Title 3 . Commerce, Community, and Economic Development

Chapter 28 . Miscellaneous

Section 835. Annual report; notice to policy owners

3 AAC 28.835. Annual report; notice to policy owners

(a) If a policy is designated as one for which an illustration will be used, the insurer shall provide each policy owner with an annual report on the status of the policy that contains at least the following information:

(1) for a universal life policy, the report must include

(A) the beginning and ending date of the current report period;

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

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

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

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

(F) the amount of any outstanding loans, as of the end of the current report period;

(2) in addition to the requirements of (1) of this subsection, for a fixed premium universal life policy, assuming guaranteed interest, mortality, and expense loads and assuming continued scheduled premium payments, if the net cash surrender value of the policy will not maintain insurance in force until the end of the next reporting period, a notice of that effect must be included in the report;

(3) in addition to the requirements of (1) of this subsection, for a flexible premium universal life policy, assuming guaranteed interest, mortality, and expense loads, if the policy's net cash surrender value will not maintain insurance in force until the end of the next reporting period unless further premium payments are made, a notice to that effect must be included in the report; and

(4) for all policies not described in (1) - (3) of this subsection, where applicable, the report must include as of the end of the current report period:

(A) the current death benefit on each life covered by the policy;

(B) the annual contract premium;

(C) the net cash surrender value;

(D) the current dividend;

(E) how and to what the current dividend would be applied under the dividend option elected; and

(F) the amount of any outstanding loan.

(b) In addition to the requirements of (a) of this section, an insurer writing a life insurance policy that does not build nonforfeiture values shall provide an annual report for a policy only for a year when the insurer has made a change to a non-guaranteed policy element.

(c) If an annual report does not include an in force illustration, the report must contain the following prominently displayed notice: "IMPORTANT POLICY OWNER NOTICE: You should consider requesting more detailed information about your policy to understand how it may perform in the future. You should not consider replacement of your policy or make changes in your coverage without requesting a current illustration. You may annually request, without charge, a current illustration by calling (insurer's phone number), writing to (insurer's name) at (insurer's address), or contacting the person who sold you your policy. If you do not receive a current illustration of your policy within 30 days from your request, you should contact your state insurance division." The insurer may vary the order of the methods for obtaining an in force illustration in the notice.

(d) Upon the request of a policy owner, an insurer shall furnish an in force illustration of current and future benefits and values based on the insurer's present illustrated scale. This illustration must comply with the requirements of 3 AAC 28.815(b) - (d), 3 AAC 28.820(a) , and 3 AAC 28.820(e) . The insurer is not required to obtain a signature or an acknowledgement of receipt of this illustration from the policyholder.

(e) If, since the last annual report, an insurer makes an adverse change to a non-guaranteed element that could affect the policy, the annual report must contain a prominently displayed notice of that fact and of the nature of the change.

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