(a)
General. The
nonforfeiture values (for the age for which the form is filled in for a typical
plan of insurance) to be issued under a particular policy form should be
included. The Department has approved reference to the Commissioners' Standard
Non-Forfeiture Value Method in lieu of explanation of the method of calculating
cash values under the Standard Non-Forfeiture Law, section 410A of the act
(40
P.S. §
510.1), and insurers using the
method may refer thereto in the forms submitted. If no nonforfeiture values
develop, the submission letter should so state.
(b)
Recommended statement in policy.
It is suggested that a provision be included in the policy
substantially similar to the following:
The cash values and nonforfeiture benefits available
under this policy are equal to or greater than the minimum required by statute
of the state in which this policy is delivered.
(c)
Automatic premium loan.
An automatic premium loan provision should be separately captioned and not
included under or with the nonforfeiture provisions.
(d)
Substandard plans.
Substandard plans in which the extended insurance option is not available shall
indicate by the proper text in the policy and endorsements that such option and
values are not applicable. Tables which contain headings and spaces for the
insertion of extended insurance values shall be printed, overprinted or stamped
in a prominent manner to indicate that, in cases in which the values are not
granted, the values are not applicable.
(e)
Nonforfeiture benefit
limitations. Nonforfeiture benefit limitations shall conform with the
following:
(1) Insurers may offer extended
term insurance or paid-up insurance as a nonforfeiture benefit. These benefits
need not include supplementary built-in insurance benefits provided for while
the policy is in force, nor need they include benefits provided by riders
attached thereto.
(2) Where the
nonforfeiture benefits of a policy do not apply to supplementary benefits which
are built into the policy or attached by riders, the policyholder shall be so
notified. Notification shall be in the following or comparable form:
Any insurance continued under these nonforfeiture
provisions shall not include benefits which supplement the basic life insurance
benefit, whether these supplemental benefits are mentioned in the policy itself
or provided by a rider attached to the policy, unless specifically provided
otherwise where the supplemental benefit is described.
(3) The provision set forth in paragraph (2)
should be included in the first section of the policy which describes
nonforfeiture values.
(i) If the provision is
located elsewhere in the policy, it shall be in a place where it is equally or
more visible.
(ii) Where
supplemental benefits are described in a rider to the policy and not in the
policy itself, notification of nonapplicability of the benefits as a
nonforfeiture value may be made in the rider describing the benefit. The notice
shall be prominently located.
(iii)
Policy and rider forms will be disapproved which do not include the provision
in a location acceptable to the Department.
(4) The provision set forth in paragraph (2)
shall be required in life insurance policies or riders issued 90 days after the
effective date of this subsection. Compliance may be made by endorsement to
policies or riders issued 90 days after the effective date but before January
1, 1976. After January 1, 1976, life insurance forms shall incorporate the
provision into the policy or rider itself.
