§ 508.37 — Standard nonforfeitures — life insurance

Iowa § 508.37

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 508: LIFE INSURANCE COMPANIES

Text

This section shall be known as the “Standard Nonforfeiture Law for Life Insurance”.
1. As used in this section, “operative date of the valuation manual” means the same as
provided in section 508.36, subsection 14.
2. In the case of policies issued on or after the operative date of this section as defined
in subsection 12, a policy of life insurance shall not, except as stated in subsection 11, be
delivered or issued for delivery in this state unless it contains in substance the following
provisions, or corresponding provisions which in the opinion of the commissioner are at least
as favorable to the defaulting or surrendering policyholder as the following provisions and
are essentially in compliance with subsection 10:
a. That, in the event of default in any premium payment, the company will grant, upon
properrequestnotlaterthansixtydaysaftertheduedateofthepremiumindefault, apaid-up
nonforfeiture benefit on a plan stipulated in the policy, effective as of the due date of the
premium in default, and of an amount as specified in this section. In lieu of the stipulated
paid-upnonforfeiturebenefit,thecompanymaysubstitute,uponproperrequestnotlaterthan
sixty days after the due date of the premium in default, an actuarially equivalent alternative
paid-up nonforfeiture benefit which provides a greater amount or longer period of death
benefits or, if applicable, a greater amount or earlier payment of endowment benefits.
b. That, upon surrender of the policy within sixty days after the due date of any premium
payment in default after premiums have been paid for at least three full years in the case of
ordinary insurance or five full years in the case of industrial insurance, the company will pay,
in lieu of any paid-up nonforfeiture benefit, a cash surrender value of an amount as may be
specified in this section.
c. That a specified paid-up nonforfeiture benefit shall become effective as specified in the
policy unless the person entitled to make an election elects another available option not later
than sixty days after the due date of the premium in default.
d. That, if the policy has become paid up by completion of all premium payments or if it

is continued under any paid-up nonforfeiture benefit which became effective on or after the
third policy anniversary in the case of ordinary insurance or the fifth policy anniversary in
the case of industrial insurance, the company will pay, upon surrender of the policy within
thirty days after any policy anniversary, a cash surrender value of an amount as specified in
this section.
e. In the case of policies which cause on a basis guaranteed in the policy 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, a statement of the mortality table, interest
rate, and method used in calculating cash surrender values and the paid-up nonforfeiture
benefits available under the policy. In the case of all other policies, a statement of the
mortality table and interest rate used in calculating the cash surrender values and the
paid-up nonforfeiture benefits available under the policy, together with a table showing the
cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the
policy on each policy anniversary, either during the first twenty policy years or during the
term of the policy, whichever is shorter, the values and benefits to be 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.
f. A statement that the cash surrender values and the paid-up nonforfeiture benefits
available under the policy are not less than the minimum values and benefits required by or
pursuant to the insurance law of the state in which the policy is delivered; an explanation of
the manner in which the cash surrender values and the paid-up nonforfeiture benefits are
altered by the existence of any paid-up additions credited to the policy or any indebtedness
to the company on the policy; if a detailed statement of the method of computation of the
values and benefits shown in the policy is not stated in the policy, a statement that the
method of computation has been filed with the insurance supervisory official of the state
in which the policy is delivered; and a statement of the method to be used in calculating
the cash surrender value and paid-up nonforfeiture benefit available under the policy on
any policy anniversary beyond the last anniversary for which such values and benefits are
consecutively shown in the policy.
3. Any of the provisions or portions of provisions set forth in subsection 2 which are not
applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from
the policy. The company shall reserve the right to defer the payment of any cash surrender
value for a period of six months after demand with surrender of the policy.
4. a. Any cash surrender value available under the policy in the event of default in a
premium payment due on any policy anniversary, whether or not required by subsection 2,
shall be an amount not less than the excess, if any, of the present value, on that anniversary,
of the future guaranteed benefits which would have been provided for by the policy, including
any existing paid-up additions, if there had been no default, over the sum of the then
present value of the adjusted premiums as defined in subsections 6 and 7, corresponding to
premiums which would have fallen due on and after that anniversary, plus the amount of
any indebtedness to the company on the policy.
b. However, for a policy issued on or after the operative date of subsection 7 as defined
in paragraph “k” of that subsection, which provides supplemental life insurance or annuity
benefits at the option of the insured and for an identifiable additional premium by rider or
supplemental policy provision, the cash surrender value referred to in paragraph “a” shall be
an amount not less than the sum of the cash surrender value as defined in that paragraph
for an otherwise similar policy issued at the same age without such rider or supplemental
policy provision and the cash surrender value as defined in that paragraph for a policy which
provides only the benefits otherwise provided by such rider or supplemental policy provision.
c. Provided further that for a family policy issued on or after the operative date of
subsection 7 as defined in paragraph “k” of that subsection, which defines a primary insured
and provides term insurance on the life of the spouse of the primary insured expiring before
the spouse’s age seventy-one, the cash surrender value referred to in paragraph “a” shall be
an amount not less than the sum of the cash surrender value as defined in paragraph “a” for
an otherwise similar policy issued at the same age without term insurance on the life of the

spouse and the cash surrender value as defined in paragraph “a” for a policy which provides
only the benefits otherwise provided by the term insurance on the life of the spouse.
d. Any cash surrender value available within thirty days after any policy anniversary
under any policy paid up by completion of all premium payments or any policy continued
under any paid-up nonforfeiture benefit, whether or not required by subsection 2, shall be
an amount not less than the present value, on the anniversary, of the future guaranteed
benefits provided for by the policy, including any existing paid-up additions, decreased by
any indebtedness to the company on the policy.
5. Any paid-up nonforfeiture benefit available under the policy in the event of default in
a premium payment due on any policy anniversary shall be such that its present value as of
that anniversary shall be at least equal to the cash surrender value then provided for by the
policy or, if none is provided for, that cash surrender value which would have been required
by this section in the absence of the condition that premiums shall have been paid for at least
a specified period.
6. a. (1) This subsection does not apply to policies issued on or after the operative date of
subsection 7 as defined in paragraph “k” of that subsection. Except as provided in paragraph
“c”, the adjusted premiums for any policy shall be calculated on an annual basis and shall be
such uniform percentage of the respective premiums specified in the policy for each policy
year, excluding any extra premiums charged because of impairments or special hazards, that
the present value, at the date of issue of the policy, of all such adjusted premiums is equal to
the sum of the following:
(a) The then present value of the future guaranteed benefits provided for by the policy.
(b) Two percent of the amount of the insurance, if the insurance is uniform in amount,
or of the equivalent uniform amount, as defined in paragraph “b”, if the amount of insurance
varies with duration of the policy.
(c) Forty percent of the adjusted premium for the first policy year.
(d) Twenty-five percent of either the adjusted premium for the first policy year or the
adjusted premium for a whole life policy of the same uniform or equivalent uniform amount
with uniform premiums for the whole of life issued at the same age for the same amount of
insurance, whichever is less.
(2) However, in applying the percentages specified in subparagraph (1), subparagraph
divisions (c) and (d), no adjusted premium shall be deemed to exceed four percent of the
amount of insurance or an equivalent uniform amount. The date of issue of a policy for the
purpose of this subsection is the date as of which the rated age of the insured is determined.
b. In the case of a policy providing an amount of insurance varying with duration of the
policy, the equivalent uniform amount for the purpose of this subsection shall be deemed to
be the uniform amount of insurance provided by an otherwise similar policy, containing the
same endowment benefit or benefits, if any, issued at the same age and for the same term,
the amount of which does not vary with duration and the benefits under which have the same
presentvalueatthedateofissueasthebenefitsunderthepolicy, providedthatinthecaseofa
policy providing a varying amount of insurance issued on the life of a child under age ten, the
equivalent uniform amount may be computed as though the amount of insurance provided by
thepolicypriortotheattainmentofagetenweretheamountprovidedbythepolicyatageten.
c. The adjusted premiums for a policy providing term insurance benefits by rider or
supplemental policy provision shall be equal to (1) the adjusted premiums for an otherwise
similar policy issued at the same age without such term insurance benefits, increased during
the period for which premiums for such term insurance benefits are payable, by (2) the
adjusted premiums for such term insurance, the foregoing items (1) and (2) being calculated
separately and as specified in paragraphs “a” and “b” of this subsection except that, for the
purposes of paragraph “a”, subparagraph (1), subparagraph divisions (b), (c), and (d), the
amount of insurance or equivalent uniform amount of insurance used in the calculation of
the adjusted premiums referred to in item (2) in this paragraph shall be equal to the excess
of the corresponding amount determined for the entire policy over the amount used in the
calculation of the adjusted premiums in item (1) in this paragraph.
d. (1) All adjusted premiums and present values referred to in this section shall for
policies of ordinary insurance be calculated on the basis of the commissioners 1958 standard

ordinary mortality table, provided that for any category of ordinary insurance issued on
female risks, adjusted premiums and present values may be calculated according to an age
not more than six years younger than the actual age of the insured. The calculations for all
policies of industrial insurance issued before January 1, 1968, shall be made on the basis
of the 1941 standard industrial mortality table, except that a company may file with the
commissioner a written notice of its election that the adjusted premiums and present values
shall be calculated on the basis of the commissioners 1961 standard industrial mortality
table, after a specified date before January 1, 1968. Whether or not any election has been
made, the commissioners 1961 standard industrial mortality table shall be the basis for
these calculations as to all policies of industrial insurance issued on or after January 1,
1968. All calculations shall be made on the basis of the rate of interest specified in the policy
for calculating cash surrender values and paid-up nonforfeiture benefits, provided that the
rate of interest shall not exceed three and one-half percent per annum, except that a rate
of interest not exceeding four percent per annum may be used for policies issued on or
after July 1, 1974, and prior to January 1, 1980, and a rate of interest not exceeding five and
one-half percent per annum may be used for policies issued on or after January 1, 1980.
(2) However, in calculating the present value under subparagraph (1) of any paid-up term
insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the
rates of mortality assumed in the case of policies of ordinary insurance, may be not more
than those shown in the commissioners 1958 extended term insurance table, and in the case
of policies of industrial insurance, may be not more than one hundred thirty percent of the
rates of mortality according to the 1941 standard industrial mortality table, except that when
the commissioners 1961 standard industrial mortality table becomes applicable as specified
in this paragraph, the rates of mortality assumed may be not more than those shown in the
commissioners 1961 industrial extended term insurance table. In addition, for insurance
issued on a substandard basis, the calculation under subparagraph (1) of adjusted premiums
and present values may be based on any other table of mortality that is specified by the
company and approved by the commissioner.
7. a. (1) This subsection applies to all policies issued on or after the operative date
of this subsection, as defined in paragraph “k”. Except as provided in paragraph “g”, the
adjusted premiums for a policy shall be calculated on an annual basis and shall be such
uniform percentage of the respective premiums specified in the policy for each policy year,
excluding amounts payable as extra premiums to cover impairments or special hazards and
also excluding any uniform annual contract charge or policy fee specified in the policy in
a statement of the method to be used in calculating the cash surrender values and paid-up
nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted
premiums is equal to the sum of the following:
(a) The then present value of the future guaranteed benefits provided for by the policy.
(b) One percent of either the amount of insurance, if the insurance is uniform in amount,
or the average amount of insurance at the beginning of each of the first ten policy years.
(c) One hundred twenty-five percent of the nonforfeiture net level premium, as defined in
paragraph “b”. However, in applying this percentage a nonforfeiture net level premium shall
not be deemed to exceed four percent of either the amount of insurance, if the insurance is
uniform in amount, or the average amount of insurance at the beginning of each of the first
ten policy years.
(2) The date of issue of a policy for the purpose of this subsection is the date as of which
the rated age of the insured is determined.
b. The nonforfeiture net level premium shall be equal to the present value, at the date of
issueofthepolicy, oftheguaranteedbenefitsprovidedforbythepolicydividedbythepresent
value, at the date of issue of the policy, of an annuity of one per annum payable on the date
of issue of the policy and on each anniversary of the policy on which a premium falls due.
c. In the case of policies which on a basis guaranteed in the policy cause 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 values
shall initially be calculated on the assumption that future benefits and premiums do not
change from those stipulated at the date of issue of the policy. At the time of a change in the

benefits or premiums, the future adjusted premiums, nonforfeiture net level premiums, and
present values shall be recalculated on the assumption that future benefits and premiums do
not change from those stipulated by the policy immediately after the change.
d. Except as otherwise provided in paragraph “g”, the recalculated future adjusted
premiums for a policy shall be such uniform percentage of the respective future premiums
specified in the policy for each policy year, excluding amounts payable as extra premiums
to cover impairments and special hazards, and also excluding any uniform annual contract
charge or policy fee specified in the policy in a statement of the method to be used in
calculating the cash surrender values and paid-up nonforfeiture benefits, that the present
value, at the time of change to the newly defined benefits or premiums, of all future adjusted
premiums is equal to the excess of the sum of the then present value of the then future
guaranteed benefits provided for by the policy plus the additional expense allowance, if any,
over the then cash surrender value, if any, or present value of any paid-up nonforfeiture
benefit under the policy.
e. The additional expense allowance, at the time of the change to the newly defined
benefits or premiums, shall be the sum of one percent of the excess, if positive, of the
average amount of insurance at the beginning of each of the first ten policy years subsequent
to the change over the average amount of insurance prior to the change at the beginning of
each of the first ten policy years subsequent to the time of the most recent previous change,
or, if there has been no previous change, the date of issue of the policy, plus one hundred
twenty-five percent of the increase, if positive, in the nonforfeiture net level premium.
f. Therecalculatednonforfeiturenetlevelpremiumshallbeequaltotheresultobtainedby
dividing the amount described in subparagraph (1) by the amount described in subparagraph
(2), where subparagraph (1) and subparagraph (2) are as follows:
(1) The sum of the nonforfeiture net level premium applicable prior to the change times
the present value of an annuity of one per annum payable on each anniversary of the policy
on or subsequent to the date of the change on which a premium would have fallen due had
the change not occurred, plus the present value of the increase in future guaranteed benefits
provided for by the policy.
(2) The present value of an annuity of one per annum payable on each anniversary of the
policy on or subsequent to the date of change on which a premium falls due.
g. Notwithstandinganycontraryprovisionofthissubsection, inthecaseofapolicyissued
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
premiumsandpresentvaluesforthesubstandardpolicymaybecalculatedasifitwereissued
to provide those higher uniform amounts of insurance on the standard basis.
h. Adjusted premiums and present values referred to in this section shall for all policies
of ordinary insurance be calculated on the basis of either the commissioners 1980 standard
ordinary mortality table or, at the election of the company for any one or more specified plans
of life insurance, the commissioners 1980 standard ordinary mortality table with ten-year
select mortality factors; shall for all policies of industrial insurance be calculated on the basis
of the commissioners 1961 standard industrial mortality table; and 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 as defined in paragraph “i” for policies issued in that calendar year.
However:
(1) At the option of the company, calculations for all policies issued in a particular
calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture
interest rate, as defined in paragraph “i”, for policies issued in the immediately preceding
calendar year.
(2) Under any paid-up nonforfeiture benefit, including any paid-up dividend additions,
any cash surrender value available, whether or not required by subsection 2, shall be
calculated on the basis of the mortality table and rate of interest used in determining the
amount of the paid-up nonforfeiture benefit and paid-up dividend additions, if any.
(3) A company may calculate the amount of any guaranteed paid-up nonforfeiture benefit

including any paid-up additions under the policy on the basis of an interest rate no lower than
that specified in the policy for calculating cash surrender values.
(4) In calculating the present value of any paid-up term insurance with accompanying
pureendowment,ifany,offeredasanonforfeiturebenefit,theratesofmortalityassumedmay
be not more than those shown in the commissioners 1980 extended term insurance table for
policiesofordinaryinsuranceandnotmorethanthecommissioners1961industrialextended
term insurance table for policies of industrial insurance.
(5) For insurance issued on a substandard basis, the calculation of adjusted premiums
and present values may be based on appropriate modifications of the tables referred to in
this paragraph.
(6) For policies issued prior to the operative date of the valuation manual, any
commissioners standard ordinary mortality tables adopted after 1980 by the national
association of insurance commissioners and approved by rule adopted by the commissioner
for use in 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.
(7) 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 forfeiture 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 rule
the commissioners standard ordinary 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 supersedes the minimum nonforfeiture standard provided
by the valuation manual.
(8) Any industrial mortality tables adopted after 1980 by the national association of
insurance commissioners and approved by rule adopted by the commissioner for use in
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.
(9) For policies issued on or after the operative date of the valuation manual, the
valuation manual shall provide the commissioners standard ordinary 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 rule any commissioners
standard industrial mortality table adopted by the national association of insurance
commissionersforuseindeterminingtheminimumnonforfeiturestandardforpoliciesissued
on or after the operative date of the valuation manual, then that minimum nonforfeiture
standard supersedes the minimum nonforfeiture standard provided by the valuation manual.
i. The nonforfeiture interest rate is defined as follows:
(1) For policies issued prior to the operative date of the valuation manual, the
nonforfeiture interest rate per annum for any policy issued in a particular calendar year
shall be equal to one hundred twenty-five percent of the calendar year statutory valuation
interest rate for the policy as defined in section 508.36, rounded to the nearest one quarter
of one percent, provided, however, that the nonforfeiture interest rate shall not be less than
four percent.
(2) 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.
j. Notwithstanding any contrary provision of the insurance laws of this state, any refiling
of nonforfeiture values or their methods of computation for any 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 any other provisions of that policy form.
k. After the effective date of this subsection, a company may file with the commissioner
a written notice of its election to comply with this subsection after a specified date before

January 1, 1989, which shall be the operative date of this subsection for that company. If a
company makes no election, the operative date of this subsection for the company is January
1, 1989.
8. In the case of any plan of life insurance which provides for future premium
determination, the amounts of which are to be determined by the insurance company based
on then estimates of future experience, or in the case of any plan of life insurance which is
of such a nature that minimum values cannot be determined by the methods described in
subsection 2, 3, 4, 5, 6, or 7, then all of the following conditions must be met:
a. The commissioner must be satisfied that the benefits provided under the plan are
substantially as favorable to policyholders and insureds as the minimum benefits otherwise
required by subsection 2, 3, 4, 5, 6, or 7.
b. The commissioner must be satisfied that the benefits and the pattern of premiums of
that plan are not misleading to prospective policyholders or insureds.
c. The cash surrender values and paid-up nonforfeiture benefits provided by the plan
must not be less than the minimum values and benefits required for the plan computed by a
method consistent with the principles of this section, as determined by rules adopted by the
commissioner.
9. Any cash surrender value and any paid-up nonforfeiture benefit, available under the
policy in the event of default in a premium payment due at any time 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. All values referred to in
subsections 4, 5, 6, and 7 may be calculated upon the assumption that any death benefit
is payable at the end of the policy year of death. The net value of any paid-up additions,
other than paid-up term additions, shall be not less than the amounts used to provide the
additions. Notwithstanding subsection 4, additional benefits payable in the event of death
or dismemberment by accident or accidental means, or in the event of total and permanent
disability, or as reversionary annuity or deferred reversionary annuity benefits, or as term
insurance benefits provided by a rider or supplemental policy provision to which, if issued
as a separate policy, this section would not apply, or as term insurance on the life of a child
or on the lives of children provided in a policy on the life of a parent of the child, if the term
insurance expires before the child’s age is twenty-six, is uniform in amount after the child’s
age is one, and has not become paid up by reason of the death of a parent of the child, or as
other policy benefits additional to life insurance and endowment benefits, and the premiums
for all of these additional benefits, shall be disregarded in ascertaining cash surrender values
andnonforfeiturebenefitsrequiredbythissection, andnoneoftheseadditionalbenefitsshall
be required to be included in any paid-up nonforfeiture benefits.
10. a. This subsection, in addition to all other applicable subsections of this section,
applies to all policies issued on or after January 1, 1985. Any cash surrender value available
under the policy in the event of default in a premium payment due on any policy anniversary
shall be in an amount which does not differ by more than two-tenths of one percent of either
the amount of insurance, if the insurance is uniform in amount, or the average amount of
insurance at the beginning of each of the first ten policy years, from the sum of the greater of
zero and the basic cash value specified in paragraph “b” plus the present value of any existing
paid-up additions less the amount of any indebtedness to the company under the policy.
b. Thebasiccashvalueshallbeequaltothepresentvalue,ontheanniversary,ofthefuture
guaranteedbenefitswhichwouldhavebeenprovidedforbythepolicy, excludinganyexisting
paid-upadditionsandbeforedeductionofanyindebtednesstothecompany, iftherehadbeen
no default, less the then present value of the nonforfeiture factors, as defined in paragraph
“c”, corresponding to premiums which would have fallen due on and after the anniversary.
However,theeffectsonthebasiccashvalueofsupplementallifeinsuranceorannuitybenefits
or of family coverage, as described in subsection 4 or 6, whichever is applicable, shall be
the same as the effects specified in subsection 4 or 6, whichever is applicable, on the cash
surrender values defined in that subsection.
c. (1) The nonforfeiture factor for each policy year shall be an amount equal to a
percentage of the adjusted premium for the policy year, as defined in subsection 6 or 7,

whichever is applicable. Except as is required by subparagraph (2) of this paragraph, this
percentage must satisfy both of the following requirements:
(a) It must be the same percentage for each policy year between the second policy
anniversary and the later of the fifth policy anniversary or the first policy anniversary
at which there is available under the policy a cash surrender value in an amount, before
includinganypaid-upadditionsandbeforedeductinganyindebtedness, ofatleasttwo-tenths
of one percent of either the amount of insurance, if the insurance is uniform in amount, or
the average amount of insurance at the beginning of each of the first ten policy years.
(b) It must be such that no percentage after the later of the two policy anniversaries
specified in division (a) of this subparagraph may apply to fewer than five consecutive policy
years.
(2) A basic cash value shall not be less than the value which would be obtained if the
adjusted premiums for the policy, as defined in subsection 6 or 7, whichever is applicable,
were substituted for the nonforfeiture factors in the calculation of the basic cash value.
d. Adjusted premiums and present values referred to in this subsection shall for a
particular policy be calculated on the same mortality and interest bases as are used in
demonstrating the policy’s compliance with the other subsections of this section. The
cash surrender values referred to in this subsection shall include any endowment benefits
provided for by the policy.
e. Any cash surrender value available other than in the event of default in a premium
payment due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit
available under the policy in the event of default in a premium payment, shall be determined
in manners consistent with the manners specified for determining the analogous minimum
amounts in subsections 2, 3, 4, 5, 7, and 9. The amounts of any cash surrender values and
of any paid-up nonforfeiture benefits granted in connection with additional benefits such as
those described in subsection 8 shall conform with the principles of this subsection.
11. a. This section does not apply to any of the following:
(1) Reinsurance.
(2) Group insurance.
(3) Pure endowment contracts.
(4) Annuity or reversionary annuity contracts.
(5) A term policy of uniform amount which provides no guaranteed nonforfeiture or
endowment benefits, or a renewal thereof of twenty years or less expiring before age
seventy-one, for which uniform premiums are payable during the entire term of the policy.
(6) A term policy of decreasing amount, which provides no guaranteed nonforfeiture or
endowment benefits, on which each adjusted premium, calculated as specified in subsections
6 and 7, is less than the adjusted premium so calculated, on a term policy of uniform amount,
or renewal thereof, which provides no guaranteed nonforfeiture or endowment benefits,
issued at the same age and for the same initial amount of insurance and for a term of twenty
years or less expiring before age seventy-one, for which uniform premiums are payable
during the entire term of the policy.
(7) A policy, which provides no guaranteed nonforfeiture or endowment benefits, for
whichnocashsurrendervalue, ifany, orpresentvalueofanypaid-upnonforfeiturebenefit, at
the beginning of any policy year, calculated as specified in subsections 4, 5, 6, and 7, exceeds
two and one-half percent of the amount of insurance at the beginning of the same policy year.
(8) A policy delivered outside this state through an agent or other representative of the
company issuing the policy.
b. Forpurposesofdeterminingtheapplicabilityofthissection, theageatexpiryforajoint
term life insurance policy shall be the age at expiry of the oldest life.
12. After July 4, 1963, a company may file with the commissioner a written notice of its
election to comply with this section after a specified date before January 1, 1966. The date
specified by the company in the notice shall be the operative date of this section for the
company, and this section shall apply to policies issued after that date by the company. If

a company makes no election, the operative date of this section for the company is January
1, 1966.

Legislative History

[C66, 71, 73, 75, 77, 79, 81, §508.37; 82 Acts, ch 1072, §3 – 7]