376.704. For the purposes of sections 376.700 to 376.714, the followingdefinitions shall apply:
(1) "Buyer's guide", a document which contains, and is limited to, thelanguage contained in section 376.714 or language approved by the director ofthe department of insurance, financial institutions and professionalregistration;
(2) "Cash dividend", the current illustrated dividend which can beapplied toward payment of the gross premium;
(3) "Equivalent level annual dividend", a calculation made by applyingthe following steps:
(a) Accumulate the annual cash dividends at five percent interest, orother interest rate approved by the director of the department of insurance,financial institutions and professional registration, compounded annually tothe end of the tenth and twentieth policy years;
(b) Divide each accumulation of (a) by an interest factor that convertsit into one equivalent level annual amount that, if paid at the beginning ofeach year, would accrue to the values in (a) over the respective periodsstipulated in (a). If the period is ten years, the factor is 13.207 and ifthe period is twenty years, the factor is 34.719;
(c) Divide the results of (b) by the number of thousands of theequivalent level death benefit to arrive at the equivalent level annualdividend;
(4) "Equivalent level death benefit", an amount calculated as follows:
(a) Accumulate the guaranteed amount payable upon death, regardless ofthe cause of death, at the beginning of each policy year for ten and twentyyears at five percent interest, or other interest rate approved by thedirector of the department of insurance, financial institutions andprofessional registration, compounded annually to the end of the tenth andtwentieth policy years respectively;
(b) Divide each accumulation of (a) by an interest factor that convertsit into one equivalent level annual amount that, if paid at the beginning ofeach year, would accrue to the value in (a) over the respective periodsstipulated in (a). If the period is ten years, the factor is 13.207 and ifthe period is twenty years, the factor is 34.719.
(5) "Generic name", a short title which is descriptive of the premiumand benefit patterns of a policy or a rider;
(6) "Life insurance cost indexes":
(a) "Life insurance surrender cost index", a calculation made byapplying the following steps:
a. Determine the guaranteed cash surrender value, if any, available atthe end of the tenth and twentieth policy years;
b. For participating policies, add the terminal dividend payable uponsurrender, if any, to the accumulation of the annual cash dividends at fivepercent interest, or other interest rate approved by the director of thedepartment of insurance, financial institutions and professional registration,compounded annually to the end of the period selected and add this sum to theamount determined in step a;
c. Divide the result of step b. (step a. for guaranteed-cost policies)by an interest factor that converts it into an equivalent level annual amountthat, if paid at the beginning of each year, would accrue to the value in stepb. (step a. for guaranteed-cost policies) over the respective periodsstipulated in step a. If the period is ten years, the factor is 13.207 and ifthe period is twenty years, the factor is 34.719;
d. Determine the equivalent level premium by accumulating each annualpremium payable for the basic policy or rider at five percent interest, orother interest rate approved by the director of the department of insurance,financial institutions and professional registration, compounded annually tothe end of the period stipulated in step a. and dividing the result by therespective factors stated in step c. (This amount is the annual premiumpayable for a level premium plan.);
e. Subtract the result of step c. from step d.;
f. Divide the result of step e. by the number of thousands of theequivalent level death benefit to arrive at the life insurance surrender costindex;
(b) "Life insurance net payment cost index", a calculation made in thesame manner as the comparable life insurance cost index except that the cashsurrender value and any terminal dividend are set at zero;
(7) "Policy summary", for the purposes of sections 376.700 to 376.714,policy summary means a written statement describing the elements of the policyincluding but not limited to:
(a) A prominently placed title as follows: STATEMENT OF POLICY COST ANDBENEFIT INFORMATION;
(b) The name and address of the insurance agent, or, if no agent isinvolved, a statement of the procedure to be followed in order to receiveresponses to inquiries regarding the policy summary;
(c) The full name and home office or administrative office address ofthe company in which the life insurance policy is to be or has been written;
(d) The generic name of the basic policy and each rider;
(e) The following amounts, where applicable, for the first five policyyears and representative policy years thereafter sufficient to clearlyillustrate the premium and benefit patterns, including, but not necessarilylimited to, the years for which life insurance cost indexes are displayed andat least one age from sixty through sixty-five or maturity whichever isearlier:
a. The annual premium for the basic policy;
b. The annual premium for each optional rider;
c. Guaranteed amount payable upon death, at the beginning of the policyyear regardless of the cause of death other than suicide, or otherspecifically enumerated exclusions, which is provided by the basic policy andeach optional rider, with benefits provided under the basic policy and eachrider shown separately;
d. Total guaranteed cash surrender values at the end of the year withvalues shown separately for the basic policy and each rider;
e. Cash dividends payable at the end of the year with values shownseparately for the basic policy and each rider (Dividends need not bedisplayed beyond the twentieth policy year.);
f. Guaranteed endowment amounts payable under the policy which are notincluded under guaranteed cash surrender values above;
(f) The effective policy loan annual percentage interest rate, if thepolicy contains this provision, specifying whether this rate is applied inadvance or in arrears. If the policy loan interest rate is variable, thepolicy summary includes the maximum annual percentage rate;
(g) Life insurance cost indexes for ten and twenty years but in no casebeyond the premium paying period. Separate indexes are displayed for thebasic policy and for each optional term life insurance rider. Such indexesneed not be included for optional riders which are limited to benefits such asaccidental death benefits, disability waiver of premium, preliminary term lifeinsurance coverage of less than twelve months and guaranteed insurabilitybenefits nor for basic policies or optional riders covering more than onelife;
(h) The equivalent level annual dividend, in the case of participatingpolicies and participating optional term life insurance riders, under the samecircumstances and for the same durations at which life insurance cost indexesare displayed;
(i) A policy summary which includes dividends shall also include astatement that dividends are based on the company's current dividend scale andare not guaranteed, in addition to a statement in close proximity to theequivalent level annual dividend as follows: An explanation of the intendeduse of the equivalent level annual dividend is included in the life insurancebuyer's guide;
(j) A statement in close proximity to the life insurance cost indexes asfollows: An explanation of the intended use of these indexes is provided inthe life insurance buyer's guide;
(k) The date on which the policy summary is prepared. The policysummary must consist of a separate document. All information required to bedisclosed must be set out in such a manner as to not minimize or render anyportion thereof obscure. Any amounts which remain level for two or more yearsof the policy may be represented by a single number if it is clearly indicatedwhat amounts are applicable for each policy year. Amounts in item (e) of thissection shall be listed in total, not on a per thousand nor per unit basis.If more than one insured is covered under one policy or rider, guaranteeddeath benefits shall be displayed separately for each insured or for eachclass of insureds if death benefits do not differ within the class. Zeroamounts shall be displayed as zero and shall not be displayed as a blankspace.
376.704. For the purposes of sections 376.700 to 376.714, the followingdefinitions shall apply:
(1) "Buyer's guide", a document which contains, and is limited to, thelanguage contained in section 376.714 or language approved by the director ofthe department of insurance, financial institutions and professionalregistration;
(2) "Cash dividend", the current illustrated dividend which can beapplied toward payment of the gross premium;
(3) "Equivalent level annual dividend", a calculation made by applyingthe following steps:
(a) Accumulate the annual cash dividends at five percent interest, orother interest rate approved by the director of the department of insurance,financial institutions and professional registration, compounded annually tothe end of the tenth and twentieth policy years;
(b) Divide each accumulation of (a) by an interest factor that convertsit into one equivalent level annual amount that, if paid at the beginning ofeach year, would accrue to the values in (a) over the respective periodsstipulated in (a). If the period is ten years, the factor is 13.207 and ifthe period is twenty years, the factor is 34.719;
(c) Divide the results of (b) by the number of thousands of theequivalent level death benefit to arrive at the equivalent level annualdividend;
(4) "Equivalent level death benefit", an amount calculated as follows:
(a) Accumulate the guaranteed amount payable upon death, regardless ofthe cause of death, at the beginning of each policy year for ten and twentyyears at five percent interest, or other interest rate approved by thedirector of the department of insurance, financial institutions andprofessional registration, compounded annually to the end of the tenth andtwentieth policy years respectively;
(b) Divide each accumulation of (a) by an interest factor that convertsit into one equivalent level annual amount that, if paid at the beginning ofeach year, would accrue to the value in (a) over the respective periodsstipulated in (a). If the period is ten years, the factor is 13.207 and ifthe period is twenty years, the factor is 34.719.
(5) "Generic name", a short title which is descriptive of the premiumand benefit patterns of a policy or a rider;
(6) "Life insurance cost indexes":
(a) "Life insurance surrender cost index", a calculation made byapplying the following steps:
a. Determine the guaranteed cash surrender value, if any, available atthe end of the tenth and twentieth policy years;
b. For participating policies, add the terminal dividend payable uponsurrender, if any, to the accumulation of the annual cash dividends at fivepercent interest, or other interest rate approved by the director of thedepartment of insurance, financial institutions and professional registration,compounded annually to the end of the period selected and add this sum to theamount determined in step a;
c. Divide the result of step b. (step a. for guaranteed-cost policies)by an interest factor that converts it into an equivalent level annual amountthat, if paid at the beginning of each year, would accrue to the value in stepb. (step a. for guaranteed-cost policies) over the respective periodsstipulated in step a. If the period is ten years, the factor is 13.207 and ifthe period is twenty years, the factor is 34.719;
d. Determine the equivalent level premium by accumulating each annualpremium payable for the basic policy or rider at five percent interest, orother interest rate approved by the director of the department of insurance,financial institutions and professional registration, compounded annually tothe end of the period stipulated in step a. and dividing the result by therespective factors stated in step c. (This amount is the annual premiumpayable for a level premium plan.);
e. Subtract the result of step c. from step d.;
f. Divide the result of step e. by the number of thousands of theequivalent level death benefit to arrive at the life insurance surrender costindex;
(b) "Life insurance net payment cost index", a calculation made in thesame manner as the comparable life insurance cost index except that the cashsurrender value and any terminal dividend are set at zero;
(7) "Policy summary", for the purposes of sections 376.700 to 376.714,policy summary means a written statement describing the elements of the policyincluding but not limited to:
(a) A prominently placed title as follows: STATEMENT OF POLICY COST ANDBENEFIT INFORMATION;
(b) The name and address of the insurance agent, or, if no agent isinvolved, a statement of the procedure to be followed in order to receiveresponses to inquiries regarding the policy summary;
(c) The full name and home office or administrative office address ofthe company in which the life insurance policy is to be or has been written;
(d) The generic name of the basic policy and each rider;
(e) The following amounts, where applicable, for the first five policyyears and representative policy years thereafter sufficient to clearlyillustrate the premium and benefit patterns, including, but not necessarilylimited to, the years for which life insurance cost indexes are displayed andat least one age from sixty through sixty-five or maturity whichever isearlier:
a. The annual premium for the basic policy;
b. The annual premium for each optional rider;
c. Guaranteed amount payable upon death, at the beginning of the policyyear regardless of the cause of death other than suicide, or otherspecifically enumerated exclusions, which is provided by the basic policy andeach optional rider, with benefits provided under the basic policy and eachrider shown separately;
d. Total guaranteed cash surrender values at the end of the year withvalues shown separately for the basic policy and each rider;
e. Cash dividends payable at the end of the year with values shownseparately for the basic policy and each rider (Dividends need not bedisplayed beyond the twentieth policy year.);
f. Guaranteed endowment amounts payable under the policy which are notincluded under guaranteed cash surrender values above;
(f) The effective policy loan annual percentage interest rate, if thepolicy contains this provision, specifying whether this rate is applied inadvance or in arrears. If the policy loan interest rate is variable, thepolicy summary includes the maximum annual percentage rate;
(g) Life insurance cost indexes for ten and twenty years but in no casebeyond the premium paying period. Separate indexes are displayed for thebasic policy and for each optional term life insurance rider. Such indexesneed not be included for optional riders which are limited to benefits such asaccidental death benefits, disability waiver of premium, preliminary term lifeinsurance coverage of less than twelve months and guaranteed insurabilitybenefits nor for basic policies or optional riders covering more than onelife;
(h) The equivalent level annual dividend, in the case of participatingpolicies and participating optional term life insurance riders, under the samecircumstances and for the same durations at which life insurance cost indexesare displayed;
(i) A policy summary which includes dividends shall also include astatement that dividends are based on the company's current dividend scale andare not guaranteed, in addition to a statement in close proximity to theequivalent level annual dividend as follows: An explanation of the intendeduse of the equivalent level annual dividend is included in the life insurancebuyer's guide;
(j) A statement in close proximity to the life insurance cost indexes asfollows: An explanation of the intended use of these indexes is provided inthe life insurance buyer's guide;
(k) The date on which the policy summary is prepared. The policysummary must consist of a separate document. All information required to bedisclosed must be set out in such a manner as to not minimize or render anyportion thereof obscure. Any amounts which remain level for two or more yearsof the policy may be represented by a single number if it is clearly indicatedwhat amounts are applicable for each policy year. Amounts in item (e) of thissection shall be listed in total, not on a per thousand nor per unit basis.If more than one insured is covered under one policy or rider, guaranteeddeath benefits shall be displayed separately for each insured or for eachclass of insureds if death benefits do not differ within the class. Zeroamounts shall be displayed as zero and shall not be displayed as a blankspace.
376.704. For the purposes of sections 376.700 to 376.714, the followingdefinitions shall apply:
(1) "Buyer's guide", a document which contains, and is limited to, thelanguage contained in section 376.714 or language approved by the director ofthe department of insurance, financial institutions and professionalregistration;
(2) "Cash dividend", the current illustrated dividend which can beapplied toward payment of the gross premium;
(3) "Equivalent level annual dividend", a calculation made by applyingthe following steps:
(a) Accumulate the annual cash dividends at five percent interest, orother interest rate approved by the director of the department of insurance,financial institutions and professional registration, compounded annually tothe end of the tenth and twentieth policy years;
(b) Divide each accumulation of (a) by an interest factor that convertsit into one equivalent level annual amount that, if paid at the beginning ofeach year, would accrue to the values in (a) over the respective periodsstipulated in (a). If the period is ten years, the factor is 13.207 and ifthe period is twenty years, the factor is 34.719;
(c) Divide the results of (b) by the number of thousands of theequivalent level death benefit to arrive at the equivalent level annualdividend;
(4) "Equivalent level death benefit", an amount calculated as follows:
(a) Accumulate the guaranteed amount payable upon death, regardless ofthe cause of death, at the beginning of each policy year for ten and twentyyears at five percent interest, or other interest rate approved by thedirector of the department of insurance, financial institutions andprofessional registration, compounded annually to the end of the tenth andtwentieth policy years respectively;
(b) Divide each accumulation of (a) by an interest factor that convertsit into one equivalent level annual amount that, if paid at the beginning ofeach year, would accrue to the value in (a) over the respective periodsstipulated in (a). If the period is ten years, the factor is 13.207 and ifthe period is twenty years, the factor is 34.719.
(5) "Generic name", a short title which is descriptive of the premiumand benefit patterns of a policy or a rider;
(6) "Life insurance cost indexes":
(a) "Life insurance surrender cost index", a calculation made byapplying the following steps:
a. Determine the guaranteed cash surrender value, if any, available atthe end of the tenth and twentieth policy years;
b. For participating policies, add the terminal dividend payable uponsurrender, if any, to the accumulation of the annual cash dividends at fivepercent interest, or other interest rate approved by the director of thedepartment of insurance, financial institutions and professional registration,compounded annually to the end of the period selected and add this sum to theamount determined in step a;
c. Divide the result of step b. (step a. for guaranteed-cost policies)by an interest factor that converts it into an equivalent level annual amountthat, if paid at the beginning of each year, would accrue to the value in stepb. (step a. for guaranteed-cost policies) over the respective periodsstipulated in step a. If the period is ten years, the factor is 13.207 and ifthe period is twenty years, the factor is 34.719;
d. Determine the equivalent level premium by accumulating each annualpremium payable for the basic policy or rider at five percent interest, orother interest rate approved by the director of the department of insurance,financial institutions and professional registration, compounded annually tothe end of the period stipulated in step a. and dividing the result by therespective factors stated in step c. (This amount is the annual premiumpayable for a level premium plan.);
e. Subtract the result of step c. from step d.;
f. Divide the result of step e. by the number of thousands of theequivalent level death benefit to arrive at the life insurance surrender costindex;
(b) "Life insurance net payment cost index", a calculation made in thesame manner as the comparable life insurance cost index except that the cashsurrender value and any terminal dividend are set at zero;
(7) "Policy summary", for the purposes of sections 376.700 to 376.714,policy summary means a written statement describing the elements of the policyincluding but not limited to:
(a) A prominently placed title as follows: STATEMENT OF POLICY COST ANDBENEFIT INFORMATION;
(b) The name and address of the insurance agent, or, if no agent isinvolved, a statement of the procedure to be followed in order to receiveresponses to inquiries regarding the policy summary;
(c) The full name and home office or administrative office address ofthe company in which the life insurance policy is to be or has been written;
(d) The generic name of the basic policy and each rider;
(e) The following amounts, where applicable, for the first five policyyears and representative policy years thereafter sufficient to clearlyillustrate the premium and benefit patterns, including, but not necessarilylimited to, the years for which life insurance cost indexes are displayed andat least one age from sixty through sixty-five or maturity whichever isearlier:
a. The annual premium for the basic policy;
b. The annual premium for each optional rider;
c. Guaranteed amount payable upon death, at the beginning of the policyyear regardless of the cause of death other than suicide, or otherspecifically enumerated exclusions, which is provided by the basic policy andeach optional rider, with benefits provided under the basic policy and eachrider shown separately;
d. Total guaranteed cash surrender values at the end of the year withvalues shown separately for the basic policy and each rider;
e. Cash dividends payable at the end of the year with values shownseparately for the basic policy and each rider (Dividends need not bedisplayed beyond the twentieth policy year.);
f. Guaranteed endowment amounts payable under the policy which are notincluded under guaranteed cash surrender values above;
(f) The effective policy loan annual percentage interest rate, if thepolicy contains this provision, specifying whether this rate is applied inadvance or in arrears. If the policy loan interest rate is variable, thepolicy summary includes the maximum annual percentage rate;
(g) Life insurance cost indexes for ten and twenty years but in no casebeyond the premium paying period. Separate indexes are displayed for thebasic policy and for each optional term life insurance rider. Such indexesneed not be included for optional riders which are limited to benefits such asaccidental death benefits, disability waiver of premium, preliminary term lifeinsurance coverage of less than twelve months and guaranteed insurabilitybenefits nor for basic policies or optional riders covering more than onelife;
(h) The equivalent level annual dividend, in the case of participatingpolicies and participating optional term life insurance riders, under the samecircumstances and for the same durations at which life insurance cost indexesare displayed;
(i) A policy summary which includes dividends shall also include astatement that dividends are based on the company's current dividend scale andare not guaranteed, in addition to a statement in close proximity to theequivalent level annual dividend as follows: An explanation of the intendeduse of the equivalent level annual dividend is included in the life insurancebuyer's guide;
(j) A statement in close proximity to the life insurance cost indexes asfollows: An explanation of the intended use of these indexes is provided inthe life insurance buyer's guide;
(k) The date on which the policy summary is prepared. The policysummary must consist of a separate document. All information required to bedisclosed must be set out in such a manner as to not minimize or render anyportion thereof obscure. Any amounts which remain level for two or more yearsof the policy may be represented by a single number if it is clearly indicatedwhat amounts are applicable for each policy year. Amounts in item (e) of thissection shall be listed in total, not on a per thousand nor per unit basis.If more than one insured is covered under one policy or rider, guaranteeddeath benefits shall be displayed separately for each insured or for eachclass of insureds if death benefits do not differ within the class. Zeroamounts shall be displayed as zero and shall not be displayed as a blankspace.
