Home Table of Contents

054.00.17-5. Definitions

AR ADC 054.00.17-5Arkansas Administrative Code

West's Arkansas Administrative Code
Title 054. Insurance Department
Division 00.
Rule 17. Life Insurance Disclosure.
Ark. Admin. Code 054.00.17-5
054.00.17-5. Definitions
Currentness
For the purposes of this rule, the following definitions shall apply:
A. “Buyer's Guide” means the free guide available at the Arkansas Insurance Department or online at www.insurance.arkansas.gov titled “Life Insurance Buyer's Guide.”
B. “Current scale of nonguaranteed elements” means a formula or other mechanism that produces values for an illustration as if there is no change in the basis of those values after the time of illustration.
C. “Generic name” means a short title that is descriptive of the premium and benefit patterns of a policy or a rider.
D. “Nonguaranteed elements” means the premiums, credited interest rates (including any bonus), benefits, values, non-interest based credits, charges or elements of formulas used to determine any of these, that are subject to company discretion and are not guaranteed at issue. An element is considered non-guaranteed if any of the underlying non-guaranteed elements are used in its calculation.
E. “Policy data” means a display or schedule of numerical values, both guaranteed and nonguaranteed for each policy year or a series of designated policy years of the following information: illustrated annual, other periodic, and terminal dividends; premiums; death benefits; cash surrender values and endowment benefits.
F. “Policy summary” means a written statement describing the elements of the policy, including, but not limited to:
(1) A prominently placed title as follows: STATEMENT OF POLICY COST AND BENEFIT INFORMATION;
(2) The name and address of the insurance producer or, if no insurance producer is involved, a statement of the procedure to be followed in order to receive responses to inquiries regarding the policy summary;
(3) The full name and home office or administrative office address of the company in which the life insurance policy is to be or has been written;
(4) The generic name of the basic policy and each rider;
(5) The following amounts, where applicable, for the first five (5) policy years and representative policy years thereafter sufficient to clearly illustrate the premium and benefit patterns; including at least one age from sixty (60) through sixty-five (65) and policy maturity:
(a) The annual premium and premium payment period for the basic policy;
(b) The annual premium and premium payment period for each optional rider;
(c) The amount payable upon death at the beginning of the policy year regardless of the cause of death, other than suicide or other specifically enumerated exclusions, that is provided by the basic policy and each optional rider, with benefits provided under the basic policy and each rider shown separately;
(d) The total guaranteed cash surrender values at the end of the year with values shown separately for the basic policy and each rider; and
(e) Any endowment amounts payable under the policy that are not included under cash surrender values above;
(6) The effective policy loan annual percentage interest rate, if the policy contains this provision, specifying whether this rate is applied in advance or in arrears. If the policy loan interest rate is adjustable, the policy summary shall also indicate that the annual percentage rate will be determined by the company in accordance with the provisions of the policy and the applicable law;
(7) The specific type of life insurance coverage;
(8) If dividends are to be illustrated, it must disclose that such dividends are neither guarantees nor estimates of future results, and that dividend illustrations are based on the company' current experience and may change depending upon such company experience. Any additional policy benefits or guarantees made by the policy or arising from the use of dividends must be separately disclosed;
(9) Where any nonguaranteed element or value is shown, equal prominence must be given to the corresponding guaranteed value;
(10) If the amount of coverage or premium for the policy and riders decreases or increases at any time, representative amounts of coverages and premiums must be shown to indicate to the prospective purchaser how such amounts will change; and
(11) The date on which the policy summary is prepared.

Credits

Amended July 15, 2009.
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 054.00.17-5, AR ADC 054.00.17-5
End of Document