Subchapter B. REQUIREMENTS FOR LIFE INSURANCE
INDIVIDUAL POLICIES Sec.
89.31—89.37. [Reserved].
89.41. General filing requirements.
89.42. Nonforfeiture value requirements.
89.43. Accidental death benefit.
PREMIUM FINANCING FOR COLLEGE STUDENTS
89.51. Promissory notes.
89.52. Policy provision.
89.53. Policy receipt or acceptance form.
89.54. Sales materials.
GROUP POLICIES
89.61. General filing requirements.
89.62. Group annuity policies and forms.
Cross References This subchapter cited in 31 Pa. Code § 89.102 (relating to guidelines for approval of forms).
INDIVIDUAL POLICIES
§ § 89.31—89.37. [Reserved].
Source The provisions of these § § 89.31—89.37 reserved December 28, 1973, effective January 1, 1974, 3 Pa.B. 2963. Immediately preceeding text appears at serial pages (214542) and (287707).
§ 89.41. General filing requirements.
(a) Incontestable clauses. Under sections 410 and 420C of the act (40 P. S. § § 510 and 574) the permissible exclusions to the incontestable clause are clearly set forth and others are not permitted. Consequently, the hazard of engaging in military or naval services, except in time of war, and the hazard of aviation may not be made exclusions to the incontestable clause.
(b) [Reserved].
(c) Dividends payable to third parties. If dividends are to be paid to a third party, a statement shall be included showing the right of revocation of the policyholder.
(d) Special premium rates. In the case of rated policies calling for higher premiums than the corresponding standard contracts, the words ‘‘Special Premium Class,’’ or a similar designation, shall be included in the brief description or on the specifications page.
(e) Work sheets. Because of the multitude of policies with almost infinite variation in nomenclature and language being submitted to the Department, it is requested that companies submitting new forms for approval also submit the work sheets showing the formulae for the net renewal premiums and for the reserves expressed in standard actuarial symbols with all pertinent data as to valuation basis, surrender charges, paid-up options and the like listed. The form shall show the name of the company and its address and identify the individual or firm responsible for the ‘‘certification’’ that the methodology is consistent with the premiums and benefits provided by the policy.
Source The provisions of this § 89.41 amended July 22, 1977, effective July 23, 1977, 7 Pa.B. 2059. Immediately preceding text appears at serial page (13322).
§ 89.42. Nonforfeiture value requirements.
(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.
Source The provisions of this § 89.42 amended October 11, 1974, effective October 12, 1974, 4 Pa.B. 2173. Immediately preceding text appears at serial page (7752).
Cross References This section cited in 31 Pa. Code § 90d.5 (relating to termination of coverage); 31 Pa. Code § 90f.8 (relating to termination of coverage); 31 Pa. Code § 90g.8 (relating to termination of coverage); and 31 Pa. Code § 90h.6 (relating to termination of coverage).
§ 89.43. Accidental death benefit.
A provision for accidental death benefit may not contain a requirement that death must occur within a specific time period.
Source The provisions of this § 89.43 adopted June 23, 1978, effective June 24, 1978, 8 Pa.B. 1678.
Cross References This section cited in 31 Pa. Code § 90d.4 (relating to exclusions and restrictions).
PREMIUM FINANCING FOR COLLEGE STUDENTS
§ 89.51. Promissory notes.
(a) If a promissory note is to be executed by the insured in connection with the financing of the insurance premium, this fact shall be set forth in the application immediately preceding the signature of the applicant, showing the amount of the note, the true rate of interest and the amount of down payment made at the time of taking the application.
(b) If the insured is a minor and executes a promissory note in connection with his premium payment or payments, the note shall be co-signed by the parent, legal guardian or adult spouse of the insured.
(c) If a promissory note is executed in connection with the financing of less than the full first year’s premium, the balance of the premium shall be paid by the applicant at the time the application is taken.
(d) A down payment shall be paid by the applicant and the payment directly or indirectly made by the agent under any circumstances shall be deemed a rebate or inducement.
Source The provisions of this § 89.51 adopted January 20, 1970.
§ 89.52. Policy provision.
(a) A premium financing arrangement shall be fully set forth and described in the policy, and a copy of a promissory note executed by the insured and an assignment thereof shall be attached to the policy.
(b) A copy of an assignment of a promissory note executed by the insured subsequent to the issuance of the policy and copies of additional promissory notes executed by the insured subsequent to the issuance of the policy shall be delivered to the insured for attachment to the policy.
(c) The maximum amount of premium financing arrangement which may be entered into in connection with the purchase of the policy shall also be set forth in the policy, and shall be in accordance with reasonable and sound underwriting practices as determined by the company.
Source The provisions of this § 89.52 adopted January 20, 1970.
§ 89.53. Policy receipt or acceptance form.
(a) Upon delivery of the policy, a policy receipt or acceptance form shall be executed by the insured acknowledging that:
(1) The policy has been issued as presented.
(2) The insured understands the provisions and obligations of the premium financing arrangement and the indebtedness which he has incurred.
(b) A policy receipt or acceptance form should be registered by number in the home office of the company.
(c) The receipts or acceptance forms shall accompany the policy at the time of delivery only, and may not be made available at any other time or for another purpose.
(d) Until the executed policy receipt or acceptance form has been received and filed in the home office of the company, no promissory note executed by the insured should be sold or otherwise transferred or assigned, and no commission on the sale should be paid to an agent.
Source The provisions of this § 89.53 adopted January 20, 1970.
§ 89.54. Sales materials.
(a) Sales materials, including promissory note forms and other forms used in the sale of the insurance programs, shall be submitted to this Department with a letter of transmittal at the time of submitting the policy form in question for approval.
(b) Additions or amendments to the materials may not be made by the company unless first submitted and found acceptable to this Department.
GROUP POLICIES
§ 89.61. General filing requirements.
(a) Conformity to definition. A group life policy issued for delivery in this Commonwealth will not be approved by the Department which does not apply to a group filing within the definition of a group qualified for the insurance under the Pennsylvania Group Life Statute (40 P. S. § § 532.1—532.9). If any element of doubt exists as to whether a particular group is one authorized by the statute, the question shall be referred to the Department for review in advance of filing.
(b) Identification of insured. Group life and annuity certificates filed with the Department shall provide for the identification of the insured. This may be accomplished by having the name of the insured stated on the certificate or any code which could be used in the identification of the certificate holder.
(c) Beneficiary. Concerning group life certificates, each employe insured under a form of group life insurance shall be given written evidence of his beneficiary designation, if any.
(d) Variations in policies. Group life policies, their certificates and the intended insert pages reflecting possible variations shall be accepted for approval, provided that the filing is accompanied by a statement showing the combinations of pages which will be used for the different types of policies.
(e) Dependent policies. Dependent group life is not permissible.
(f) Certificates. Certificates shall conform with all of the following:
(1) Certificates shall be issued to the policy owner within a reasonable period of time after issuance of the master policy for delivery to each person insured.
(2) Certifying language shall be used in certificates.
(3) Certificates should state the benefits applicable to the person insured or state the schedule of benefits applicable to the class to which he belongs.
(g) Modes of settlement. A statement concerning the availability of optional modes of settlement should appear in the certificate as well as in the master policy.
(h) Accidental death benefit. A provision for accidental death benefit may not contain a requirement that death must occur within a specific time period.
Source The provisions of this § 89.61 amended June 23, 1978, effective June 24, 1978, 8 Pa.B. 1678. Immediately preceding text appears at serial page (14249).
§ 89.62. Group annuity policies and forms.
(a) Variable annuities shall conform with Chapter 85 (relating to variable annuity and variable accumulation annuity contracts).
(b) A group annuity master policy should state the type of an annuity funding plan used, such as regular deferred, deposit administration, separate account and the like.
(c) A statement concerning the availability of optional modes of settlement shall appear in the certificates as well as in the master policy.
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