Case Law

• Alaska Supreme Court Opinions

Statutes, Rules & Regulations

• Alaska Statutes
• Alaska Administrative Code

Constitutions

Miscellaneous

Search

Advertising with us can place you in front of thousands of visitors a day. Learn more!

Alaska Statutes.

Title 21. Insurance

Chapter 45. Life Insurance and Annuities

Section 300. Standard Nonforfeiture Law For Life Insurance.

AS 21.45.300. Standard Nonforfeiture Law For Life Insurance.

(a) This section shall be known as the standard nonforfeiture law for life insurance.

(b) In the case of policies issued on and after the operative date of this section as defined in (cc) of this section a policy of life insurance, except as stated in (aa) of this section, may not be delivered or issued for delivery in this state unless it contains the following provisions, or corresponding provisions that in the opinion of the director are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements specified in this section and are essentially in compliance with (z) of this section:

(1) that, in the event of default in a premium payment, after premiums have been paid for at least one full year, the insurer will grant, upon proper request not later than 60 days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of the due date, of the amount as may be specified in this section;

(2) that, upon surrender of the policy within 60 days after the due date of any premium payment in default after premiums have been paid for at least three full years in the case of ordinary insurance and five full years in the case of industrial insurance, the insurer will pay, instead of a paid-up nonforfeiture benefit, a cash surrender value of the amount specified;

(3) that a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make the election elects another available option not later than 60 days after the due date of the premium in default;

(4) that if the policy shall have become paid up by completion of premium payments, or if it is continued under a paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance, or the fifth policy anniversary in the case of industrial insurance, the insurer will pay, upon surrender of the policy within 30 days after any policy anniversary, a cash surrender value of the amount specified;

(5) in the case of all other policies, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary, either during the first 20 policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on the policy;

(6) a statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or under the insurance law of this state; an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the insurer on the policy; or if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated in the policy, a statement that the method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered; and a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which the values and benefits are consecutively shown in the policy;

(7) that instead of a stipulated paid-up nonforfeiture benefit as described in (1) of this subsection, the insurer may substitute, upon proper request not later than 60 days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit that provides a greater amount or longer period of death benefits or, if applicable, a greater amount of earlier payment of endowment benefits;

(8) in the case of a policy which causes on a basis guaranteed in the policy an unscheduled change in benefits or premiums or which provides an option for a change in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate, and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy.

(c) Any of the provisions or portions of provisions set out in (b) of this section that are not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy. The insurer shall reserve the right to defer the payment of a cash surrender value for a period of six months after demand has been made on the policy surrendered.

(d) A cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary, whether or not required by (b) of this section, shall be an amount not less than the excess, if any, of the present value on the anniversary of the future guaranteed benefits which would have been provided for by the policy, including any existing paid-up additions, if there has been no default, over the sum of

(1) the then present value of the adjusted premiums as defined in (h) - (w) of this section, corresponding to premiums that would have fallen on and after the anniversary; and

(2) the amount of any indebtedness to the insurer on account of or secured by the policy.

(e) Notwithstanding (d) of this section, if a policy issued on or after the operative date of (w) of this section provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider supplemental policy provision, the cash surrender value referred to in (d) of this section shall be an amount not less than the sum of the cash surrender value as defined in (d) of this section for an otherwise similar policy issued at the same age without the same rider or supplemental policy provision and the cash surrender value as defined in (d) of this section for a policy which provides only the benefits otherwise provided by the rider or supplemental policy provision.

(f) Notwithstanding (d) of this section, if a family policy issued on or after April 7, 1984, defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse is age 71, the cash surrender value referred to in (d) of this section shall be an amount not less than the cash surrender value as defined in (d) of this section for an otherwise similar policy issued at the same age without the term insurance on the life of the spouse and the cash surrender value as defined in (d) for a policy which provides only the benefits otherwise provided by the term insurance on the life of the spouse. A cash surrender value available within 30 days after any anniversary under a policy paid-up by completion of all premium payments, or a policy continued under any paid-up nonforfeiture benefits whether or not required by (b) of this section, shall be an amount not less than the present value, on the anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the insurer on account of or secured by the policy.

(g) A paid-up nonforfeiture benefit available under the policy in the event of default in the premium payment due on any policy anniversary shall be such that its present value as of the anniversary shall be at least equal to the cash surrender value provided for by the policy or, if none is provided for, that cash surrender value which would have been required by this section in the absence of the conditions that premiums shall have been paid for at least a specified period.

(h) Except as provided in (j) of this section, the adjusted premiums for a policy shall be calculated on an annual basis and shall be the uniform percentage of the respective premiums specified in the policy for each policy year, excluding extra premiums on a substandard policy that the present value, at the date of issue of the policy, of all the adjusted premiums shall be equal to the sum of (1) the then present value of the future guaranteed benefits provided for by the policy; (2) two percent of the amount of the insurance, if the insurance is uniform in amount, or of the equivalent uniform amount, as defined, if the amount of insurance varies with the duration of the policy; (3) 40 percent of the adjusted premiums for the first policy year; (4) 25 percent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less, except that in applying the percentage specified in (3) and (4) of this subsection no adjusted premiums shall be considered to exceed four percent of the amount of insurance or uniform amount equivalent thereto. Whenever the plan or term of a policy has been changed, either by request of the insured or automatically in accordance with the provisions of the policy, the date of inception of the changed policy for the purposes of determining a nonforfeiture benefit or cash surrender value shall be the date as of which the age of the insured is determined for the purposes of the changed policy. The date of issue of a policy for the purposes of this section shall be the date on which the rated age of the insured is determined. This subsection does not apply to policies issued on or after the operative date of (w) of this section.

(i) If a policy provides an amount of insurance that varies with the duration of the policy, the equivalent uniform amount of insurance for the purpose of (h) of this section shall be considered to be the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term the amount of which does not vary with the duration and the benefit under which have the same present value at the date of issue as the benefits under the policy, except that in the case of a policy a varying amount of insurance issued on the life of a child under age 10, the equivalent uniform amount may be computed as though the amount of insurance provided by the policy before the attainment of age 10 were the amount provided by the policy at age 10.

(j) The adjusted premiums for a policy which provides term insurance benefits by rider or supplemental policy provision shall be equal to (1) the adjusted premiums for an otherwise similar policy issued at the same age without the term insurance benefits, increased during the period for which premiums for the term insurance benefits are payable, by (2) the adjusted premiums for the term insurance, the foregoing items (1) and (2) being calculated separately in accordance with (h) and (i) of this section, except that, for the purposes of (h)(2), (3) and (4) of this section, the amount of insurance of equivalent uniform amount of insurance used in the calculation of the adjusted premiums referred to in (2) of this subsection shall be equal to the excess of the corresponding amount determined for the entire policy over the amount used in the calculation of the adjusted premiums in (1) of this subsection.

(k) All adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of the Commissioner's 1958 Standard Ordinary Mortality Table, except that for any category or ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than six years younger than the actual age of the insured. Except as provided in (1) of this section, the calculations for all policies of industrial insurance shall be made on the basis of the 1941 Standard Industrial Mortality Table. All calculations shall be made on the basis of the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits. The rate of interest specified in the policy may not exceed three and one-half percent a year except that (1) a rate of interest not exceeding five and one-half percent a year may be used for policies issued on or after July 1, 1978, and (2) a rate of interest not exceeding six and one-half percent a year may be used for a single premium whole life or endowment insurance policy. In calculating the present value of paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed in the case of a policy of ordinary insurance, may be not more than those shown in the Commissioner's 1958 Extended Term Insurance Table. In the case of a policy of industrial insurance, the rates of mortality may be not more than 130 percent of the rates of mortality according to the 1941 Standard Industrial Mortality Table. The calculation of the adjusted premiums and present values for insurance issued on a substandard basis may be based on another table of mortality as may be specified by the insurer and approved by the director. This subsection does not apply to policies issued on or after the operative date of (w) of this section.

(l) In case of industrial policies issued on or after January 1, 1970, the adjusted premiums and present values referred to in this section shall be calculated on the basis of the Commissioner's 1961 Standard Industrial Mortality Table and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits, however, that specified the rate of interest specified in the policy may not exceed three and one-half percent a year except that (1) a rate of interest not exceeding five and one-half percent a year may be used for policies issued on or after July 1, 1978; and (2) a rate of interest not exceeding six and one-half percent a year may be used for a single premium whole life or endowment insurance policy. In calculating the present value of paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioner's 1961 Industrial Extended Term Insurance Table. The calculation of the adjusted premiums and present values for insurance issued on a substandard basis may be based on a table of mortality specified by the insurer and approved by the director. This subsection does not apply to policies issued on or after the operative date of (w) of this section.

(m) Except as provided in (s) of this section, the adjusted premiums for a policy shall be calculated on an annual basis and shall be a uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding a uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of (1) the then present value of the future guaranteed benefits provided for by the policy; (2) one percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years; and (3) 125 percent of the nonforfeiture net level premium as defined in (n) - (t) of this section. In applying the percentage specified in (3) of this paragraph a nonforfeiture net level premium shall not exceed four percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years. The date of issue of a policy for the purpose of this subsection shall be the date as of which the rated age of the insured is determined. This subsection applies to all policies issued after the operative date of (w) of this section.

(n) The nonforfeiture net level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy divided by the present value, at the date of issue of the policy, of an annuity of one a year payable on the date of issue of the policy and on each anniversary of the policy on which a premium falls due. This subsection applies to all policies issued after the operative date of (w) of this section.

(o) In the case of policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums or which provide an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of a change in the benefits or premiums the future adjusted premiums, nonforfeiture net level premiums, and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change. This subsection applies to all policies issued after the operative date of (w) of this section.

(p) Except as provided in (s) of this section, the recalculated future adjusted premiums for a policy shall be a uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all future adjusted premiums shall be equal to the excess of (1) the sum of (A) the then present value of the then future guaranteed benefits provided for by the policy; and (B) the additional expense allowance, if any; over (2) the then cash surrender value if any, or present value of any paid-up nonforfeiture benefit under the policy. This subsection applies to all policies issued after the operative date of (w) of this section.

(q) The additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of (1) one percent of the excess, if positive, of the average amount of insurance at the beginning of each of the first 10 policy years after the change over the average amount of insurance before the change at the beginning of each of the first 10 policy years after the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and (2) 125 percent of the increase, if positive, in the nonforfeiture net level premium. This subsection applies to all policies issued after the operative date of (w) of this section.

(r) The recalculated nonforfeiture net level premium shall be equal to the result obtained by dividing (1) by (2) where

(1) equals the sum of

(A) the nonforfeiture net level premium applicable before the change times the present value of an annuity of one a year payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred; and

(B) the present value of the increase in future guaranteed benefits provided for by the policy; and

(2) equals the present value of an annuity of one a year payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due. This subsection applies to all policies issued after the operative date of (w) of this section.

(s) Notwithstanding (m) - (q) of this section, in the case of a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, the policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, the adjusted premiums and present values may be calculated as if it were issued to provide those higher uniform amounts of insurance on the standard basis. This subsection applies to all policies issued after the operative date of (w) of this section.

(t) The adjusted premiums and present values for a policy of ordinary insurance referred to in this section shall be calculated on the basis of the Commissioner's 1980 Standard Ordinary Mortality Table or, at the election of the insurer for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors. The adjusted premiums and present values for a policy of industrial insurance shall be calculated on the basis of the Commissioner's 1961 Standard Industrial Mortality Table. The adjusted premiums and present values for a policy issued in a particular calendar year shall be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this subsection for policies issued in that calendar year. Provided, however, that

(1) at the option of the insurer, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this subsection, for policies issued in the immediately preceding calendar year;

(2) under a paid-up nonforfeiture benefit, including a paid-up dividend addition, a cash surrender value available, shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of the paid-up nonforfeiture benefit and paid-up dividend additions, if any;

(3) an insurer may calculate the amount of a guaranteed paid-up nonforfeiture benefit including any paid-up addition under the policy on the basis of an interest rate no less than that specified in the policy for calculating cash surrender values;

(4) in calculating the present value of paid-up term insurance with accompanying pure endowment, if any, offered as nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioner's Extended Term Insurance Table for policies of ordinary insurance and not more than the Commissioner's 1961 Industrial Extended Term Insurance Table for policies of industrial insurance;

(5) for insurance issued on a substandard basis, the calculations of adjusted premiums and present values may be based on appropriate modifications mentioned above;

(6) an ordinary mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation adopted by the director for use in determining the minimum nonforfeiture standard may be substituted for the Commissioner's 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioner's 1980 Extended Term Insurance Table;

(7) an industrial mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation adopted by the director for use in determining the minimum nonforfeiture standard may be substituted for the Commissioner's 1961 Standard Industrial Mortality Table or the Commissioner's 1961 Industrial Extended Term Insurance Table. This subsection applies to all policies issued after the operative date of (w) of this section.

(u) The nonforfeiture interest rate a year for a policy issued in a particular calendar year shall be equal to 125 percent of the calendar year statutory valuation interest rate for the policy as defined in the Standard Valuation Law, rounded to the nearer one quarter of one percent. This subsection applies to all policies issued after the operative date of (w) of this section.

(v) Notwithstanding any other provision in this title, a refiling of nonforfeiture values or their methods of computation for a previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provision of that policy form. This subsection applies to all policies issued after the operative date of (w) of this section.

(w) An insurer may file with the director a written notice of its election to comply with the provisions of this subsection after a specified date before January 1, 1989. That date shall be the operative date of this subsection for the insurer. If an insurer makes no election, the operative date of this subsection for the insurer shall be January 1, 1989.

(x) In the case of a plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurer based on then estimates of future experience, or in the case of any plan of life insurance which is of such a nature than minimum values cannot be determined by the methods described in subsections (b) - (k) or (m) of this section,

(1) the director must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insured as the minimum benefits otherwise required by subsections (b) - (w) of this section;

(2) the director must be satisfied that the benefits and pattern of premiums of the plan do not mislead prospective policyholders or insureds;

(3) the cash surrender values and paid-up nonforfeiture benefits provided by the plan must not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this Standard Nonforfeiture Law for Life Insurance, as determined by regulations adopted by the director.

(y) A cash surrender value and a paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in (b) - (w) of this section may be calculated upon the assumption that a death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall be not less than the amounts used to provide the additions. Notwithstanding the provisions of (d) of this section, certain additional benefits and premiums for those additional benefits, shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this section, and no additional benefits shall be required to be included in any paid-up nonforfeiture benefits. The benefits to be disregarded are those paid

(1) in the event of death or dismemberment by accident or accidental means;

(2) in the event of total and permanent disability;

(3) as a reversionary annuity or deferred reversionary annuity benefits;

(4) as term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this section would not apply;

(5) as term insurance on the life of a child or on the lives of children provided in a policy on the life of a parent of the child, if the term insurance expires before the child's age is 26, is uniform in amount after the child's age is one, and has not become paid-up by reason of the death of a parent of the child; and

(6) as other policy benefits additional to life insurance and endowment benefits.

(z) This subsection, in addition to all other applicable subsections of this section, shall apply to all policies issued on or after January 1, 1987. The cash surrender value available under the policy in the event of default in a premium payment due on a policy anniversary shall be in an amount which does not differ by more than two-tenths of one percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years, from the sum of the greater of zero and the basic cash value hereinafter specified and the present value of any existing paid-up additions less the amount of any indebtedness of the insurer under the policy. The basic cash value shall be equal to the present value on the policy anniversary of the future guaranteed benefits which would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the insurer if there had been no default, less the then present value of the nonforfeiture factors as defined in this subsection, corresponding to the premiums which would have fallen due on and after the policy anniversary. Provided, however, that the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage as described in subsection (d) or (j), whichever is applicable, be the same as are the effects specified in (d) or (j) of this section, whichever is applicable, on the cash surrender values as defined in that subsection. The nonforfeiture factor for each policy year shall be an amount equal to a percentage of the adjusted premium for the policy year, as defined in (h), (i), (j) and (m) of this section, whichever is applicable. Except as is required by the next succeeding sentence of this subsection, the percentage (1) must be the same percentage for each policy year between the second policy anniversary and the later of (A) the fifth policy anniversary and (B) the first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness of at least two-tenths of one percent of either the amount, of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years; and (2) must be such that no percentage after the later of the two policy anniversaries specifed in (l) of this subsection may apply to fewer than five consecutive policy years. Provided, that no basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, defined in (h), (i), and (j) of this section or in (m) of this section, whichever is applicable, were substituted for the nonforfeiture factors in the calculation of the basic cash value. All adjusted premiums and present values referred to in this subsection shall for a particular policy be calculated on the same mortality and interest bases as are used in demonstrating the policy compliance with the other subsections of this section. The cash surrender values referred to in this subsection shall include all endowment benefits provided for by the policy. Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment shall be determined in manners consistent with the manner specified for determining the analogous minimum amounts in (b) - (g), (m), and (y) of this section. The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those listed as items (1) through (6) in (y) of this section shall conform with the principles of this subsection.

(aa) This section does not apply to any of the following:

(1) reinsurance;

(2) group insurance;

(3) pure endowment;

(4) annuity or reversionary annuity contract;

(5) term policy of uniform amount, which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy;

(6) term policy of decreasing amount, which provides no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium, calculated as specified in (h) - (w) of this section is less than the adjusted premiums calculated, on a policy of uniform amount or renewal thereof, which provides no guaranteed nonforfeiture or endowment benefits, issued at the same age and for the same initial amount of insurance for a term defined as follows: for ages at issue 50 and under, the term shall be 15 years; thereafter, the term decrease one year for each year of age beyond 50, and for a term of 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy;

(7) policy, which provides no guaranteed nonforfeiture or endowment benefits, for which no cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the beginning of any policy year, calculated as specified in (d) - (w) of this section, exceeds two and one-half percent of the amount of insurance at the beginning of the same policy year;

(8) policy which shall be delivered outside this state through an agent or other representative of the insurer issuing the policy.

(bb) For purposes of determining the applicability of subsection (aa), the at expiry for a joint term life insurance policy shall be the age at expiry of the oldest life.

(cc) The operative date of this section is January 1, 1968 except that an insurer may elect to comply with this section before that date by filing a written notice of election with the director. A written notice of election is not effective unless the insurer specifies in the notice

(1) the date upon which this section is to be operative, which date must be later than the date on which the notice is filed;

(2) the policies to which this section applies.