A. The format of a basic illustration shall conform with the following requirements:
1. The basic illustration shall be labeled with the date on which the illustration was prepared.
2. Each page, including any explanatory notes or pages, shall be numbered. The page numbers must show the relationship to the total number of pages in the illustration.
3. The assumed dates of payment receipt and benefit payout within a policy year shall be clearly identified.
4. If the age of the proposed insured is shown as a component of the tabular detail, the proposed insured's age must be shown as the issue age plus the number of years the policy is assumed to have been in force.
5. The assumed payments on which the illustrated benefits and values are based shall be identified as premium outlay or contract premium, as applicable. For policies that do not require a specific contract premium, the illustrated payments shall be identified as premium outlay.
6. Guaranteed death benefits and values available on surrender, if any, for the illustrated premium outlay or contract premium shall be shown and clearly labeled guaranteed.
7. If the illustration shows any nonguaranteed elements, those elements cannot be based on a scale more favorable to the policyowner than the insurer's illustrated scale at any duration. These elements shall be clearly labeled nonguaranteed.
8. The guaranteed elements, if any, shall be shown before any nonguaranteed elements and shall be specifically referred to on any page of an illustration that shows or describes the nonguaranteed elements only.
9. The account or accumulation value of a policy, if shown, shall be identified by the name this value is given in the policy being illustrated and shall be shown in close proximity to the corresponding value that is available on surrender.
10. The value that is available on surrender shall be identified by the name this value is given in the policy being illustrated and shall be the amount that is available to the policyowner in a lump sum after deducting surrender charges, policy loans and policy loan interest, as applicable.
11. Illustrations may show policy benefits and values in graphic or chart form in addition to tabular form.
12. Any illustration of nonguaranteed elements shall be accompanied by a statement indicating all of the following:
(a) The benefits and values are not guaranteed.
(b) The assumptions on which the nonguaranteed elements are based are subject to change by the insurer.
(c) The actual results may be more or less favorable.
13. If the illustration shows that the premium payor may have the option to allow policy charges to be paid using nonguaranteed values, the illustration must clearly disclose that a charge continues to be required and that, depending on actual results, the premium payor may need to continue or resume premium outlays. A similar disclosure shall be made for premium outlay of lesser amounts or shorter durations than the contract premium. If a contract premium is due, the premium outlay display may not be left blank or show a zero unless the premium outlay display is accompanied by an asterisk or similar mark to draw attention to the fact that the policy is not paid up.
14. If the applicant plans to use dividends or policy values, guaranteed or nonguaranteed, to pay all or a portion of the contract premium or policy charges or for any other purpose, the illustration may reflect those plans and the impact on future policy benefits and values.
B. A basic illustration shall contain a narrative summary that includes the following:
1. A brief description of the policy being illustrated that includes a statement that the policy is a life insurance policy.
2. A brief description of the premium outlay or contract premium, as applicable, for the policy. For a policy that does not require payment of a specific contract premium, the illustration shall show the premium outlay that must be paid to guarantee coverage for the term of the contract, subject to maximum premiums allowable to qualify as a life insurance policy under the applicable provisions of the internal revenue code.
3. A brief description of each policy feature, rider or option, guaranteed or nonguaranteed, that is shown in the basic illustration and the impact they may have on the benefits and values of the policy.
4. An identification and brief definition of column headings and key terms that are used in the illustration.
5. A statement that contains in substance the following: "this illustration assumes that the currently illustrated nonguaranteed elements will continue unchanged for all years shown, which is likely not to occur. The actual results may be more or less favorable than the ones shown in this illustration."
C. Following the narrative summary, a basic illustration shall include a numeric summary of the death benefits and values and the premium outlay and contract premium, as applicable. For a policy that provides for a contract premium, the guaranteed death benefits and values shall be based on the contract premium. This summary shall be shown for at least policy years five, ten and twenty and at age seventy, if applicable, on the three bases listed in subsection D of this section. For multiple life policies, the numeric summary shall show policy years five, ten, twenty and thirty.
D. For the purposes of the numeric summary under subsection C of this section, all of the following apply:
1. The three bases include:
(a) Policy guarantees.
(b) Insurer's illustrated scale.
(c) Insurer's illustrated scale used but with the nonguaranteed elements reduced as follows:
(i) Dividends at fifty percent of the dividends that are contained in the illustrated scale used.
(ii) Nonguaranteed credited interest at rates that are the average of the guaranteed rates and the rates that are contained in the illustrated scale used.
(iii) All nonguaranteed charges, including term insurance charges, mortality and expense charges, at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used.
2. If coverage ceases before the policy matures or when the policyowner reaches one hundred years of age, the year in which coverage ceases shall be identified for each of the three bases listed in paragraph 1 of this subsection.
E. Statements that are substantially similar to the following shall be included on the same page as the numeric summary and shall be signed by the applicant or, if an illustration is provided at the time of delivery, by the policyholder:
1. A statement to be signed and dated by the applicant or policyowner that states: "I have received a copy of this illustration and understand that any nonguaranteed elements illustrated are subject to change and could be either higher or lower. The agent has told me they are not guaranteed."
2. A statement to be signed and dated by the insurance producer or other authorized representative of the insurer that states: "I certify that this illustration has been presented to the applicant and that I have explained that any nonguaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration."
F. All of the following tabular details apply to a basic illustration:
1. The basic illustration shall include all of the following for at least each policy year from year one to ten and for every fifth policy year thereafter until the insured reaches one hundred years of age, policy maturity or final expiration and, except for term insurance beyond the twentieth year, for any year in which the premium outlay and contract premium, if applicable, is subject to change:
(a) The premium outlay and mode the applicant plans to pay and the contract premium, as applicable.
(b) The corresponding guaranteed death benefit, as provided in the policy.
(c) The corresponding guaranteed value that is available on surrender, as provided in the policy.
2. For a policy that provides for a contract premium, the guaranteed death benefit and value that is available on surrender shall correspond to the contract premium.
3. Nonguaranteed elements may be shown if the nonguaranteed elements are described in the contract. An illustration for a policy for which the insurer intends to credit terminal dividends, the nonguaranteed elements may be shown if the insurer's current practice is to pay terminal dividends. If any nonguaranteed elements are shown, the nonguaranteed elements must be shown at the same durations as the corresponding guaranteed elements, if any. If a guaranteed benefit or value is not available at any duration for which a nonguaranteed benefit or value is shown, a zero shall be displayed in the guaranteed column.