In this article, unless the context otherwise requires:
1. "Actuarial standards board" means the board that is established by the American academy of actuaries to develop and adopt standards of actuarial practice.
2. "Basic illustration" means a ledger or proposal that is used in the sale of a life insurance policy and that shows both guaranteed and nonguaranteed elements.
3. "Contract premium":
(a) Means the gross premium that is required to be paid under a fixed premium policy.
(b) Includes the premium for a rider for which benefits are shown in an illustration.
4. "Currently payable scale" means a scale of nonguaranteed elements in effect for a policy form as of the preparation date of the illustration or declared to become effective within the next ninety-five days.
5. "Disciplined current scale":
(a) Means a scale of nonguaranteed elements that constitutes a limit on illustrations currently being illustrated by an insurer and that is reasonably based on recent, actual historical experience as certified annually by an illustration actuary designated by the insurer.
(b) Includes reliance on further guidance in determining the disciplined current scale as contained in standards by the actuarial standards board if the standards comply with all of the following:
(i) Are consistent with this article.
(ii) Limit a disciplined current scale to reflect only actions that have already been taken or events that have already occurred.
(iii) Do not allow a disciplined current scale to include any projected trends of improvements in experience or any assumed improvements in experience beyond the illustration date.
(iv) Do not allow assumed expenses to be less than the minimum-assumed expenses.
6. "Generic name" means a short title descriptive of the policy being illustrated such as "whole life", "term life" or "flexible premium adjustable life".
7. "Guaranteed elements" means the premiums, benefits, values, credits or charges under a policy of life insurance that are guaranteed and that are determined when the policy is issued.
8. "Illustrated scale" means a scale of nonguaranteed elements currently being illustrated that is not more favorable to the policyowner than the lesser of either of the following:
(a) The disciplined current scale.
(b) The currently payable scale.
9. "Illustration" means a presentation or depiction that includes nonguaranteed elements of a life insurance policy over a period of years and that is a basic illustration, supplemental illustration or in-force illustration.
10. "Illustration actuary" means an actuary who meets the requirements prescribed in section 20-431.08 and who certifies the illustrations based on the standard of practice adopted by the actuarial standards board.
11. "In-force illustration" means an illustration that is furnished at any time after the life insurance policy that it depicts has been in force for one year or more.
12. "Lapse-supported illustration" means an illustration of a policy form that fails to meet the definition of self-supporting illustration under a modified persistency rate assumption that uses persistency rates underlying the disciplined current scale for the first five years and one hundred percent policy persistency thereafter.
13. "Minimum-assumed expenses" means the minimum expenses that may be used in calculating the disciplined current scale for a policy form and for which the insurer may annually designate one of the following methods to determine assumed expenses for all policy forms:
(a) Fully allocated expenses, which must be used if a generally recognized expense table is not approved.
(b) Marginal expenses, which may be used only if the marginal expenses are greater than a generally recognized expense table.
(c) A generally recognized expense table based on fully allocated expenses that represents a significant portion of insurance companies and that is approved by the director.
14. "Nonguaranteed elements" means the premiums, benefits, values, credits or charges under a policy of life insurance that are not guaranteed or not determined at issue.
15. "Nonterm group life" means a group policy or individual policies of life insurance that are issued to members of an employer group or other allowed group to which all of the following apply:
(a) The employer or other group representative selects every plan of coverage.
(b) Some portion of the premium is paid by the group or through payroll deduction.
(c) Group underwriting or simplified underwriting is used.
16. "Policyowner" means the owner who is named in the policy or the certificate holder in the case of a group policy.
17. "Policyowner value" includes the cash surrender values and other illustrated benefit amounts that are available at the policyowner's election.
18. "Premium outlay" means the amount of premium that is assumed to be paid by the policyowner or other premium payor out of pocket.
19. "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 on policy expiration if sooner, the accumulated value of all policy cash flows equals or exceeds the total policyowner value available.
20. "Supplemental illustration" means an illustration that is furnished in addition to a basic illustration and that may be presented in a different format from the basic illustration but that may depict only a scale of nonguaranteed elements as provided in the basic illustration.