§ 4221 — Standard nonforfeiture law

New York § 4221

• Jurisdiction: New York
• Law ISC: Insurance
• Art. 42: Life Insurance Companies and Accident and Health Insurance Companies and Legal Services Insurance Companies

Text

§ 4221. Standard nonforfeiture law. (a) In the case of policies issued\non or after the operative date of this section as defined in subsection\n(p) hereof, no policy of life insurance, except as stated in subsection\n(o) hereof, shall be delivered or issued for delivery in this state\nunless it shall contain in substance the following provisions, or\ncorresponding provisions which in the opinion of the superintendent are\nat least as favorable to the defaulting or surrendering policyholder as\nare minimum requirements hereinafter specified and are essentially in\ncompliance with subsection (n) hereof:\n (1) That, in the event of default in any premium payment, the company\nwill grant, upon proper request not later than sixty days after the due\ndate of the premium in default, a paid-up nonforfeiture benefit on a\nplan stipulated in the policy, effective as of such due date, of such\nvalue as may be hereinafter specified. In lieu of such stipulated\npaid-up nonforfeiture benefit, the company may substitute, upon proper\nrequest not later than sixty days after the due date of the premium in\ndefault, a more favorable alternative paid-up nonforfeiture benefit\nwhich provides a greater amount or longer period of death benefits or,\nif applicable, a greater amount or earlier payment of endowment\nbenefits.\n (2) That, upon surrender of the policy within sixty days after the due\ndate of any premium payment in default after premiums have been paid for\nat least three full years, the company will pay, in lieu of any paid-up\nnonforfeiture benefit, a cash surrender value of such amount as may be\nhereinafter specified.\n (3) That a specified paid-up nonforfeiture benefit shall become\neffective as specified in the policy unless the person entitled to make\nsuch election elects another available option not later than sixty days\nafter the due date of the premium in default.\n (4) That, if the policy shall have become paid up by completion of all\npremium payments or if it is continued under any paid-up nonforfeiture\nbenefit which became effective on or after the third policy anniversary,\nthe company will pay, upon surrender of the policy within thirty days\nafter any policy anniversary, a cash surrender value of such amount as\nmay be hereinafter specified.\n (5) In the case of policies which provide for the crediting of\nadditional amounts pursuant to subsection (b) of section four thousand\ntwo hundred thirty-two of this article, under which cash surrender\nvalues are adjusted in accordance with a market-value adjustment\nformula, which cause on a basis guaranteed in the policy unscheduled\nchanges in benefits or premiums, or which provide an option for changes\nin benefits or premiums other than a change to a new policy, a statement\nof the mortality table, interest rate, and method used in calculating\ncash surrender values and any paid-up nonforfeiture benefits available\nunder the policy. In the case of all other policies, a statement of the\nmortality table and interest rate used in calculating the cash surrender\nvalues and any paid-up nonforfeiture benefits available under the\npolicy, together with a table showing the cash surrender value, if any,\nand paid-up nonforfeiture benefit, if any, available under the policy on\neach policy anniversary either during the first twenty policy years or\nduring the term of the policy, whichever is shorter, such values and\nbenefits to be calculated upon the assumption that there are no\ndividends or paid-up additions credited to the policy and that there is\nno indebtedness to the company on the policy.\n (5-a) In the case of policies which provide for the crediting of\nadditional amounts pursuant to subsection (b) of section four thousand\ntwo hundred thirty-two of this article and which provide for surrender\ncharges in accordance with subsection (n-1) of this section, a statement\nas to any charges that will be imposed upon surrender of the policy.\n (5-b) In the case of policies that provide for the adjustment of any\ncash surrender values in accordance with a market-value adjustment\nformula, a statement as to the times (which shall not be less frequently\nthan once every ten years after issuance of the policy) on which cash\nsurrender values will be determined without the use of such a formula.\n (6) A statement that the cash surrender values and the paid-up\nnonforfeiture benefits available under the policy are not less than the\nminimum values and benefits required by any statute of the state in\nwhich the policy is delivered; an explanation of the manner in which the\ncash surrender values and the paid-up nonforfeiture benefits are altered\nby the existence of any paid-up additions credited to the policy or any\nindebtedness to the company on the policy; if a detailed statement of\nthe method of computation of the values and benefits shown in the policy\nis not stated therein, a statement that such method of computation has\nbeen filed with the insurance supervisory official of the state in which\nthe policy is delivered; and a statement of the method to be used in\ncalculating the cash surrender value and paid-up nonforfeiture benefit\navailable under the policy on any policy anniversary beyond the last\nanniversary for which such values and benefits are consecutively shown\nin the policy.\n (7) That the company shall deliver at issue to each holder of a policy\nunder which additional amounts may be credited pursuant to subsection\n(b) of section four thousand two hundred thirty-two of this article, or\nunder which cash surrender values and policy loan values are adjusted in\naccordance with a market-value adjustment formula, a statement\ncontaining such information as the superintendent prescribes, and shall\nmail to each such holder at least once each policy year or within sixty\ndays after the end of a policy year a statement as of a date during such\nyear as to the death benefit, cash surrender value and loan value under\nthe policy (and any amount by which such cash surrender value and loan\nvalue were adjusted in accordance with a market-value adjustment\nformula) on such date as well as such further information as the\nsuperintendent requires. The statement shall be addressed to the last\npost-office address of the policyholder known to the company.\n (8) Any of the foregoing provisions or portions of this subsection not\napplicable by reason of the plan of insurance may, to the extent\ninapplicable, be omitted from the policy.\n The company shall reserve the right to defer the payment of any cash\nsurrender value for a period of six months after demand therefor with\nsurrender of the policy.\n (b) (1) In the case of contracts issued on or after the operative date\nof this section as defined in subsection (p) hereof and prior to the\noperative date of section four thousand two hundred twenty-three of this\narticle, no contract of annuity or pure endowment, except as stated in\nsubsection (o) hereof, shall be delivered or issued for delivery in this\nstate unless it contains in substance the following provisions, or\ncorresponding provisions which in the opinion of the superintendent are\nat least as favorable to the defaulting or surrendering contract holder:\n (A) That in the event of default in any stipulated payment the company\nwill grant a paid-up nonforfeiture benefit on a plan stipulated in the\ncontract, effective as of such due date, of such value as may be\nhereinafter specified.\n (B) A statement of the mortality table, if any, and interest rate used\nin calculating the paid-up nonforfeiture benefits available under the\ncontract, together with a table showing either the cash surrender value\nor the paid-up nonforfeiture benefit, if any, available on each\nanniversary of the contract either during the first twenty contract\nyears or during the term of stipulated payments, whichever is shorter,\nsuch benefits to be calculated upon the assumption that there are no\ndividends or paid-up additions credited to the contract and that there\nis no indebtedness to the company on the contract.\n (C) A statement that the paid-up nonforfeiture benefits available\nunder the contract are not less than the minimum benefits required by\nany statute of the state in which the contract is delivered; an\nexplanation of the manner in which the paid-up nonforfeiture benefits\nare altered by the existence of any paid-up additions credited to the\ncontract or any indebtedness to the company on the contract; if a\ndetailed statement of the method of computation of the benefits shown in\nthe contract is not stated therein, a statement that such method of\ncomputation has been filed with the insurance supervisory official of\nthe state in which the contract is delivered; and a statement of the\nmethod to be used in calculating the paid-up nonforfeiture benefit\navailable under the contract on any contract anniversary beyond the last\nanniversary for which such benefits are consecutively shown in the\ncontract.\n If a company shall provide for the payment of a cash surrender value,\nit shall reserve the right to defer the payment of such value for a\nperiod of six months after demand therefor with surrender of the\ncontract.\n (2) Notwithstanding the requirements of this subsection, any deferred\nannuity contract may provide that if the annuity allowed under any\npaid-up nonforfeiture benefit would be less than sixty dollars annually,\nthe company may at its option grant a cash surrender value in lieu of\nsuch paid-up nonforfeiture benefit of such amount as may be required by\nsubsection (f) hereof.\n (c) (1) Any cash surrender value available under any policy referred\nto in subsection (a) hereof, in the event of default in a premium\npayment due on any policy anniversary, whether or not required by such\nsubsection, shall be an amount not less than the excess, if any, of the\npresent value, on such anniversary, of the future guaranteed benefits\nwhich would have been provided for by the policy, including any existing\npaid-up additions, if there had been no default, over the sum of (i) the\nthen present value of the adjusted premiums as defined in subsections\n(g), (h), (i) and (k) hereof, corresponding to premiums which would have\nfallen due on and after such anniversary, and (ii) the amount of any\nindebtedness to the company on the policy, including interest due or\naccrued.\n (2) In the case of any policy issued on or after the operative date of\nsubsection (k) hereof, which provides supplemental life insurance or\nannuity benefits at the option of the insured and for an identifiable\nadditional premium by rider or supplemental policy provision, the cash\nsurrender value referred to in paragraph one of this subsection shall be\nin an amount not less than the sum of the cash surrender value as\ndefined in such paragraph for an otherwise similar policy issued at the\nsame age without such rider or supplemental policy provision, the cash\nsurrender value as defined in such paragraph for a policy which provides\nonly the supplemental life insurance benefits otherwise provided by such\nrider or supplemental policy provision, and the cash surrender value as\ndefined in section four thousand two hundred twenty-three of this\narticle for a contract which provides only the supplemental annuity\nbenefits otherwise provided by such rider or supplemental policy\nprovision.\n (3) In the case of any family policy issued on or after the operative\ndate of subsection (k) hereof as defined therein, which defines a\nprimary insured and provides term insurance on the life of the spouse of\nthe primary insured expiring before the spouse's age seventy-one, the\ncash surrender value referred to in paragraph one of this subsection\nshall be an amount not less than the sum of the cash surrender value as\ndefined in such paragraph for an otherwise similar policy issued at the\nsame age without such term insurance on the life of the spouse and the\ncash surrender value as defined in such paragraph for a policy which\nprovides only the benefits otherwise provided by such term insurance on\nthe life of the spouse.\n (4) Any cash surrender value available within thirty days after any\npolicy anniversary under any such policy paid up by completion of all\npremium payments or any such policy continued under any paid-up\nnonforfeiture benefit, whether or not required by subsection (a) hereof,\nshall be an amount not less than the present value, on such anniversary,\nof the future guaranteed benefits provided for by the policy, including\nany existing paid-up additions, decreased by any indebtedness to the\ncompany on the policy, including interest due or accrued.\n (5) Every company must provide, to any policyowner who so requests in\nwriting, within twenty business days from the date the written request\nis received by the company, a statement of the cash surrender value of\nthe policy.\n (d) Any paid-up nonforfeiture benefit available under any policy\nreferred to in subsection (a) hereof, in the event of default in a\npremium payment due on any policy anniversary shall be such that its\npresent value as of such anniversary shall be at least equal to the cash\nsurrender value then provided for by the policy or, if none is provided\nfor, that cash surrender value which would have been required by this\nsection in the absence of the condition that premiums shall have been\npaid for at least a specified period.\n (e) (1) Any paid-up nonforfeiture benefit available under any annuity\nor pure endowment contract referred to in subsection (b) hereof, in the\nevent of default in a stipulated payment due on any contract anniversary\nshall be such that its present value as of such anniversary shall be not\nless than the excess, if any, of the present value, on such anniversary,\nof the future guaranteed benefits which would have been provided for by\nthe contract, including any existing paid-up additions, if there had\nbeen no default, over the sum of (i) the then present value of the\nadjusted stipulated payments defined in subsection (g) hereof\ncorresponding to stipulated payments which would have fallen due on and\nafter such anniversary, and (ii) the amount of any indebtedness to the\ncompany on the contract, including interest due or accrued.\n (2) In determining the benefits referred to in paragraph one hereof\nand in calculating the adjusted stipulated payments referred to in\nsubsection (g) hereof, in the case of annuity contracts under which an\nelection may be made to have annuity payments commence at optional\ndates, the annuity payments shall be deemed to commence at a date which\nshall be the latest permitted by the contract for the commencement of\nsuch payments but not later than the contract anniversary nearest the\nannuitant's seventieth birthday or the tenth anniversary of the\ncontract, whichever is later; and the stipulated payments shall be\ndeemed to be payable for the longest period during which they would be\npayable if election were made to have the annuity payments commence at\nsuch date.\n (f) Any cash surrender value allowed by any annuity or pure endowment\ncontract referred to in subsection (b) hereof and the present value,\nunder any optional provision, of future benefits commencing on the due\ndate of the stipulated payment in default shall each be at least equal\nto the then present value of the minimum paid-up nonforfeiture benefit\nrequired by subsection (e) hereof.\n (g) (1) This subsection shall not apply to policies issued on or after\nthe operative date of subsection (k) as defined herein.\n (2) Except as provided in paragraph four hereof, the adjusted premiums\nfor any policy referred to in subsection (a) hereof shall be calculated\non an annual basis and shall be such uniform percentage of the\nrespective premiums specified in the policy for each policy year,\nexcluding amounts stated in the policy as extra premiums to cover\nimpairments or special hazards, that the present value, at the date of\nissue of the policy, of all such adjusted premiums shall be equal to the\nsum of (i) the then present value of the future guaranteed benefits\nprovided for by the policy; (ii) two percent of the amount of insurance,\nif the insurance be uniform in amount, or of the equivalent uniform\namount, as hereinafter defined, if the amount of insurance varies with\nduration of the policy; (iii) forty percent of the adjusted premium for\nthe first policy year; (iv) twenty-five percent of either the adjusted\npremium for the first policy year or the adjusted premium for a whole\nlife policy of the same uniform or equivalent uniform amount with\nuniform premiums for the whole of life issued at the same age for the\nsame amount of insurance, whichever is less. Provided, however, that in\napplying the percentages specified in items (iii) and (iv) hereof, no\nadjusted premium shall be deemed to exceed four percent of the amount of\ninsurance or uniform amount equivalent thereto. The date of issue of a\npolicy for the purpose of this subsection shall be the date as of which\nthe rated age of the insured is determined.\n (3) In the case of a policy providing an amount of insurance varying\nwith duration of the policy, the equivalent uniform amount thereof for\nthe purpose of this subsection shall be deemed to be the uniform amount\nof insurance provided by an otherwise similar policy, containing the\nsame endowment benefit or benefits, if any, issued at the same age and\nfor the same term, the amount of which does not vary with duration and\nthe benefits under which have the same present value at the date of\nissue as the benefits under the policy, provided, however, that in the\ncase of a policy providing a varying amount of insurance (including\npolicies in which the death benefit prior to a date specified in the\npolicy does not exceed the premiums paid with interest, or the cash\nvalue of the policy if greater) issued on the life of a child under age\nten, the equivalent uniform amount of insurance shall be calculated as\nthough the amount of insurance provided by the policy prior to the\nattainment of age ten were the amount provided by such policy at age\nten.\n (4) The adjusted premiums for any policy providing term insurance\nbenefits by rider or supplemental policy provision shall be equal to (i)\nthe adjusted premiums for an otherwise similar policy issued at the same\nage without such term insurance benefits, increased, during the period\nfor which premiums for such term insurance benefits are payable, by (ii)\nthe adjusted premiums for such term insurance, the foregoing items (i)\nand (ii) being calculated separately and as specified in paragraphs two\nand three hereof except that, for the purposes of items (ii), (iii) and\n(iv) of paragraph two hereof, the amount of insurance or equivalent\nuniform amount of insurance used in the calculation of the adjusted\npremiums referred to in item (ii) of this paragraph shall be equal to\nthe excess of the corresponding amount determined for the entire policy\nover the amount used in the calculation of the adjusted premiums in item\n(i) of this paragraph.\n (5) The adjusted stipulated payments for any annuity or pure endowment\ncontract referred to in subsection (b) hereof shall be calculated on an\nannual basis and shall be such uniform percentage of the respective\nstipulated payments specified in the contract for each contract year\nthat the present value, at the date of issue of the contract, of all\nsuch adjusted stipulated payments shall be equal to the sum of (i) the\nthen present value of the future guaranteed benefits provided for by the\ncontract; (ii) twenty percent of the adjusted stipulated payment for the\nfirst contract year; and (iii) two percent of the adjusted stipulated\npayment for the first contract year for each year not exceeding twenty\nduring which stipulated payments are payable.\n (6) Except as otherwise provided in subsections (h), (i) and (j)\nhereof, all adjusted premiums, adjusted stipulated payments, and present\nvalues referred to in this section shall be calculated on the basis of\n(i) the rate of interest, not exceeding three and one-half percent per\nannum, specified in the policy or contract for calculating cash\nsurrender values, if any, and paid-up nonforfeiture benefits; and (ii) a\nmortality table which shall be: for ordinary insurance, the\nCommissioners' 1941 Standard Ordinary Mortality Table, provided that for\nany category of ordinary insurance issued on female risks, adjusted\npremiums and present values may be calculated according to an age not\nmore than three years younger than the actual age of the insured; for\nindustrial insurance, the 1941 Standard Industrial Mortality Table; for\nannuity and pure endowment contracts, either the 1937 Standard Annuity\nMortality Table, the Annuity Mortality Table for 1949 Ultimate, any\nmodification of either of these tables approved by the superintendent or\nany other table approved by the superintendent. Provided, however, that\nin calculating the present value of any paid-up term insurance with\naccompanying pure endowment, if any, offered as a nonforfeiture benefit,\nthe rates of mortality assumed may be not more than one hundred and\nthirty percent of the rates of mortality according to such applicable\ntable. Provided, further, that for insurance issued on a substandard\nbasis, the calculation of any such adjusted premiums and present values\nmay be based on such other table of mortality as may be specified by the\ncompany and approved by the superintendent.\n (h) (1) This subsection shall not apply to ordinary policies issued on\nor after the operative date of subsection (k) hereof.\n (2) In the case of ordinary policies issued on or after the operative\ndate of this subsection, all adjusted premiums and present values shall\nbe calculated on the basis of the Commissioners 1958 Standard Ordinary\nMortality Table and the rate of interest specified in the policy for\ncalculating cash surrender values and paid-up nonforfeiture benefits not\nexceeding three and one-half percent per annum except that four percent\nper annum may be used for policies issued on or after June thirteenth,\nnineteen hundred seventy-four and prior to January first, nineteen\nhundred seventy-nine, and a rate of interest not exceeding five and\none-half percent per annum may be used for policies issued on or after\nJanuary first, nineteen hundred seventy-nine, provided that for any\ncategory of ordinary insurance issued on female risks, adjusted premiums\nand present values may be calculated according to an age not more than\nsix years younger than the actual age of the insured; provided, however,\nthat in calculating the present value of any paid-up term insurance with\naccompanying pure endowment, if any, offered as a nonforfeiture benefit,\nthe rates of mortality assumed may be not more than those shown in the\nCommissioners 1958 Extended Term Insurance Table. Provided, further,\nthat for insurance issued on a substandard basis, the calculation of any\nsuch adjusted premiums and present values may be based on such other\ntable of mortality as may be specified by the company and approved by\nthe superintendent.\n (3) Any company may file with the superintendent a written notice of\nits election to comply with the provisions of this subsection after a\nspecified date before January first, nineteen hundred sixty-six. After\nthe filing of such notice, then upon such specified date (which shall be\nthe operative date of this subsection for such company), this subsection\nshall become operative with respect to the ordinary policies thereafter\nissued by such company. If a company makes no such election, the\noperative date of this subsection for such company shall be January\nfirst, nineteen hundred sixty-six.\n (i) (1) In the case of industrial policies issued on or after the\noperative date of this subsection, all adjusted premiums and present\nvalues shall be calculated on the basis of the Commissioners 1961\nStandard Industrial Mortality Table and the rate of interest specified\nin the policy for calculating cash surrender values and paid-up\nnonforfeiture benefits not exceeding three and one-half percent per\nannum except that four percent per annum may be used for policies issued\non or after June thirteenth, nineteen hundred seventy-four and prior to\nJanuary first, nineteen hundred seventy-nine and a rate of interest not\nexceeding five and one-half percent per annum may be used for policies\nissued on or after January first, nineteen hundred seventy-nine;\nprovided, however, that in calculating the present value of any paid-up\nterm insurance with accompanying pure endowment, if any, offered as a\nnonforfeiture benefit, the rates of mortality assumed may be not more\nthan those shown in the Commissioners 1961 Industrial Extended Term\nInsurance Table. Provided, further, that for insurance issued on a\nsubstandard basis, the calculation of any such adjusted premiums and\npresent values may be based on such other table of mortality as may be\nspecified by the company and approved by the superintendent.\n (2) Any company may file with the superintendent a written notice of\nits election to comply with the provisions of this subsection after a\nspecified date before January first, nineteen hundred and sixty-eight.\nAfter the filing of such notice, then upon such specified date (which\nshall be the operative date of this subsection for such company), this\nsubsection shall become operative with respect to the industrial\npolicies thereafter issued by such company. If a company makes no such\nelection, the operative date of this subsection for such company shall\nbe January first, nineteen hundred and sixty-eight.\n (j) In the case of individual annuity and pure endowment contracts\nissued on or after the operative date of paragraph three of subsection\n(c) of section four thousand two hundred seventeen of this article, and\nprior to the operative date of section four thousand two hundred\ntwenty-three of this article, all adjusted stipulated payments and\npresent values referred to in this section shall be calculated on the\nbasis of the Annuity Mortality Table for 1949, Ultimate, or any\nmodification of this table approved by the superintendent, and the rate\nof interest not exceeding four percent per annum, specified in the\ncontract for calculating cash surrender values, if any, and paid-up\nnonforfeiture benefits, except that, if such rate of interest exceeds\nthree and one-half percent per annum, there shall be substituted for\nsuch mortality table the 1971 Individual Annuity Mortality Table, or any\nmodification of this table approved by the superintendent.\n (k) (1) This subsection shall apply to all policies issued on or after\nthe operative date as defined in this subsection.\n (2) Except as provided in paragraph eight of this subsection, the\nadjusted premiums for any policy shall be calculated on an annual basis\nand shall be such uniform percentage of the respective premiums\nspecified in the policy for each policy year, excluding amounts payable\nas extra premiums to cover impairments or special hazards and also\nexcluding any uniform annual contract charge or policy fee specified in\nthe policy in a statement of the method to be used in calculating the\ncash surrender values and paid-up nonforfeiture benefits, that the\npresent value, at the date of issue of the policy, of all adjusted\npremiums shall be equal to the sum of (i) the then present value of the\nfuture guaranteed benefits provided for by the policy; (ii) one percent\nof either the amount of insurance, if the insurance be uniform in\namount, or the average amount of insurance at the beginning of each of\nthe first ten policy years; and (iii) one hundred twenty-five percent of\nthe nonforfeiture net level premium as hereinafter defined. Provided,\nhowever, that in applying the percentage specified in (iii) above no\nnonforfeiture net level premium shall be deemed to exceed four percent\nof either the amount of insurance, if the insurance be uniform in\namount, or the average amount of insurance at the beginning of each of\nthe first ten policy years. The date of issue of a policy for the\npurpose of this subsection shall be the date as of which the rated age\nof the insured is determined.\n (3) The nonforfeiture net level premium shall be equal to the present\nvalue, at the date of issue of the policy, of the guaranteed benefits\nprovided for by the policy divided by the present value, at the date of\nissue of the policy, of an annuity of one per annum payable on the date\nof issue of the policy and on each anniversary of such policy on which a\npremium falls due.\n (4) In the case of policies which cause on a basis guaranteed in the\npolicy unscheduled changes in benefits or premiums, or which provide an\noption for changes in benefits or premiums other than a change to a new\npolicy, the adjusted premiums and present values shall initially be\ncalculated on the assumption that future benefits and premiums do not\nchange from those stipulated at the date of issue of the policy. At the\ntime of any such change in the benefits or premiums the future adjusted\npremiums, nonforfeiture net level premiums and present values shall be\nrecalculated on the assumption that future benefits and premiums do not\nchange from those stipulated by the policy immediately after the change.\n (5) Except as otherwise provided in paragraph eight of this\nsubsection, the recalculated future adjusted premiums for any such\npolicy shall be such uniform percentage of the respective future\npremiums specified in the policy for each policy year, excluding amounts\npayable as extra premiums to cover impairments and special hazards, and\nalso excluding any uniform annual contract charge or policy fee\nspecified in the policy in a statement of the method to be used in\ncalculating the cash surrender values and paid-up nonforfeiture\nbenefits, that the present value, at the time of change to the newly\ndefined benefits or premiums, of all such future adjusted premiums shall\nbe equal to the excess of\n (A) the sum of\n (i) the then present value of the then future guaranteed benefits\nprovided for by the policy and\n (ii) the additional expense allowance, if any, over\n (B) the then cash surrender value, if any, or present value of any\npaid-up nonforfeiture benefit under the policy.\n (6) The additional expense allowance, at the time of the change to the\nnewly defined benefits or premiums, shall be the sum of (i) one percent\nof the excess, if positive, of the average amount of insurance at the\nbeginning of each of the first ten policy years subsequent to the change\nover the average amount of insurance prior to the change at the\nbeginning of each of the first ten policy years subsequent to the time\nof the most recent previous change, or, if there has been no previous\nchange, the date of issue of the policy; and (ii) one hundred\ntwenty-five percent of the increase, if positive, in the nonforfeiture\nnet level premium.\n (7) The recalculated nonforfeiture net level premium shall be equal to\nthe result obtained by dividing subparagraph (A) by subparagraph (B)\nhereof where:\n (A) equals the sum of\n (i) the nonforfeiture net level premium applicable prior to the change\ntimes the present value of an annuity of one per annum payable on each\nanniversary of the policy on or subsequent to the date of the change on\nwhich a premium would have fallen due had the change not occurred, and\n (ii) the present value of the increase in future guaranteed benefits\nprovided for by the policy, and\n (B) equals the present value of an annuity of one per annum payable on\neach anniversary of the policy on or subsequent to the date of change on\nwhich a premium falls due.\n (8) Notwithstanding any other provision of this subsection to the\ncontrary, in the case of a policy issued on a substandard basis which\nprovides reduced graded amounts of insurance so that, in each policy\nyear, such policy has the same tabular mortality cost as an otherwise\nsimilar policy issued on the standard basis which provides higher\nuniform amounts of insurance, adjusted premiums and present values for\nsuch substandard policy may be calculated as if it were issued to\nprovide such higher uniform amounts of insurance on the standard basis.\n (9) All adjusted premiums and present values referred to in this\nsection shall for all policies of ordinary insurance be calculated on\nthe basis of\n (A) the Commissioners 1980 Standard Ordinary Mortality Table, or\n (B) at the election of the company for any one or more specified plans\nof life insurance, the Commissioners 1980 Standard Ordinary Mortality\nTable with Ten-Year Select Mortality Factors; and shall for all policies\nissued in a particular calendar year be calculated on the basis of a\nrate of interest not exceeding the nonforfeiture interest rate as\ndefined in this subsection for policies issued in that calendar year.\nProvided, however, that:\n (i) At the option of the company, calculations for all policies issued\nin a particular calendar year may be made on the basis of a rate of\ninterest not exceeding the nonforfeiture interest rate, as defined in\nthis subsection, for policies issued in the immediately preceding\ncalendar year.\n (ii) Under any paid-up nonforfeiture benefit, including any paid-up\ndividend additions, any cash surrender value available, whether or not\nrequired by subsection (a) hereof, shall be calculated on the basis of\nthe mortality table and rate of interest used in determining the amount\nof such paid-up nonforfeiture benefit and paid-up dividend additions, if\nany.\n (iii) A company may calculate the amount of any guaranteed paid-up\nnonforfeiture benefit including any paid-up additions under the policy\non the basis of an interest rate no lower than that specified in the\npolicy for calculating cash surrender values.\n (iv) In calculating the present value of any paid-up term insurance\nwith accompanying pure endowment, if any, offered as a nonforfeiture\nbenefit, the rates of mortality assumed may be not more than those shown\nin the Commissioners 1980 Extended Term Insurance Table.\n (v) For insurance issued on a substandard basis, the calculation of\nany such adjusted premiums and present values may be based on\nappropriate modifications of the aforementioned tables.\n (vi) Any ordinary mortality tables, adopted after nineteen hundred\neighty by the National Association of Insurance Commissioners (or any\nmodifications thereof for any specified class or classes of risks), that\nare approved by the superintendent for use in determining the minimum\nnonforfeiture standard may be substituted for the Commissioners 1980\nStandard Ordinary Mortality Table with or without Ten-Year Select\nMortality Factors or for the Commissioners 1980 Extended Term Insurance\nTable.\n (10) The nonforfeiture interest rate per annum for any policy issued\nin a particular calendar year shall be equal to one hundred and\ntwenty-five percent of the calendar year statutory valuation interest\nrate for such policy as defined in section four thousand two hundred\nseventeen of this article rounded to the nearer one quarter of one\npercent, computed, with respect to a single premium life insurance\npolicy of the kind referred to in item (vi) of subparagraph (B) of\nparagraph four of subsection (c) of such section, on a year of issue\nbasis by using a reference interest rate defined for such policy in\nsubparagraph (F) of such paragraph for the year immediately preceding\nthe year of issue on the assumption that the company has submitted an\nopinion and memorandum, in form and substance satisfactory to the\nsuperintendent, of a qualified actuary with respect to such single\npremium life insurance policies in accordance with item (vi) of\nsubparagraph (B) of such paragraph.\n (11) Notwithstanding any other provision in this chapter to the\ncontrary, any refiling of nonforfeiture values or their methods of\ncomputation for any previously approved policy form which involves only\na change in the interest rate or mortality table used to compute\nnonforfeiture values shall not require refiling of any other provisions\nof that policy form.\n (12) After May twenty-fourth, nineteen hundred eighty-two, any company\nmay file with the superintendent a written notice of its election to\ncomply, with respect to any plan of insurance, with the provisions of\nthis subsection after a specified date before January first, nineteen\nhundred eighty-nine, which shall be the operative date of this\nsubsection for that plan of insurance for such company; the operative\ndates of this subsection for other plans of insurance for such company\nshall be any dates not later than January first of the third subsequent\ncalendar year, but in no event later than January first, nineteen\nhundred eighty-nine. If a company makes no such election with respect to\nany plan of insurance, the operative date of this subsection for such\ncompany shall be January first, nineteen hundred eighty-nine.\n (l) In the case of any plan of life insurance which provides for\nfuture premium determination, the amounts of which are to be determined\nby the insurance company based on then estimates of future experience,\nor in the case of any plan of life insurance which is of such a nature\nthat minimum values cannot be determined by the methods described in\nsubsection (a), (c), (d), (g), (h), (i) or (k) of this section, then:\n (1) the superintendent must be satisfied that the benefits provided\nunder the plan are substantially as favorable to policyholders and\ninsureds as the minimum benefits otherwise required by subsection (a),\n(c), (d), (g), (h), (i) or (k) hereof;\n (2) the superintendent must be satisfied that the benefits and the\npattern of premiums of that plan are not such as to mislead prospective\npolicyholders or insureds;\n (3) the cash surrender values and paid-up nonforfeiture benefits\nprovided by such plan must not be less than the minimum values and\nbenefits required for the plan computed by a method consistent with the\nprinciples of this section, as determined by the superintendent.\n (m) (1) Any cash surrender value and any paid-up nonforfeiture\nbenefit, available under any such policy or contract in the event of\ndefault in the payment of any premium or stipulated payment due at any\ntime other than on the policy or contract anniversary, shall be\ncalculated with allowance for the lapse of time and the payment of\nfractional premiums or stipulated payments beyond the beginning of the\npolicy or contract year in which the default occurs.\n (2) All values referred to in subsections (c) through (k) hereof, may\nbe calculated upon the assumption that any death benefit is payable at\nthe end of the policy or contract year of death.\n (3) Notwithstanding the provisions of subsections (c) and (e) hereof,\nadditional benefits payable (i) in the event of death or dismemberment\nby accident, (ii) in the event of total and permanent disability, (iii)\nas reversionary annuity or deferred reversionary annuity benefits, (iv)\nas term insurance benefits provided by a rider or supplemental policy\nprovision to which, if issued as a separate policy, this section would\nnot apply, (v) as term insurance on the life of a child or on the lives\nof children provided in a policy on the life of a parent of the child,\nif such term insurance expires before the child's age is twenty-six, is\nuniform in amount after the child's age is one, and has not become\npaid-up by reason of the death of a parent of the child and (vi) as\nother policy benefits additional to life insurance, endowment, and\nannuity benefits, and premiums for all such additional benefits, shall\nbe disregarded in ascertaining cash surrender values and nonforfeiture\nbenefits required by this section, and no such additional benefits shall\nbe required to be included in any paid-up nonforfeiture benefits.\n (n) (1) This subsection, in addition to all other applicable\nprovisions of this section, shall apply to all policies issued on or\nafter January first, nineteen hundred eighty-six.\n (2) Any cash surrender value available under the policy in the event\nof default in a premium payment due on any policy anniversary shall be\nin an amount which does not differ by more than two-tenths of one\npercent of either the amount of insurance, if the insurance be uniform\nin amount, or the average amount of insurance at the beginning of each\nof the first ten policy years, from the sum of (i) the greater of zero\nand the basic cash value hereinafter specified and (ii) the present\nvalue of any existing paid-up additions less the amount of any\nindebtedness to the company under the policy.\n (3) The basic cash value shall be equal to the present value, on such\nanniversary, of the future guaranteed benefits which would have been\nprovided for by the policy, excluding any existing paid-up additions and\nbefore deduction of any indebtedness to the company, if there had been\nno default, less the then present value of the nonforfeiture factors, as\nhereinafter defined, corresponding to premiums which would have fallen\ndue on and after such anniversary. Provided, however, that the effects\non the basic cash value of supplemental life insurance or annuity\nbenefits or of family coverage, as described in subsection (c) or (g)\nhereof, whichever is applicable, shall be the same as are the effects\nspecified in such subsection, whichever is applicable, on the cash\nsurrender values defined in that subsection.\n (4) The nonforfeiture factor for each policy year shall be an amount\nequal to a percentage of the adjusted premium for the policy year, as\ndefined in subsection (g) or (k) hereof, whichever is applicable. Except\nas is required by the next succeeding sentence of this paragraph, such\npercentage:\n (A) must be the same percentage for each policy year between the\nsecond policy anniversary and the later of (i) the fifth policy\nanniversary and (ii) the first policy anniversary at which there is\navailable under the policy a cash surrender value in an amount, before\nincluding any paid-up additions and before deducting any indebtedness,\nof at least two-tenths of one percent of either the amount of insurance,\nif the insurance be uniform in amount, or the average amount of\ninsurance at the beginning of each of the first ten policy years; and\n (B) must be such that no percentage after the later of the two policy\nanniversaries specified in subparagraph (A) hereof may apply to fewer\nthan five consecutive policy years.\n Provided, that no basic cash value may be less than the value which\nwould be obtained if the adjusted premiums for the policy, as defined in\nsubsection (g) or (k) hereof, whichever is applicable, were substituted\nfor the nonforfeiture factors in the calculation of the basic cash\nvalue.\n (5) All adjusted premiums and present values referred to in this\nsubsection shall for a particular policy be calculated on the same\nmortality and interest bases as are used in demonstrating the policy's\ncompliance with the other subsections of this section.\n (6) (A) The cash surrender values referred to in this subsection shall\ninclude any endowment benefits provided for by the policy.\n (B) Any cash surrender value available other than in the event of\ndefault in a premium payment due on a policy anniversary, and the amount\nof any paid-up nonforfeiture benefit available under the policy in the\nevent of default in a premium payment shall be determined in manners\nconsistent with the manners specified for determining the analogous\nminimum amounts in subsections (a), (c), (d), (k) and (m) hereof.\n (C) The amounts of any cash surrender values and of any paid-up\nnonforfeiture benefits granted in connection with additional benefits\nsuch as those listed as items (i) through (vi) in paragraph three of\nsubsection (m) hereof shall conform with the principles of this\nsubsection.\n (n-1) (1) Notwithstanding any other provision in this section, any\npolicy that meets the requirements of this subsection shall be deemed to\nprovide the minimum nonforfeiture benefits and cash surrender values\nrequired by this section. Any policy which is issued by a company after\nthe operative date of this subsection for the company and under which\nadditional amounts may be credited pursuant to subsection (b) of section\nfour thousand two hundred thirty-two of this article must meet the\nrequirements of this subsection.\n (2) In this subsection,\n (A) "Policy value" means an amount equal to gross premiums paid under\na policy (excluding separately identified premiums for riders or\nsupplementary benefits that are not credited to the policy value) plus\ninterest credited less the amount of any partial withdrawals and the\nfollowing charges as specified in the policy: (i) expense charges, (ii)\nbenefits charges, (iii) service charges, and (iv) partial surrender\ncharges.\n (B) "Benefit charges" means mortality charges made for life insurance\non the insured person or persons and any charges made for riders or\nsupplementary benefits.\n (C) "Service charges" means charges for the cost of transactions\nrequested by the policyowner such as partial withdrawals and benefit\nillustrations. Transactional charges made under mandatory policy\nprovisions shall not be assessed unless specifically permitted by law or\nregulation for such transactions.\n (D) "Expense charges" means charges (other than service charges)\ndeducted from gross premiums before premiums are credited to the policy\nvalue or otherwise deducted from the policy value.\n (E) "Excess first year expense charges" means the greatest amount by\nwhich (x) can exceed (y) based, for stipulated premium policies, on the\npremiums set forth in the policy and, for other policies, on the\nassumption that any premium (other than a single premium) payable in the\nfirst policy year is also payable during the entire premium paying\nperiod, where\n (x) is the amount of the expense charges made in the first policy year\nand\n (y) is the arithmetic average of the corresponding charges which the\npolicy states would be imposed in policy years two through twenty or the\npremium paying period, if shorter.\n (F) "Excess expense charges for a face amount increase" means the\ngreatest amount by which (x) can exceed (y) based, for stipulated\npremium policies, on the premiums set forth in the policy and, for other\npolicies, on the assumption that the net level whole life annual premium\nfor the increase applies throughout the remaining premium paying period,\nwhere\n (x) is the amount of the expense charges attributable to an increase\nin face amount of insurance in the first policy year of the increase,\nand\n (y) is the arithmetic average of the corresponding charges\nattributable to the increase which the policy states would be imposed in\nthe nineteen policy years following the increase or the premium paying\nperiod, if shorter.\n (G) "Interest credited" means the amount of interest credited to the\npolicy value but, with respect to policies meeting the requirements of\nsubparagraph (A) of paragraph three of this subsection, not less than\nthree percent in any year.\n (H) "Net level whole life annual premium at issue" means an annual\npremium based on face amounts of insurance set forth in the policy and\non the assumption of level annual premiums for life, the mortality table\nrate used to calculate the maximum mortality charges (but not greater\nthan that permitted under item (iv) of subparagraph (A) of paragraph\nthree of this subsection) and an interest rate based on the rate\nspecified in the policy but not less than the lesser of four percent and\nthe nonforfeiture interest rate per annum pursuant to paragraph ten of\nsubsection (k) of this section.\n (I) "Net level whole life annual premium for an increase in the face\namount of insurance" means an additional annual premium for an increase\nin the face amount of insurance determined as of the date of the\nincrease in accordance with subparagraph (H) of this paragraph as though\nsuch increase were a separate policy.\n (J) "Increase in face amount of insurance" means an increase in the\nschedule of face amounts of insurance provided for in the policy and\nmade at the request of the policyholder and shall not include increases\nin face amount resulting from a change in the death benefit option or\nchanges in death benefit pursuant to policy terms that do not affect the\nface amount.\n (K) "Surrender charge" means a deferred charge made to the policy\nvalue in the event of a full or partial surrender of the policy,\nreduction in the face amount of insurance or premium, or a default in a\npremium payment.\n (L) "Cash surrender value" means an amount equal to the policy value\nless any surrender charge, before reduction for outstanding loans or\nother amounts due under the policy.\n (M) "Deferred first year expense charge", at issue or for an increase\nin the face amount of insurance, means any portion of the allowable\nfirst year expense charge that is not deducted from premiums or charged\nto the policy value in the year of issue, or in the policy year of a\nface amount increase, but deferred and charged to the policy value in\nsubsequent years.\n (N) "Consumer price ratio" means the ratio (not to exceed two) of (x)\nthe consumer price index (for all urban households) for the September\npreceding the policy year in which the ratio is being applied to (y) the\nconsumer price index for September, nineteen hundred eighty-five.\n (3) A policy that meets the requirements of this subsection must\nprovide for cash surrender values that meet the requirements of either\nsubparagraph (A) or subparagraph (B) and comply with the provisions of\nsubparagraphs (C) and (D) of this paragraph.\n (A) Cash surrender values shall be deemed to meet the requirements of\nthis subparagraph, if the following conditions are met:\n (i) Expense charges for any policy year shall not exceed the\nfollowing:\n (I) ninety percent of premiums received up to the net level whole life\nannual premium at issue (regardless of when received),\n (II) ten percent of all other premiums received,\n (III) ninety percent of any net level whole life annual premium for\nincreases in the face amount of insurance (including increases\noffsetting previous decreases),\n (IV) ten dollars per one thousand dollars of initial face amount in\nthe first policy year,\n (V) one dollar per one thousand dollars of the first one hundred\nthousand dollars of face amount in subsequent policy years,\n (VI) ten dollars per one thousand dollars of any increase in the face\namount of insurance in the year of increase (including increases\noffsetting previous decreases),\n (VII) a charge per policy in the first policy year equal to the\nproduct of one hundred fifty dollars and the consumer price ratio, and\n (VIII) in policy years after the first, a charge per policy per month\nequal to the product of five dollars and the consumer price ratio.\n (ii) Any surrender charge provided in the policy shall be such that\nthe initial surrender charge together with the expense charges made in\nthe first policy year (and on premiums up to the net level whole life\nannual premium if received after the first year) do not exceed the sum\nof the amounts determined in accordance with clauses (I) and (II) (for\npremiums received in the first year) and clauses (IV) and (VII) of item\n(i) of this subparagraph. The surrender charge at any time shall not be\ngreater than the difference between the maximum initial surrender charge\npermitted under this subparagraph and the sum of all the deferred\nexpense charges made up to that time. Any additional surrender charges\nthat are imposed in connection with an increase in face amount of the\npolicy shall be such that such additional charges together with any\nexpense charges made in connection with such increase do not exceed the\nsum of the amounts determined in accordance with clauses (III) and (VI)\nof item (i) of this subparagraph.\n (iii) Deferred first year expense charges shall be such that: (I) the\ncharge for any one year shall not exceed the maximum allowable surrender\ncharge for that year, and (II) the total of all such charges at any time\nplus the surrender charge at that time shall not exceed the maximum\ninitial surrender charge. Any deferred first year expense charge imposed\nwith respect to an increase in the face amount of insurance shall be\nsubject to comparable limitations.\n (iv) A policy meeting the requirements of this subparagraph if issued\nbefore the operative date of subsection (k) of this section may not\nimpose mortality charges in excess of those based on the commissioners\n1958 standard ordinary mortality table in the case of a standard\nmedically underwritten insured or the commissioners 1958 extended term\ninsurance table in the case of any other standard insured, and if issued\non or after such operative date may not impose mortality charges in\nexcess of those based on the commissioners 1980 standard ordinary\nmortality table in the case of a standard medically underwritten insured\nor the commissioners 1980 extended term insurance table in the case of\nany other standard insured. At the option of the company, maximum\ncharges based on the commissioners 1980 standard ordinary mortality\ntable may be computed using ten-year select mortality factors. Maximum\ncharges may also be based on any other table (or modification thereof\nfor the specified class of risk) approved by the superintendent pursuant\nto item (vi) of subparagraph (B) of paragraph nine of subsection (k) of\nthis section. For insurance issued on a substandard basis, such charges\nmay be based on appropriate modifications of such tables.\n (B) Cash surrender values shall be deemed to meet the requirements of\nthis subparagraph, if the following conditions are met:\n (i) Policy values shall not be less than a minimum policy value which\nreflects the same transactions, the same interest credited and the same\nbenefit charges that are reflected in the actual policy value, except\nthat the excess first year expense charges shall not be greater than the\ninitial expense allowance, and any excess expense charges for a face\namount increase after issue shall not be greater than the increase\nexpense allowance. For purposes of this item, the initial expense\nallowance shall be (I) the lesser of (aa) one hundred twenty-five\npercent of the net level whole life annual premium at issue and (bb)\nfour percent of the average face amount of insurance provided under the\npolicy during the first ten policy years plus (II) one percent of such\naverage face amount, and the increase expense allowance shall be (I) the\nlesser of (aa) one hundred twenty-five percent of the net level whole\nlife annual premium for an increase in the face amount of insurance and\n(bb) four percent of the average increase in face amount of insurance\nover a period of ten policy years (excluding any increases previously\ntaken into account in determining an expense allowance under this item)\nplus (II) one percent of any such average increase.\n (ii) Any surrender charge provided in the policy shall be such that\nthe initial surrender charge together with any excess first year expense\ncharges do not exceed the initial expense allowance. Any additional\nsurrender charges that are imposed in connection with an increase in\nface amount shall be such that any such additional charge together with\nany excess expense charges made in connection with such increase do not\nexceed the increase expense allowance.\n (iii) The policy shall provide that at least once each policy year the\npolicyholder has the option to apply the portion of the cash surrender\nvalue necessary to provide an amount of guaranteed paid-up life\ninsurance at least as great as the lesser of (I) and (II), where (I) is\nthe amount of paid-up life insurance provided by applying the cash\nsurrender value to provide such paid-up insurance, computed on the basis\nof an interest rate (not less than the lesser of (aa) four percent and\n(bb) the nonforfeiture interest rate per annum pursuant to paragraph ten\nof subsection (k) of this section minus one percent) guaranteed in the\npolicy for this purpose, and a mortality basis (not less favorable to\nthe policyholder than the mortality basis specified for an insured not\nmedically underwritten in item (iv) of subparagraph (A) of this\nparagraph) guaranteed in the policy for this purpose, and (II) is the\namount of paid-up life insurance such that the amount at risk on the\npaid-up insurance is the same as the amount at risk under the policy. If\nthe option is elected, the portion of the cash surrender value not\napplied to provide the paid-up life insurance shall be paid to the\npolicyholder. The guaranteed paid-up life insurance benefit may be\nprovided under the policy or by means of a separate single premium life\ninsurance policy issued by the company or an affiliate or subsidiary\nthereof. For purposes of this item, the term "cash surrender value" is\nafter reduction for outstanding loans or other amounts due under the\npolicy.\n (C) The surrender charge in policy years after the first shall not\nexceed the maximum initial surrender charge permitted under this\nsubsection multiplied by the ratio of (i) the value of a life annuity\ndue of one dollar per year for the balance of the amortization period to\n(ii) the corresponding annuity value at issue, based on the mortality\ntable and interest rate used in calculating the net level whole life\nannual premiums. For all policies the maximum amortization period is\ntwenty years.\n (D) Any surrender charge that is imposed on an increase in premium\npayments under a policy meeting the requirements of this subsection that\ndoes not result in any increase in face amount of the policy shall not\nexceed the difference between (I) the maximum initial surrender charge\ncomputed on the assumption that premiums were paid at the increased rate\nfrom the date of issuance of the policy and (II) the maximum initial\nsurrender charge permitted under this subsection.\n (4) The superintendent may issue regulations to implement this\nsubsection.\n (5) The operative date of this subsection for a company shall be\nJanuary first, nineteen hundred eighty-eight, or the operative date of\nthis act for the company, whichever is earlier.\n (n-2) Notwithstanding any other provision of this section, any policy\nthat provides for the crediting of additional amounts pursuant to\nsubsection (b) of section four thousand two hundred thirty-two of this\narticle may provide for cash surrender benefits determined in accordance\nwith a market-value adjustment formula, provided, however, that such\npolicy provides for cash surrender benefits determined without\nadjustment in accordance with such a formula at specified times (which\nshall not be less frequent than once every ten years after issuance of\nthe policy). For purposes hereof, "market-value adjustment formula"\nmeans a formula which is described in the policy for increasing and\ndecreasing cash surrender values that would otherwise meet the minimum\nrequirements of subsection (n-1) of this section and which takes into\naccount (1) changes in interest rates on publicly-traded obligations or\nother investments or in interest rates provided in, or declared pursuant\nto, policies of the same class as the policy being surrendered and (2)\nthe length of time between the date on which the policy is surrendered\nand the next date on which the policy would have provided cash surrender\nbenefits determined without the use of any market-value adjustment\nformula. The superintendent may promulgate reasonable regulations to\ndefine permissible forms or market-value adjustment formulae.\n (o) (1) This section shall not apply to any of the following:\n (A) Reinsurance.\n (B) Group insurance.\n (C) Group annuity contract.\n (D) A single premium pure endowment or annuity contract.\n (E) A reversionary annuity contract.\n (F) A term policy of uniform amount, which provides no guaranteed\nnonforfeiture or endowment benefits, or renewal thereof, of thirty years\nor less expiring before age eighty-one, for which uniform premiums are\npayable during the entire term of the policy.\n (G) A term policy of decreasing amount, which provides no guaranteed\nnonforfeiture or endowment benefits, on which each adjusted premium,\ncalculated as specified in subsections (g), (h), (i) and (k) hereof, is\nless than the adjusted premium so calculated, on a term policy of\nuniform amount, or renewal thereof, which provides no guaranteed\nnonforfeiture or endowment benefits, issued at the same age and for the\nsame initial amount of insurance, and for a term of twenty years or less\nexpiring before age seventy-one, for which uniform premiums are payable\nduring the entire term of the policy.\n (H) A policy, which provides no guaranteed nonforfeiture or endowment\nbenefits, for which no cash surrender value, if any, or present value of\nany paid-up nonforfeiture benefit, at the beginning of any policy year,\ncalculated as specified in subsections (c), (d), (g), (h), (i) and (k)\nhereof, exceeds two and one-half percent of the amount of insurance at\nthe beginning of the same policy year.\n (I) A policy or contract delivered outside this state through an agent\nor other representative of the company issuing the policy or through a\nbroker.\n (2) For purposes of determining the applicability of this section, the\nage at expiry for a joint term life insurance policy shall be the age at\nexpiry of the oldest life.\n (p) (1) Any company may file with the superintendent a written notice\nof its election to comply with the provisions of this section after a\nspecified date before January first, nineteen hundred forty-eight.\n (2) After the filing of such notice, then upon such specified date\n(which shall be the operative date for such company), this section shall\nbecome operative with respect to the policies and contracts thereafter\nissued by such company. If a company makes no such election, the\noperative date of this section for such company shall be January first,\nnineteen hundred forty-eight.\n (q) The provisions of this section shall not apply to any policy\nqualified for special tax treatment under subsection (b) of section four\nhundred three of the Internal Revenue Code of 1986, as amended, to the\nextent such application would prevent such qualification.\n