Title 3 . Commerce, Community, and Economic Development

Chapter 28 . Miscellaneous

Section 815. General rules and prohibitions

3 AAC 28.815. General rules and prohibitions

(a) Failure to comply with 3 AAC 28.800 - 3 AAC 28.849 is a violation of AS 21.36.020 and 21.36.030.

(b) An illustration used in the sale of a life insurance policy must satisfy the requirements of 3 AAC 28.800 - 3 AAC 28.849, be clearly labeled "life insurance illustration," and contain the following information:

(1) the name of the insurer;

(2) the name, business address, and telephone number of the person soliciting the policy, if any;

(3) the name, age, and sex of the proposed insured, unless a composite illustration is permitted;

(4) the underwriting or rating classification on which the illustration is based, described in sufficient detail to identify the payment schedule and any other elements dependent on the classification;

(5) the generic name of the policy, company product name, and form number;

(6) the initial death benefit; and

(7) the dividend option election or the use of non-guaranteed elements, if any.

(c) When using an illustration in the sale of a life insurance policy, a person may not

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

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

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

(4) use an illustration other than one prepared or authorized by the insurer for the specific policy being sold;

(5) 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;

(6) provide an applicant with an incomplete illustration;

(7) falsely represent, directly or indirectly, that premium payments will not be required for each year of the policy in order to maintain the illustrated death benefits;

(8) use the term "vanish," "vanishing premium," or a similar term that implies the policy could become paid up, to describe a use of non-guaranteed elements to pay a portion of future premiums;

(9) use an illustration that is lapse-supported, unless the policy will never develop nonforfeiture values; or

(10) use a non self-supporting illustration.

(d) If an interest rate used to determine the illustrated non-guaranteed elements is shown, the interest rate may not be more than the earned interest rate underlying the disciplined current scale.

History: Eff. 9/1/98, Register 147

Authority: AS 21.06.090

AS 21.36.020

AS 21.36.030

AS 21.36.150

AS 21.42.120

AS 21.42.130