Utah Admin. Code R590-177-5 - General Rules and Prohibitions

(1) An illustration used in the sale of a life insurance policy shall comply with this rule, be clearly labeled "life insurance illustration," and contain the following information:

(a) the name and address of the insurer;

(b) the name and business address of the producer or insurer's authorized representative, if any;

(c) the name, age, and sex of the proposed insured, except where a composite illustration is permitted under this rule;

(d) the underwriting or rating classification on which the illustration is based;

(e) the generic name of the policy, the company product name, if different, and form number;

(f) the initial death benefit; and

(g) the dividend option election or application of non-guaranteed elements, if applicable.

(2) When using an illustration in the sale of a life insurance policy, an insurer or its producer or other authorized representative may not:

(a) represent the policy as anything other than a life insurance policy;

(b) use or describe a non-guaranteed element in a manner that is misleading or has the capacity or tendency to mislead;

(c) state or imply that the payment or amount of a non-guaranteed element is guaranteed;

(d) use an illustration that does not comply with the requirements of this rule;

(e) use an illustration that at any policy duration depicts policy performance more favorable to the policy owner than that produced by the illustrated scale of the insurer whose policy is being illustrated;

(f) provide an applicant with an incomplete illustration;

(g) represent or imply that a premium payment will not be required for each year of the policy maintain the illustrated death benefit, unless that is the fact;

(h) use the term "vanish" or "vanishing premium," or a similar term that implies the policy becomes paid up, to describe a plan for using a non-guaranteed element to pay a portion of future premiums;

(i) except for a policy that can never develop nonforfeiture values, use an illustration that is "lapse-supported"; or

(j) use an illustration that is not "self-supporting."

(3) If an interest rate used to determine an illustrated non-guaranteed element is shown, it may not be greater than the earned interest rate underlying the disciplined current scale.

(4) An insurer may not use a footnote or caveat to define contract terms.

(5) An insurer shall use language that is understood by an average person.

Notes

Utah Admin. Code R590-177-5

Amended by Utah State Bulletin Number 2023-03, effective 1/24/2023