31 Pa. Code § 83.3 - Disclosure statement
(a)
Required written disclosure. A life insurance agent, broker or
insurer soliciting the type of business to which this subchapter applies shall
provide a prospective purchaser with a written disclosure statement clearly
labeled as such. An acceptable disclosure statement is attached as Appendix A.
If the Appendix A disclosure statement will be used, a letter to that effect,
prior to use, is adequate notification to the Department. However, if a
statement different than Appendix A will be used, the statement shall be filed
with the Department for review prior to use. If an insurer desires to use an
advertisement as its disclosure statement, the portion of the advertisement
containing the disclosure statement shall be filed for review prior to use. A
disclosure statement shall be a document which shall describe the purpose and
importance of the disclosure and describe the significant elements of the
policy and riders being offered.
(1) A
statement that the disclosure is for the insured's protection, provides basic
information about the cost and coverage of the insurance and should be read
carefully.
(2) A statement that the
disclosure statement may not be considered as an offer to contract or as
altering or modifying any policy or rider that might be issued.
(3) The name, age and sex of the proposed
insured, to the extent that each is known or can reasonably become known to the
company, broker or agent at the time of presentation.
(4) Source of insurance, including the
following:
(i) If applicable, the name of the
agent or broker, home address or agency address and the home or agency
telephone number of the insurance agent or broker making the
solicitation.
(ii) The name and
home address (city and state) of the insurer to whom applications will be made
and a mailing address of the insurer's home, executive or administrative office
to which correspondence should be addressed.
(5) Information about the basic policy, rider
or supplemental benefit built into the policy, such as descriptive title, as
"whole life, 20 year decreasing term, endowment at age 65," and the
like.
(6) Amount of coverage and
benefits offered.
(i) Separately for each
basic policy, rider and supplemental benefit built into the policy.
(A) The face amount of coverage; if not
applicable, a description of the coverage.
(B) If the face amount of coverage changes
(other than through the exercise of dividend options), an explanation as to
what changes will occur and when, as "coverage reduces $100 per month till age
65 when the coverage expires."
(ii) Retirement income. If the policy is one
primarily designated to pay a guaranteed income, the monthly income payable for
life with a ten-year period certain at the appropriate age.
(iii) Cash surrender value.
(A) In policies which develop such values,
the applicable amount of cash surrender value per $1,000 or face amount at the
end of 5, 10 and 20 policy years and at age 65.
(B) If a loan option is available, the annual
percentage loan interest charge.
(7) Premiums.
(i) Separately for each basic policy and
rider:
(A) Annual premium; if not known,
premium for mode quoted to prospect.
(B) If the premium quoted in clause (A)
changes other than by the exercise of an option contained in the policy such as
a right of renewal of a term life insurance policy or the exercise of a
dividend option:
(I) If one premium changes,
the ultimate premium and the effective time.
(II) If more than one premium changes, two
representative premiums and the ultimate premium and the effective time of each
such change; or an explanation as to what changes will occur, as "Amount of
premium increases 3% each year" and the ultimate premium and the effective
time.
(C) If the policy
contains supplemental built-in benefits, a statement that the cost for such
benefits is included in the premium for the policy.
(ii) Total initial annual premium for the
policy and rider. If not known, total initial premium for the policy and rider
for the payment mode quoted to prospect.
(8) Dividends payable.
(i) If the company chooses to show
illustrations, a statement that illustrated dividends are not a guarantee of
what future dividends will be.
(ii)
If a payment of a dividend is contingent upon the payment of the next premium
due, a statement to this effect.
(iii) Dividend illustrations used shall be
for policy years 10 and 20 per $1,000 or face amount. A statement that the
dividend illustrations will be based on current interest, mortality, and
expense experience of the company as reflected in the dividends currently paid
and will pertain to the policy or rider being solicited.
(9) Surrender comparison index for policies.
(i) A disclosure that a surrender comparison
index will be provided upon delivery of the policy or earlier if requested. If
requested earlier, the index disclosure must be provided as soon as reasonably
possible. This requirement is not applicable to the following kinds of
insurance:
(A) Annuities.
(B) Group life insurance.
(C) Credit life insurance.
(D) Life insurance of less than
$5,000.
(E) Life insurance on
substandard risks.
(F) Life
insurance issued in connection with qualified funded pension plans and
qualified retirement plans.
(G)
Life insurance issued as a result of a contractual policy change or conversion
provision.
(H) Life insurance where
the cost is borne in whole or in part by the employer of the insured.
(I) Policies having a varying face amount
(resulting from other than the application of dividends).
(J) Variable life insurance.
(K) Family policies.
(L) Term policies.
(M) Riders.
(ii) A provision for the election of earlier
delivery.
(iii) A brief explanation
of what the surrender comparison index is.
(10) Upon request, the company, fraternal
benefit society, or agent, if applicable, will furnish the prospective insured
with additional information about the insurance described.
(b)
Appendix A. Italicized
material in the Appendix A disclosure statement has been included for
explanatory purposes only and shall not appear in copies of Appendix A used by
insurers. Insurer's Appendix A form should only indicate applicable terminology
or designation in lieu of italicized material.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.