured on the policy to be surrendered. (4) The signature of the owner of the policy and, if required bythe policy or by a legally binding document of which the insurer hasactual notice, the signature of a collateral assignee, irrevocablebeneficiary, or other person having an interest in the policy throughthe legally binding document. (5) Either the policy itself, or, in lieu of the policy, astatement that the policy has been lost or destroyed. (c) When the policy owner requests of an insurer or servicingagent information about surrendering a policy, the insurer orservicing agent shall provide, as expeditiously as possible, awritten notice setting forth either the requirements of this sectionor the insurer's requirements, if less. (d) A policy subject to this section issued on or after January 1,1997, shall either include language, which may be included byendorsement, or be accompanied by a notice setting forth the elementsnecessary to surrender the policy as required by this section or bythe insurer, if less. (e) Nothing in this section shall be construed to limit anexisting statutory right to return a policy for surrender, nor shallit limit a contractual provision that provides a greater right oroption to the policy owner. (f) For a written request, for purposes of this section, "received"means the first day that the written notice is delivered to theaddress of the insurer or servicing agent authorized by the insurerin writing to receive these requests on the insurer's behalf. Aninsurer or servicing agent shall maintain a procedure for ensuringthat requests for surrender are logged or stamped on the datereceived, and not on a later date due to the insurer's or servicingagent's internal routing or delivery procedures. If this procedure isnot maintained, it shall be conclusively presumed that a request wasreceived on the delivery date shown on an express, certified, orregistered mail receipt form of the United States Postal Service orby a commercial carrier, if delivered by commercial carrier, or theearlier of (1) two business days after the request was postmarked bythe United States Postal Service or (2) one business day before thedate stamped received by the insurer or servicing agent. For purposesof this subdivision, "business day" has the meaning set forth insubdivision (g) of Section 1215. Postmarks generated by postagemeters not located at an office of the United States Postal Serviceare to be disregarded. (g) This section does not alter a contractual provision governingcalculation of cash or surrender or other values. The effective dateestablished by subdivision (b) is intended to establish a datecertain on which a policyholder may rely in determining when the45-day period specified in subdivision (a) begins to run. Subdivision(b) is not intended to advance a date otherwise provided by contractthat is triggered by a request to surrender. An insurer may requestinformation in addition to that listed in subdivision (b). However,an insurer's request for additional information does not delay aneffective date established by a policyholder's compliance withsubdivision (b).10165.  This article shall not apply to any of the following: (a) Reinsurance. (b) Group insurance. (c) Pure endowment. (d) Annuity or reversionary annuity contract. (e) Term policy of uniform amount, which provides no guaranteednonforfeiture or endowment benefits, or renewal thereof, of 20 yearsor less expiring before age 71, for which uniform premiums arepayable during the entire term of the policy. (f) Term policy of decreasing amount, which provides no guaranteednonforfeiture or endowment benefits, on which each adjusted premium,calculated as specified in Sections 10163, 10163.1, and 10163.2, isless than the adjusted premium so calculated, on a term policy ofuniform amount, or renewal thereof, which provides no guaranteednonforfeiture or endowment benefits, issued at the same age and forthe same initial amount of insurance and for a term of 20 years orless expiring before age 71, for which uniform premiums are payableduring the entire term of the policy. (g) A policy, which provides no guaranteed nonforfeiture orendowment benefits, for which no cash surrender value, if any, orpresent value of any paid-up nonforfeiture benefit, at the beginningof any policy year, calculated as specifed in Sections 10161, 10162,10163, 10163.1, and 10163.2, exceeds 2 1/2 percent of the amount ofinsurance at the beginning of the same policy year, nor (h) A policy which shall be delivered outside this state throughan agent or other representative of the company issuing the policy. For purposes of determining the applicability of this article, theage at expiry for a joint-term life insurance policy shall be theage at expiry of the oldest life.10166.  No agreement between the insurer and the policyholder orapplicant for insurance contrary to this article shall be held towaive any of the provisions of this article.10167.  Any policy to which this article is applicable which doesnot contain a paid-up nonforfeiture benefit shall be construed asgranting nonparticipating paid-up term insurance as a nonforfeiturebenefit under subdivision (a) Section 10160.10167.5.  (a) Whenever a nonforfeiture benefit is implemented by alife insurer in connection with a defaulting policyowner, the insurershall provide a notice to the policyowner which explains that actionand refers the policyowner to the other available options, if any,under the provisions of the policy. (b) For purposes of this section, any notice to a policyholdershall be in writing and shall be mailed to the last known address ofthe policyowner shown on the records of the insurer. (c) This section does not apply to any of the following: (1) Reinsurance. (2) Group insurance. (3) Pure endowment. (4) Annuity or reversionary annuity contract. (5) Industrial insurance.