Utah Admin. Code R590-93-3 - Definitions

Terms used in this rule are defined in Section 31A-1-301. Additional terms are defined as follows:

(1) "Contract" means an annuity contract.

(2) "Direct-response solicitation" means a solicitation through a sponsoring or endorsing entity or individually solely through mail, telephone, the internet, or other mass communication media.

(3)

(a) "Direct solicitation" means a personalized solicitation to a specific individual through an insurer or producer that is not a direct-response solicitation.

(b) Direct solicitation does not include a group meeting held by a producer solely for the purpose of educating or enrolling individuals or, when initiated by an individual member of the group, assisting with the selection of investment options offered by a single insurer in connection with enrolling that individual.

(4) "Existing insurer" means the insurance company whose policy or contract is changed or affected in a manner described within the definition of "replacement" in Subsection (12).

(5) "Existing policy or contract" means an individual policy or contract in force, including a policy under a binding or conditional receipt, or a policy or contract that is within an unconditional refund period.

(6)

(a) "Financed purchase" means the purchase of a new policy involving the actual or intended use of funds obtained by the withdrawal or surrender of, or by borrowing from, values of an existing policy to pay all or part of any premium due on the new policy.

(b)

(i) A withdrawal, surrender, or borrowing involving the policy values of an existing policy used to pay premiums on a new policy owned by the same policyholder and issued by the same company within four months before or 13 months after the effective date of the new policy is prima facie evidence of the policyholder's intent to finance the purchase of the new policy with existing policy yields.

(ii) The standard in Subsection (i) does not change the monitoring requirements in Subsection R590-93-4(1)(e).

(c) A financed purchase is a replacement.

(7) "Illustration" means a presentation or depiction that includes non-guaranteed elements of a policy over a period of years as defined in Rule R590-177.

(8) "Policy" means a life insurance policy.

(9)

(a) "Policy summary," for a policy or contract other than a universal life policy, means a written statement regarding a policy or contract that includes the following information:

(i) the current death benefit;

(ii) the annual contract premium;

(iii) the current cash surrender value;

(iv) the current dividend;

(v) the application of current dividend; and

(vi) the amount of any outstanding loan.

(b) "Policy summary," for a universal life policy, means a written statement that includes the following information:

(i) the beginning and end date of the current report period;

(ii) the policy value at the end of the previous report period and at the end of the current report period;

(iii) the total amounts that have been credited or debited to the policy value during the current report period, identifying each by type, such as interest, mortality, expense, and riders;

(iv) the current death benefit at the end of the current report period on each life covered by the policy;

(v) the net cash surrender value of the policy as of the end of the current report period; and

(vi) the amount of outstanding loans, if any, as of the end of the current report period.

(10) "Registered contract" means a contract or policy subject to the prospectus delivery requirements of the Securities Act of 1933, 15 U.S.C. Sec. 77a.

(11) "Replacing insurer" means the insurance company that issues or proposes to issue a new policy or contract that:

(a) replaces an existing policy or contract; or

(b) is a financed purchase.

(12) "Replacement" means a transaction in which a new policy or contract is to be purchased, and the producer or insurer is aware, or should be aware, that an existing policy or contract is or will be:

(a) lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer, or otherwise terminated;

(b) converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values;

(c) amended to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid;

(d) reissued with any reduction in cash value; or

(e) used in a financed purchase.

(13)

(a) "Replacement notice" means the same as the following documents, available on the department's website, https://insurance.utah.gov:

(i) Appendix A, Important Notice: Replacement of Life Insurance or Annuities;

(ii) Appendix B, Notice Regarding Replacement: Replacing Your Life Insurance Policy or Annuity; and

(iii) Appendix C, Important Notice: Replacement of Life Insurance or Annuities.

(b) The replacement notice shall be made available by the replacing insurer and must be imprinted with the name, address, and telephone number of the replacing insurer.

(14) "Sales material" means a sales illustration and any other written, printed, or electronically presented information provided by the company or producer and used in the presentation to the policy or contract holder related to the policy or contract purchased.

Notes

Utah Admin. Code R590-93-3

Amended by Utah State Bulletin Number 2022-16, effective 8/8/2022