NAIC Life Insurance Disclosure Model Regulation (#580)

What this document is

NAIC Life Insurance Disclosure Model Regulation (#580) is a naic model law published by National Association of Insurance Commissioners (NAIC). It is one of the documents that insurance license exam questions are written from, including life & health practice questions. This page summarizes it and points to the official version, which is the text to rely on.

Sections cited in practice questions

Each practice answer shows the exact passage it comes from. These are sections of this document that questions cite, with a short excerpt from the source text.

• NAIC Model #580: Section 5 (Duties of Insurers)

  “Amounts in Section 4F(5) shall be listed in total, not on a per thousand or per unit basis.”

• NAIC Model #580: Section 4 (Policy Summary Definition)

  “The total guaranteed cash surrender values at the end of the year with values shown separately for the basic policy and each rider;”

• NAIC Life Insurance Disclosure Model Regulation, Section 4F(1) (definition of policy summary, required title)

  ““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;”

• NAIC Life Insurance Disclosure Model Regulation § 8, failure to comply

  “Failure of an insurer to provide or deliver a Buyer’s Guide, an in force illustration, a policy summary or policy data as provided in Section 5 shall constitute an omission that misrepresents the benefits, advantages, conditions or terms of an insurance policy.”

• NAIC Life Insurance Disclosure Model Regulation § 5A(2), form and content of the policy summary

  “The policy summary shall show guarantees only. It shall consist of a separate document with all required information set out in a manner that does not minimize or render any portion of the summary obscure.”

• NAIC Life Insurance Disclosure Model Regulation § 4F(6) (policy loan interest rate in the policy summary)

  “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...”

• NAIC Life Insurance Disclosure Model Regulation § 7B (agent identification before a sales presentation)

  “An agent shall inform the prospective purchaser, prior to commencing a life insurance sales presentation, that he or she is acting as a life insurance agent and inform the prospective purchaser of the full name of the insurance company which the agent is representing to the buyer. In sales...”

• NAIC Life Insurance Disclosure Model Regulation § 7C (no additional fee for customary solicitation or servicing)

  “This provision does not permit persons to charge an additional fee for services that are customarily associated with the solicitation, negotiation or servicing of policies.”

• NAIC Life Insurance Disclosure Model Regulation § 7C (use of financial planner and similar terms)

  “An insurance producer shall not use terms such as “financial planner,” “investment advisor,” “financial consultant,” or “financial counseling” in such a way as to imply that he or she is primarily engaged in an advisory business in which compensation is unrelated to sales unless that is actually...”

• NAIC Life Insurance Disclosure Model Regulation § 7D (references to nonguaranteed elements)

  “Any reference to nonguaranteed elements shall include a statement that the item is not guaranteed and is based on the company’s current scale of nonguaranteed elements (use appropriate special term such as “current dividend” or “current rate” scale.) If a nonguaranteed element would be reduced by...”

• NAIC Life Insurance Disclosure Model Regulation § 7C (citing trade or professional association membership)

  “This provision also is not intended to preclude persons who are members of a recognized trade or professional association having such terms as part of its name from citing membership, providing that a person citing membership, if authorized only to sell insurance products, shall disclose that fact.”

• NAIC Life Insurance Disclosure Model Regulation (#580) Section 5A(2): timing of policy summary delivery

  “Delivery of the policy summary shall be consistent with the time for delivery of the Buyer’s Guide as specified in Paragraph (1).”

Practice this material

Questions about this source

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