Mich. Admin. Code R. 500.859 - Separate accounts; material change in investment policy
Rule 19.
(1) The
investment policies of a separate account for variable life insurance operated
by insurers authorized under
R 500.843 shall not be changed
without first filing such change with the insurance commissioner.
(2) A material change in the investment
policy of a separate account operated by a domestic insurer or an alien insurer
entering the United States through this state and filed under
R 500.843(c)(iii)
shall not be made without first filing such change with the commissioner not
less than 60 days before the effective date of the change.
(3) A material change in the investment
policy of a separate account operated by a foreign insurer or an alien insurer
not entering the United States through this state, pursuant to the section of
the insurance law of the insurer's state of domicile which corresponds to
R 500.843(c)(iii),
shall not be made without first filing such change with the commissioner not
less than 60 days before the effective date of the change.
(4) Any change filed pursuant to this rule
shall be effective 60 days after the date it was filed with the commissioner,
unless the commissioner notifies the insurer before the end of such 60-day
period of his or her disapproval of the proposed change. At any time the
commissioner may, after notice and public hearing, disapprove any change that
has become effective pursuant to this rule if he or she determines that the
change would be detrimental to the interests of the policyholders participating
in such separate accounts.
(5) If
any policyholder objects to a proposed material change in the investment policy
of a separate account and the change becomes effective, the objecting
policyholder shall be given the option of converting, within 60 days after the
effective date of the change or the receipt of a notice of the options
available, whichever is later, without evidence of insurability, under 1 of the
following options, to a fixed benefit life insurance policy issued by the
insurer or an affiliate:
(a) If the policy is
a scheduled premium policy, as defined by
R
500.841 and is in force on a premium paying basis, an
insurer shall offer either or both of the following options:
(i) A conversion as of the original issue age
to a substantially comparable form of general account life insurance, based on
the insurer's premium rates for a general account life insurance policy at the
original issue age, for an amount of insurance not exceeding the death benefit
of the variable life insurance policy on the date of conversion. If the cash
value of the variable life insurance policy exceeds the cash value of the
general account life insurance policy, the difference shall be paid to the
policyholder. If the cash value of the general account life insurance policy
exceeds the cash value of the variable life insurance policy, the difference
shall be paid by the policyholder.
(ii) Conversion as of the attained age to a
substantially comparable form of general account life insurance for an amount
of insurance not exceeding the excess of the death benefit of the variable life
insurance policy on the date of conversion over either of the following:
(A) Its net cash surrender value on the date
of conversion if the withdrawing policyholder elects to surrender the variable
life policy for its net cash surrender value.
(B) The death benefit payable under any
paid-up insurance option if the withdrawing policyholder elects such
nonforfeiture option under the variable life policy.
(b) If the policy is in force as
paid-up variable life insurance, then conversion shall be to a substantially
comparable paid-up general account life insurance policy for an amount of
insurance not exceeding the death benefit of the variable life insurance policy
on the date of conversion.
(c) If
the policy is a flexible premium policy, as defined by
R
500.841 and is in force, an insurer shall offer a
conversion to a substantially comparable flexible premium general account life
insurance policy for an amount of insurance not exceeding the death benefit of
the variable life insurance policy on the date of conversion. If the cash value
of the variable life insurance policy exceeds the cash value of the general
account life insurance policy, the difference shall be paid to the
policyholder. If the cash value of the general account life insurance policy
exceeds the cash value of the variable life insurance policy, the difference
shall be paid by the policyholder.
Notes
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