§ 31-4705.02 — Standard nonforfeiture law — In general.

District of Columbia § 31-4705.02

• Jurisdiction: District of Columbia
• Title 31: Insurance and Securities.
• Ch. 47: Provisions Relating to All Life Insurance Companies.

Text

(1) Except as provided in subsections (i) and (j) of this section and for policies issued after the operative date of this section, no life insurance policy shall be issued or delivered in the District of Columbia unless it contains the following provisions or corresponding provisions which the Commissioner considers at least as favorable to the defaulting or surrendering policyholder as the following provisions;

(i) If the insured defaults on a premium payment after premiums have been paid 1 full year for ordinary insurance or 3 full years for industrial insurance, the company shall grant, upon proper request no later than 60 days after the premium became due, a paid-up nonforfeiture benefit on a plan stipulated in the policy, and the paid-up nonforfeiture benefit shall be effective when the premiums became due.

(ii) The company may substitute for the nonforfeiture benefit described in subparagraph (A)(i) of this paragraph an actuarially equal alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or a greater amount or earlier payment of endowment benefits.

(B) If the insured defaults on a premium payment after ordinary insurance premiums have been paid for 3 full years or industrial insurance premiums have been paid for 5 full years and surrenders the policy within 60 days after the premiums became due, the company shall pay a cash surrender value instead of paying a paid-up nonforfeiture benefit.

(C) A specified paid-up nonforfeiture benefit shall become effective unless the person entitled to make an election chooses another available option no later than 60 days after the defaulted premium became due.

(D) If all premium payments become paid or if the company continues the policy under a paid-up nonforfeiture benefit which became effective after the eve of the 3rd policy anniversary for ordinary insurance or after the eve of the 5th policy anniversary for industrial insurance, and if the insured surrenders the policy within 30 days after any policy anniversary, the company will pay a cash surrender value.

(i) For policies creating upon the guaranteed bases unscheduled changes in benefits or premiums or having an option for changes in benefits or premiums other than a change to a new policy, the policy shall describe or show the mortality table, the interest rate, and the method used to calculate cash surrender values and paid-up nonforfeiture benefits available under the policy.

(ii) For all other policies, the policy shall show the mortality table and the interest rate used to calculate the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value and paid-up nonforfeiture benefit available under the policy on each anniversary either during the first 20 policy years or during the term of the policy, whichever is shorter, and with the values and benefits calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the company on the policy.

(i) The policy shall provide a brief and general statement of the method to be used in calculating the cash surrender value and the paid-up nonforfeiture benefit available on any policy anniversary after the last anniversary treated in the policy according to the manner described in subparagraph (E)(ii) of this paragraph.

(ii) The brief statement shall explain how paid-up additions and indebtedness on the policy changes the cash surrender values and the paid-up nonforfeiture benefits.

(2) Any subsection (a) provision that does not apply to the plan of insurance in a policy may be omitted from the policy to the extent that the provision does not apply.

(3) The company shall reserve the right to defer the payment of any cash surrender value until 6 months after payment has been demanded and until the insured has surrendered the policy.

(1) Any cash surrender value available under subsection (a) of this section after a default on a premium due on a policy anniversary shall be at least the excess of the present value, on the anniversary, of the future guaranteed benefits which would have been provided by the policy and any existing paid-up additions, had there been no default, over the sum of the following:

(A) The then present value of the adjusted premiums described in subsections (d) and (e) of this section, corresponding to premiums which would have become due after the eve of the anniversary.

(B) The amount of any indebtedness to the company on the policy.

(2) For any policy issued after the operative date of subsection (e) of this section and which provides supplemental life insurance or annuity benefits at the option of the insured and for an additional premium by rider or by supplemental policy provision, the cash surrender value referred to in subsection (b)(1) of this section shall be at least the sum of the cash surrender value for an otherwise similar policy issued at the same age without the rider or the supplemental policy provision and the cash surrender value for a policy which provides only the benefits otherwise provided by the rider or the supplemental provision.

(3) For any family policy issued after the operative date of subsection (e) of this section and which defines a “primary insured” and provides term insurance on the life of the spouse of the primary insured for a period that shall expire before the spouse becomes 71, the cash surrender value referred to in subsection (b)(1) of this section shall be at least the sum of the cash surrender for an otherwise similar policy issued at the same age without the term insurance on the life of the spouse and the cash surrender value for a policy which provides only the benefits otherwise provided by the term insurance on the life of the spouse.

(4) Any cash surrender value available within 30 days after any policy anniversary on a policy paid up by completion of all premium payments or a policy continued under a paid-up nonforfeiture benefit shall be at least the present value, on the anniversary, of the future guaranteed benefits provided by the policy and any existing paid-up additions, decreased by any indebtedness to the company on the policy.

(c) Any paid-up nonforfeiture benefit available under a policy referred to in subsection (a) of this section after a default in a premium payment due on a policy anniversary shall be in a sufficient amount for the present value on the anniversary to be at least equal to the cash surrender value then provided by the policy or, if none is provided, the cash surrender value that would have been required by this section in the absence of the condition that premiums shall be paid for at least a specified period.

(1) This subsection shall not apply to policies issued after the operative date of subsection (e) of this section.

(2) Except as provided in paragraphs (2), (3), and (8) of this subsection, the adjusted premiums for any policy referred to in subsection (a) of this section shall be calculated on an annual basis and shall be a uniform percentage of the premiums for each policy year, excluding any extra premiums charged because of impairments or special hazards, and the adjusted premiums shall equal the sum of:

(A) The value, on the issuance date, of the future guaranteed benefits provided by the policy.

(B) Two per centum of the amount of insurance for uniform amounts of insurance or an equal amount for amounts of insurance that vary with the duration of the policy.

(C) Forty per centum of the adjusted premium for the 1st policy year.

(D) Twenty-five per centum of either the adjusted premium for the 1st policy year or the adjusted premium for a whole life policy of the same or equal uniform amount, with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less.

(3) For the percentages described in paragraph (2)(C) and (D) of this subsection, no adjusted premium shall exceed 4% of the amount of insurance.

(A) For a policy providing an amount of insurance varying with the duration of the policy, the equal uniform amount shall be the uniform amount of insurance provided by an otherwise similar policy that contained the same endowment benefits issued at the same age for the same term, with the benefits not varying with the duration of the policy and with the benefits valued the same on the date of issue as the benefits under the policy.

(B) For a policy providing a varying amount of insurance issued on the life of a child under age 10, the equal uniform amount may be computed as though the amount of insurance provided by the policy before the child became 10 was the amount of insurance provided at age 10.

(A) The adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provision shall equal the sum of the following:

(i) The adjusted premiums for an otherwise similar policy issued at the same age without the term insurance benefits.

(ii) For the period when premiums for the term insurance benefits become payable, the adjusted premiums for the term insurance.

(B) Except as provided in subparagraph (C) of this paragraph, the equation in subparagraph (A) of this paragraph shall be calculated separately and according to paragraphs (1), (2), and (3) of this subsection.

(C) For paragraph (2)(B), (C), and (D) of this subsection, the amount of insurance or equal uniform amount of insurance used to calculate the adjusted premiums referred to in subparagraph (A)(ii) of this paragraph shall equal the excess of the corresponding amount determined for the entire policy over the amount used to calculate the adjusted premiums described in subparagraph (A)(i) of this paragraph.

(A) Except as provided in subsections (d) and (e) of this section, paragraph (5)(B) and (C) of this subsection, and paragraph (8) of this subsection, all adjusted premiums and present values for ordinary insurance policies shall be calculated on the basis of the Commissioners 1941 Standard Ordinary Mortality Table.

(B) For ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age no more than 3 years younger than the actual age of the insured, and the calculations for all policies of industrial insurance shall be made on the basis of the 1941 Standard Industrial Mortality Table.

(i) All calculations shall be made on the basis of the rate of interest, not exceeding 3 1/2% per year, specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits.

(ii) In calculating the present value of any paid-up term insurance with accompanying pure endowment offered as a nonforfeiture benefit, the rates of mortality assumed shall not exceed 130% of the rates of mortality according to the applicable table.

(iii) For insurance issued on a substandard basis, the calculation of any adjusted premiums and present values may be based on another mortality table specified by the company and approved by the Commissioner.

(i) Except as provided in subparagraphs (B), (C), (D), and (E) of this paragraph and paragraph (8) of this subsection and for ordinary policies issued after the operative date of this paragraph, the adjusted premiums and present values shall be calculated on the basis of the Commissioners 1958 Standard Ordinary Mortality Table and the interest rate for calculating cash surrender values and paid-up nonforfeiture benefits shall be specified in the policy.

(ii) Except as provided in sub-subparagraph (iii) of this subparagraph, the interest rate shall not exceed 3 1/2% per year.

(iii) An interest not exceeding 5 1/2% per year may be used for policies issued after October 12, 1978.

(B) For ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age no more than 6 years younger than the actual age of the insured.

(C) In calculating the present value of a paid-up term insurance with pure endowment offered as a nonforfeiture benefit, the rates of mortality assumed may be no more than the rates in the Commissioners 1958 Extended Term Insurance Table.

(D) For insurance issued on a substandard basis, the calculation of adjusted premiums and present values may be based on another mortality table specified by the company and approved by the Commissioner.

(i) After June 27, 1960, a company may file with the Commissioner a written notice of the company’s election to comply with this paragraph after a specified date before January 1, 1966.

(ii) After filing the notice, then, on the specified date, this paragraph shall become operative for ordinary policies issued by the company.

(iii) If a company makes no election, then the operative date of the paragraph for the company shall be January 1, 1966.

(i) Except as provided in subparagraphs (B), (C), (D), and (E) of this paragraph and for industrial policies issued after the operative date of this paragraph, adjusted premiums and present values shall be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table and the interest rate for calculating cash surrender values and paid-up nonforfeiture benefits shall be specified in the policy.

(ii) Except as provided in subparagraph (A)(iii) of this paragraph, the interest rate shall not exceed 3 1/2% per year.

(iii) An interest rate not exceeding 5 1/2% per year may be used for policies issued after October 12, 1978.

(B) For individual insurance issued on female risks, adjusted premiums and present values may be calculated according to an age no more than 6 years younger than the actual age of the insured.

(C) In calculating the present value of any paid-up term insurance with pure endowment offered as a nonforfeiture benefit, the rates of mortality assumed shall be no more than the rates in the Commissioners 1961 Industrial Extended Term Insurance Table.

(D) For insurance issued on a substandard basis, the calculation of adjusted premiums and present values may be based on another mortality table specified by the company and approved by the Commissioner.

(i) After October 3, 1962, a company may file with the Commissioner a written notice of the company’s election to comply with this paragraph after a specified date before January 1, 1968.

(ii) After filing the notice, then, on the specified date, this paragraph shall become operative for the industrial policies issued by the company.

(iii) If a company makes no election, the operative date of this paragraph for the company shall be January 1, 1968.

(1) This subsection shall apply to all policies issued after the operative date of this subsection.

(2) Except as provided in paragraph (7) of this subsection, the adjusted premiums for a policy shall be calculated on an annual basis and shall be the uniform percentage of the policy premiums for each policy year.

(3) The adjusted premium shall exclude amounts payable as extra premiums to cover impairments or special hazards and shall also exclude a uniform annual contract change or policy fee described in the policy statement of the method used to calculate the cash surrender values and paid-up nonforfeiture benefits.

(4) The present value, on the issuance date, of all adjusted premiums shall be equal to the sum of the following:

(A) The then present value of the future guaranteed benefits provided for by the policy.

(B) One per centum of either the amount of insurance for uniform amounts of insurance or the average amount of insurance at the beginning of each of the first 10 policy years.

(C) One hundred twenty-five per centum of the nonforfeiture net level premium.

(5) For the percentage described in paragraph (4)(C) of this subsection, no nonforfeiture net level premium shall be considered in excess of 4% of either the amount of insurance for uniform amounts of insurance or the average amount of insurance at the beginning of each of the first 10 policy years.

(6) The policy shall issue when the rated age of the insured is determined.

(7) The nonforfeiture net level premium shall be equal to the present value, at the issuance date of the guaranteed benefits provided by the policy divided by the present value, on the issuance date, of an annuity of 1 per year payable when the policy issues and on each anniversary when a premium becomes due.

(8) For policies which create in a guaranteed basis unscheduled changes in benefits or premiums or which provide an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present value shall initially be calculated on the assumption that future benefits and premiums do not change from benefits and premiums established when the policy issues.

(9) When the benefits or premiums change, the future adjusted premiums, the nonforfeiture net level, and the present values shall be recalculated on the assumption that future benefits and premiums do not change from the benefits and premiums established by the change.

(10) Except as provided by paragraph (15) of this subsection, the recalculated future adjusted premiums for the policy shall be the uniform percentage of the future premiums for each policy.

(11) The recalculated future premiums shall exclude amounts payable as extra premiums to cover impairments and special hazards and shall also exclude a uniform annual contract charge or policy fee described on the policy in a statement of the method used to calculate the cash surrender values and paid-up nonforfeiture benefits.

(12) At the time of the change to new benefits or premiums, the present value of all the future adjusted premiums shall equal the excess of the sum described in subparagraph (A) of this paragraph over the amount described in subparagraph (B) of this paragraph.

(A) The then present value of the future guaranteed benefits provided by the policy and the additional expense allowance.

(B) The then cash surrender value or present value of paid-up nonforfeiture benefit under the policy.

(13) At the time of the change to the new benefits or premiums, the additional expense allowance shall be the sum of the following:

(A) One per centum of the difference, if positive, between the average amount of insurance at the beginning of each of the first 10 policy years after the change and the average amount of insurance before the change at the beginning of each of the first 10 years after the most recent previous change or, if there has been no previous change, the issuance date.

(B) One hundred twenty-five per centum of the increase in the nonforfeiture net level premium.

(14) The recalculated nonforfeiture net level premium shall equal the result obtained by dividing the equation described in subparagraph (A) of this paragraph with the amount described in subparagraph (B) of this paragraph.

(A) This amount equals the sum of the following:

(i) The nonforfeiture net level premium before the change multiplied by the present value of an annuity of 1 per year payable, after the change, on each anniversary of the policy where a premium would have fallen due had the change not occurred.

(ii) The present value of the increase in future guaranteed benefits provided by the policy.

(B) This amount equals the present value of an annuity of 1 per year payable, after the change, on each anniversary of the policy where a premium falls due.

(15) For a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, the policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, adjusted premiums and present values for the substandard policy may be calculated as if they were issued to provide the higher uniform amounts of insurance on the standard basis.

(i) Except as provided in subparagraphs (B) through (H) of this paragraph, adjusted premiums and present values shall for all policies of ordinary insurance be calculated on the basis of the Commissioners 1980 Standard Ordinary Mortality Table or, at the election of the company for any specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors.

(ii) Adjusted premiums and present values shall for all policies of industrial insurance be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table.

(iii) Adjusted premiums and present values shall for all policies issued in a particular calendar year be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate for policies issued in the calendar year.

(B) At the option of the company, calculations for all policies issued in a particular calendar year may be made on the basis of an interest rate not exceeding the nonforfeiture interest rate for policies issued in the immediately preceding calendar year.

(C) Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available shall be calculated on the basis of the mortality table and the interest rate used to determine the amount of the paid-up nonforfeiture benefit and the paid-up dividend additions.

(D) A company may calculate the guaranteed paid-up nonforfeiture benefit including any paid-up additions under the policy on the basis of an interest rate no lower than the rate specified in the policy for calculating cash surrender values.

(E) In calculating the present value of a paid-up term insurance with pure endowment offered as a nonforfeiture benefit, the rates of mortality assumed shall be no more than the rates in the Commissioners 1980 Extended Term Insurance Table for ordinary insurance policies and no more than the Commissioners 1961 Industrial Extended Term Insurance Table for industrial insurance policies.

(F) For insurance issued on a substandard basis, the calculation of any adjusted premiums and present values may be based on appropriate modifications of the tables described in subparagraph (E) of this paragraph.

(i) For policies issued before the operative date of the valuation manual, any Commissioners Standard Ordinary Mortality Tables adopted after 1980 by the National Association of Insurance Commissioners and by the Commissioner determining the minimum nonforfeiture standard may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table.

(ii) For policies issued on or after the operative date of the valuation manual, the valuation manual shall provide the Commissioners Standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table. If the Commissioner approves by regulation any Commissioners Standard Ordinary Mortality Table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, then that minimum nonforfeiture standard shall supersede the minimum nonforfeiture standard provided by the valuation manual.

(i) For policies issued before the operative date of the valuation manual, any Commissioners Standard Industrial Mortality Tables adopted after 1980 by the National Association of Insurance Commissioners and approved by the Commissioner for determining the minimum nonforfeiture standard may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table.

(ii) For policies issued on or after the operative date of the valuation manual, the valuation manual shall provide the Commissioners Standard Mortality Table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. If the Commissioner approves by regulation any Commissioners Standard Industrial Mortality Table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies or contracts issued on or after the operative date of the valuation manual, then that minimum nonforfeiture standard shall supersede the minimum nonforfeiture standard provided by the valuation manual.

(A) The nonforfeiture interest rate for policies issued before the operative date of the valuation manual in a particular calendar year shall be equal to 125% of the calendar year statutory valuation interest rate for the policy, as described in § 31-4701 , rounded to the nearest 1/4%; provided, that the nonforfeiture interest rate shall not be less than 4.00%.

(B) For policies issued on or after the operative date of the valuation manual, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be provided by the valuation manual.

(18) Any refiling of nonforfeiture values or their methods of computation for a previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of other provisions of the policy form.

(A) After March 14, 1985, a company may file with the Commissioner a written notice of the company’s election to comply with this subsection after a specified date before January 1, 1989, which shall be the operative date of this subsection for the category of insurance for the company.

(B) If a company makes no election for a category of insurance, the operative date for the category of insurance issued by the company shall be January 1, 1989.

(f) For life insurance with future premiums determined by the insurance company based on estimates of future experience or for life insurance with minimum values that cannot be determined according to subsections (a) through (e) of this section, the following requirements shall be complied with:

(1) The Commissioner shall be satisfied that the benefits are substantially as favorable to policyholders and insureds as the benefits required by subsections (a) through (e) of this section.

(2) The Commissioner shall be satisfied that the benefits and the pattern of premiums do not mislead prospective policyholders or insureds.

(3) The cash surrender values and paid-up nonforfeiture benefits shall not be less than the minimum values and benefits required by this section.

(1) Any cash surrender value and any paid-up nonforfeiture benefit, available after a default in the payment of a premium due other than on the policy anniversary, shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary.

(2) All values described in subsections (b) through (f) of this section may be calculated upon the assumption that any death benefit is payable at the end of the policy or contract year of death.

(3) Besides paid-up term additions, the net value of paid-up additions shall be at least the amounts used to provide the additions.

(A) Notwithstanding subsection (b) of this section, additional benefits payable under the following conditions shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits under this section:

(i) For death or dismemberment by accident.

(ii) For total and permanent disability.

(iii) Reversionary annuity or deferred reversionary annuity benefits.

(iv) Term insurance benefits provided by a rider or by a supplementary policy provision which if issued as a separate policy would not be under this section.

(v) Term insurance on the lives of children under a policy on the life of a parent of the children if the term insurance expires before a child’s age is 26, if the term insurance is uniform in amount after a child’s age is 1, and if the term insurance has not been paid up because of the parent’s death.

(vi) Other policy benefits in addition to life insurance, endowment benefits, and premiums for the additional benefits.

(B) No additional benefits described in paragraph (4)(A) of this subsection shall be required in paid-up nonforfeiture benefits.

(1) This subsection shall apply to policies issued after December 31, 1986.

(2) For uniform amounts of insurance, a cash surrender value available after a default on a premium due on a policy anniversary shall not differ by more than 1/5 of 1% of the amount of insurance from the sum of the following:

(A) Either zero or the basic cash value, whichever is greater.

(B) The present value of existing paid-up additions exceeding policy indebtedness to the company.

(3) For insurance amounts not treated in paragraph (2) of this subsection, a cash surrender value available after a default on a premium due on a policy anniversary shall not differ by more than 1/5 of 1% of the average insurance amounts at the beginning of the first 10 policy years from the sum of the following:

(A) Either zero or the basic cash value, whichever is greater.

(B) The present value of existing paid-up additions exceeding policy indebtedness to the company.

(A) Except as provided in subparagraphs (B) and (C) of this paragraph, the basic cash value shall equal the present value at the policy anniversary of the future guaranteed benefits exceeding the present value on nonforfeiture factors corresponding with premiums due after the eve of the anniversary.

(B) The future guaranteed benefits used to determine the basic cash value excludes existing paid-up additions and, where there has been no default in premium payments, would be computed without deducting indebtedness to the company.

(C) The basic cash value for supplemental life insurance, annuity benefits, or family coverage shall not be affected differently than cash surrender values described in subsections (b) and (d) of this section.

(A) The nonforfeiture factor for a policy year shall be a percentage of the adjusted premium for the policy year.

(B) Except as provided in paragraph (6) of this subsection, the adjusted premium percentage shall comply with the following:

(i) Except as provided in subparagraph (B)(ii) of this paragraph, the percentage cannot change during policy years between the 2nd policy anniversary and the 5th policy anniversary.

(ii) Unless the 5th anniversary precedes an anniversary when a cash surrender value without paid-up additions and without indebtedness deductions equal at least 1/5 of 1% of the amount described in subparagraph (iii) of this paragraph, the percentage cannot change during policy years between the 2nd anniversary and an anniversary with a cash surrender value, without the additions and the deductions, equaling at least 1/5 of 1% of the subparagraph (iii) amount.

(iii) The average amount of insurance at the beginning of the first 10 policy years.

(iv) After the latest anniversary referred to in subparagraph (B)(ii) of this paragraph, or the 5th policy anniversary if later, no percentage may apply to fewer than 5 consecutive policy years.

(6) The basic cash value shall exceed the amount that would result in the paragraph (4) formula by replacing the nonforfeiture factors with adjusted premiums.

(A) Adjusted premiums and present values shall be calculated on the mortality and interest rate bases permitted by the Life Insurance Amendments Reform Act of 1984.

(B) The cash surrender values all include endowment benefits under the policy.

(A) Except for a defaulted premium due on a policy anniversary, a cash surrender value and a paid-up nonforfeiture benefit arising from a premium default shall be determined consistently with subsections (a) through (g) of this section.

(B) The cash surrender values and the paid up nonforfeiture benefits granted with additional benefits shall conform with this subsection.

(1) After February 19, 1948, a company, in writing, may inform the Commissioner of the company’s election to comply with this section after an expressly selected date before January 1, 1950.

(2) After filing the notice described in paragraph (1) of this subsection, this section shall govern the policies and the contracts issued by the company after the date.

(3) Except as provided in paragraph (4) of this subsection and if a company does not choose a date, then, beginning January 1, 1950, this section shall govern the company.

(4) Subsection (d)(6) and (7) of this section and subsection (e) of this section expressly establish dates when those provisions govern a company.

(1) This section shall not apply to the following:

(A) Reinsurance.

(B) Group insurance.

(C) Pure endowment.

(D) Annuity or reversionary annuity contract.

(E) Uniform amounts of term policy, with no guaranteed nonforfeiture or endowment benefits and with no renewal of guaranteed nonforfeiture or endowment benefits, for a term that lasts no more than 20 years and that expires before the insured becomes age 71, and with premiums payable throughout the policy term.

(F) Decreasing amounts of term policy with no guaranteed nonforfeiture or endowment benefits, with adjusted premiums under subsections (d) and (e) of this section exceeded by adjusted premiums for uniform amounts of term policy, for a term that lasts no more than 20 years and that expires before the insured becomes age 71, and for a policy issued at the same age and for the same initial amount of insurance as originally provided by the policy.

(G) A policy with guaranteed nonforfeiture or endowment benefits with no cash value or present value of a paid-up nonforfeiture benefit at the beginning of a policy year exceeding 2 1/2% of the amount of insurance at the beginning of the policy year.

(H) A policy delivered outside the District of Columbia by an agent of the company.

(2) For this section, the expiration age for joint term life insurance shall be the age of the oldest life when the insurance expires.

(k) For the purposes of this section, the term "operative date of the valuation manual" means the valuation as described in § 31-4701 .

Legislative History

June 19, 1934, ch. 672, ch. V, § 5b; Feb. 19, 1948, 62 Stat. 30, ch. 66, § 4; June 27, 1960, 74 Stat. 228, Pub. L. 86-530, § 2; Oct. 3, 1962, 76 Stat. 712, Pub. L. 87-738, § 2; Oct. 13, 1978, D.C. Law 2-120, §§ 6 to 8, 25 DCR 1519; Mar. 14, 1985, D.C. Law 5-160, § 3(f), 32 DCR 39; Feb. 24, 1987, D.C. Law 6-192, § 25(e)-(g), 33 DCR 7836; May 21, 1997, D.C. Law 11-268, § 10(j), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81, § 23(a), 45 DCR 745