(1) "Direct-response solicitation" means a solicitation through
mailings, telephone, the internet or other mass communication media.
(2) "Existing insurer" means the insurance company whose
policy or contract is or will be changed or affected in a manner described
within the definition of "replacement".
(3) "Existing policy or contract" means an individual life
insurance policy or annuity contract in force, including a policy under a
binding or conditional receipt or a policy or a contract that is within an
unconditional refund period.
(4) "Financed purchase" means the purchase of a new policy
involving the actual or intended use of funds obtained by the withdrawal or
surrender of, or by borrowing from values of an existing policy to pay all or
part of any premium due on the new policy.
For purposes of a regulatory review of an individual transaction only,
if a withdrawal, surrender, or borrowing by an individual involves the policy
values of an existing policy and is used to pay premiums on a new policy owned
by the same policyholder and issued by the same company within four months
before or 13 months after the effective date of the new policy, it will be
deemed prima facie evidence of the policyholder's intent to finance the
purchase of the new policy with existing policy values. This prima facie standard is not intended to
increase or decrease the monitoring obligations contained in this subchapter.
(5) "Illustration" means a presentation or depiction that
includes non-guaranteed elements of a policy of life insurance over a period of
years as described in 33-20-604, MCA.
(6) "Policy summary," for the purposes of this subchapter:
(a) for policies or contracts other than universal life policies,
means a written statement regarding a policy or contract which shall contain to
the extent applicable, but need not be limited to, the following information:
(i) current death benefit;
(ii) annual contract premium;
(iii) current cash surrender value;
(iv) current dividend;
(v) application of current dividend; and
(vi) amount of outstanding loan.
(b) for universal life policies, means a written statement that shall
contain at least the following information:
(i) the beginning and end date of the current report period;
(ii) the policy value at the end of the previous report period and at
the end of the current report period;
(iii) the total amounts that have been credited or debited to the
policy value during the current report period, identifying each by type (e.g.,
interest, mortality, expense and riders) ;
(iv) the current death benefit at the end of the current report period
on each life covered by the policy;
(v) the net cash surrender value of the policy as of the end of the
current report period; and
(vi) the amount of outstanding loans, if any, as of the end of the
current report period.
(7) "Producer" shall be defined to include agents and
(8) "Registered contract" means a variable annuity contract
or variable life insurance policy subject to the prospectus delivery
requirements of the Securities Act of 1933.
(9) "Replacement" means a transaction in which a new policy
or contract is to be purchased, and it is known or should be known to the
proposing producer, or to the proposing insurer if there is no producer, that
by reason of such transaction, an existing policy or contract has been or is to
(a) lapsed, forfeited, surrendered, or partially surrendered,
assigned to the replacing insurer or otherwise terminated;
(b) converted to reduced paid-up insurance, continued as extended
term insurance, or otherwise reduced in value by the use of nonforfeiture
benefits or other policy values;
(c) amended so as to effect either a reduction in benefits or in the
term for which coverage would otherwise remain in force or for which benefits
would be paid;
(d) reissued with any reduction in cash values; or
(e) used in a financed purchase.
(10) "Replacing insurer" means the insurance company that
issues or proposes to issue a new policy or contract that replaces an existing
policy or contract or is a financed purchase.
(11) "Sales material" means a sales illustration and any
other written, printed or electronically presented information created, or
completed or provided by the company or producer and used in the presentation
to the policy or contract owner related to the policy or contract