For the purposes of this
(1) " Actuarial Standards Board" means the board
established by the American academy of actuaries to develop and promulgate
standards of actuarial practice.
(2) " Contract premium" means the gross premium
that is required to be paid under a fixed premium policy, including the premium
for a rider for which benefits are shown in the illustration.
(3) "Currently payable scale" means a scale of non-guaranteed
elements in effect for a policy form as of the preparation date of the
illustration or declared to become effective within the next 95 days.
(4) "Disciplined current scale " means a scale of non-guaranteed elements constituting a limit on
illustrations currently being illustrated by an insurer that is based on actual
recent historical experience, as certified annually by an illustration actuary
designated by the insurer. Further
guidance in determining the disciplined current scale as contained in standards
established by the actuarial standards board may be relied upon if the
consistent with all provisions of this subchapter;
(b) limit a
disciplined current scale to reflect only actions that have already been taken
or events that have already occurred;
(c) do not
permit a disciplined current scale to include any projected trends of
improvements in experience or any assumed improvements in experience beyond the
illustration date; and
(d) do not
permit assumed expenses to be less than minimum assumed expenses.
(5) "Generic name" means a short title descriptive of the policy
being illustrated such as "whole life," "term life" or " flexible premium adjustable life."
(6) "Guaranteed elements" means the premiums, benefits, values,
credits or charges under a policy of life insurance that are guaranteed and
determined at issue.
(7) "Illustrated scale" means a scale of non-guaranteed elements
currently being illustrated that is not more favorable to the policy owner than
the lesser of:
disciplined current scale; or
(b) the currently
(8) "Illustration" means a presentation or depiction that includes
non-guaranteed elements of a policy of life insurance over a period of years
and that is one of the three types defined below:
illustration" means a ledger or proposal used in the sale of a life
insurance policy that shows both guaranteed and non-guaranteed elements;
(b) "supplemental illustration" means an illustration furnished in
addition to a basic illustration that meets the applicable requirements of this
subchapter, and that may be presented in a format differing from the basic
illustration, but may only depict a scale of non-guaranteed elements that is
permitted in a basic illustration;
(c) " in force illustration " means
an illustration furnished at any time after the policy that it depicts has been
in force for one year or more.
(9) " Illustration
actuary " means an actuary
meeting the requirements of ARM 6.6.715 who certifies to illustrations based on
the standard of practice promulgated by the Actuarial Standards Board.
illustration" means an illustration of a policy form failing the test of
self-supporting as defined in this subchapter, under a modified persistency
rate assumption using persistency rates underlying the disciplined current
scale for the first five years and 100% policy persistency thereafter.
(11) " Minimum
assumed expenses" means the minimum expenses that may be used in the
calculation of the disciplined current scale for a policy form. The insurer
may choose to designate each year the method of determining assumed expenses
for all policy forms from the following:
(a) fully allocated expenses;
(b) a generally recognized expense
table based on fully allocated expenses representing a significant portion of
insurance companies and approved by the commissioner;
(c) marginal expenses which may be
used only if greater than a generally recognized expense table. If no
generally recognized expense table is approved, fully allocated expenses must
elements" means the premiums, benefits, values, credits or charges under a
policy of life insurance that are not guaranteed or not determined at issue.
(13) " Non-term
group life" means a group policy or individual policies of life insurance
issued to members of an employer group or other permitted group where:
(a) every plan of coverage was
selected by the employer or other group representative;
(b) some portion of the premium is
paid by the group or through payroll deduction; and
(c) group underwriting or
simplified underwriting is used.
(14) "Policy owner" means
the owner named in the policy or the certificate holder in the case of a group
(15) "Premium outlay"
means the amount of premium assumed to be paid by the policy owner or other
premium payer out-of-pocket.
(16) " 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 anniversary for second-or-later-to-die policies (or upon
policy expiration if sooner) , the accumulated value of all policy cash flows
equals or exceeds the total policy owner value available. For this purpose, policy owner value will
include cash surrender values and any other illustrated benefit amounts
available at the policy owner's election.
(17) "Terminal dividends " means dividends paid when a policy