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Life Insurance Illustrations Model Regulation
Edition and licensing notes
Publisher. National Association of Insurance Commissioners (NAIC)
Status. NAIC model, © NAIC. Brief quotations under fair use; not the enacted law of any state until adopted.
What this document is
Life Insurance Illustrations Model Regulation 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 NAIC 582: Section 6B(8) (General Rules and Prohibitions)
“Use the term “vanish” or “vanishing premium,” or a similar term that implies the policy becomes paid up, to describe a plan for using non-guaranteed elements to pay a portion of future premiums;”
- NAIC Model NAIC 582: Section 4F(1) (Guaranteed Elements)
““Guaranteed elements” means the premiums, benefits, values, credits or charges under a policy of life insurance that are guaranteed and determined at issue.”
- NAIC Model NAIC 582: Section 4O (Self-Supporting Illustration)
““Self-supporting illustration” means an illustration of a policy form for which it can be demonstrated that, when using experience assumptions underlying the disciplined current scale, for all illustrated points in time on or after the fifteenth policy anniversary or the twentieth policy...”
- NAIC Life Insurance Illustrations Model Regulation § 4H(1), definition of basic illustration
“(1) “Basic illustration” means a ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and non-guaranteed elements.”
- NAIC Life Insurance Illustrations Model Regulation § 6B, general rules and prohibitions
“When using an illustration in the sale of a life insurance policy, an insurer or its producers or other authorized representatives shall not: (1) Represent the policy as anything other than a life insurance policy; (2) Use or describe non-guaranteed elements in a manner that is misleading or has...”
- NAIC Life Insurance Illustrations Model Regulation, Section 9A(1): submission of the signed basic illustration with the application
“If a basic illustration is used by an insurance producer or other authorized representative of the insurer in the sale of a life insurance policy and the policy is applied for as illustrated, a copy of that illustration, signed in accordance with this regulation, shall be submitted to the insurer...”
- NAIC Life Insurance Illustrations Model Regulation § 7A(8) (format of basic illustrations, order of guaranteed and non-guaranteed elements)
“(8) The guaranteed elements, if any, shall be shown before corresponding non-guaranteed elements and shall be specifically referred to on any page of an illustration that shows or describes only the non-guaranteed elements (e.g., “see page 2 for guaranteed elements.”)”
- NAIC Life Insurance Illustrations Model Regulation § 7B(5) (narrative summary, required statement on non-guaranteed elements)
“(5) A statement containing in substance the following: “This illustration assumes that the currently illustrated nonguaranteed elements will continue unchanged for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown.””
- NAIC Life Insurance Illustrations Model Regulation § 7A(7) (basic illustration format, scale limit and labeling of non-guaranteed elements)
“If the illustration shows any non-guaranteed elements, they cannot be based on a scale more favorable to the policy owner than the insurer’s illustrated scale at any duration. These elements shall be clearly labeled non-guaranteed.”
- NAIC Life Insurance Illustrations Model Regulation § 7D(2) (producer's signed statement on the numeric summary page)
“(2) A statement to be signed and dated by the insurance producer or other authorized representative of the insurer reading as follows: “I certify that this illustration has been presented to the applicant and that I have explained that any non-guaranteed elements illustrated are subject to change....”
- Life Insurance Illustrations Model Regulation, Section 5A
“Each insurer marketing policies to which this regulation is applicable shall notify the commissioner whether a policy form is to be marketed with or without an illustration. For all policy forms being actively marketed on the effective date of this regulation, the insurer shall identify in writing...”
- Life Insurance Illustrations Model Regulation, Section 5C
“If a policy form is identified by the insurer as one to be marketed with an illustration, a basic illustration prepared and delivered in accordance with this regulation is required, except that a basic illustration need not be provided to individual members of a group or to individuals insured...”
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