§ 27-62-3. Definitions.
As used in this chapter:
(1) "Actuarial standards board� means the board established by the American Academy of
Actuaries to develop and promulgate standards of actuarial practice.
(2) "Contract premium� means the gross premium that is required to be paid under a fixed
premium policy, including the premium for a rider for which benefits are shown in
the illustration.
(3) "Currently payable scale� means a scale of non-guaranteed elements in effect for a
policy form as of the preparation date of the illustration or declared to become effective
within the next ninety-five (95) days.
(4) "Disciplined current scale� means a scale of non-guaranteed elements constituting
a limit on illustrations currently being illustrated by an insurer that is reasonably
based on actual recent historical experience, as certified annually by an illustration
actuary designated by the insurer. Further guidance in determining the disciplined
current scale as contained in standards established by the Actuarial Standards Board
may be relied upon if the standards:
(i) Are consistent with all provisions of this chapter;
(ii) Limit a disciplined current scale to reflect only actions that have already been taken
or events that have already occurred;
(iii) Do not permit a disciplined current scale to include any projected trends of improvements
in experience or any assumed improvements in experience beyond the illustration date;
and
(iv) Do not permit assumed expenses to be less than minimum assumed expenses.
(5) "Generic name� means a short title descriptive of the policy being illustrated such
as "whole life,� "term life,� or "flexible premium adjustable life.�
(6) "Guaranteed elements� and "non-guaranteed elements�:
(i) "Guaranteed elements� means the premiums, benefits, values, credits, or charges under
a policy of life insurance that are guaranteed and determined at issue.
(ii) "Non-guaranteed elements� means the premiums, benefits, values, credits, or charges
under a policy of life insurance that are not guaranteed or not determined at issue.
(7) "Illustrated scale� means a scale of non-guaranteed elements currently being illustrated
that is not more favorable to the policy owner than the lesser of:
(i) The disciplined current scale; or
(ii) The currently payable scale.
(8) "Illustration� means a presentation or depiction that includes non-guaranteed elements
of a policy of life insurance over a period of years and that is one of the three
(3) types defined in subsections (8)(i) — (8)(iii):
(i) "Basic illustration� means a ledger or proposal used in the sale of a life insurance
policy that shows both guaranteed and non-guaranteed elements.
(ii) "Supplemental illustration� means an illustration furnished in addition to a basic
illustration that meets the applicable requirements of this chapter, and that may
be presented in a format differing from the basic illustration, but may only depict
a scale of non-guaranteed elements that is permitted in a basic illustration.
(iii) "In force illustration� means an illustration furnished at any time after the policy
that it depicts has been in force for one year or more.
(9) "Illustration actuaryâ€� means an actuary meeting the requirements of §â€‚27-62-10 who certifies to illustrations based on the standard of practice promulgated by the
Actuarial Standards Board.
(10) "Lapse-supported illustration� means an illustration of a policy form failing the
test of self-supporting as defined in this section, under a modified persistency rate
assumption using persistency rates underlying the disciplined current scale for the
first five (5) years and one hundred percent (100%) policy persistency thereafter.
(11)(i) "Minimum assumed expenses� means the minimum expenses that may be used in the calculation
of the disciplined current scale for a policy form. The insurer may choose to designate
each year the method of determining assumed expenses for all policy forms from the
following:
(A) Fully allocated expenses;
(B) Marginal expenses; and
(C) A generally recognized expense table based on fully allocated expenses representing
a significant portion of insurance companies and approved by the commissioner.
(ii) Marginal expenses may be used only if greater than a generally recognized expense
table. If no generally recognized expense table is approved, fully allocated expenses
must be used.
(12) "Non-term group life� means a group policy or individual policies of life insurance
issued to members of an employer group or other permitted group where:
(i) Every plan of coverage was selected by the employer or other group representative;
(ii) Some portion of the premium is paid by the group or through payroll deduction; and
(iii) Group underwriting or simplified underwriting is used.
(13) "Policy owner� means the owner named in the policy or the certificate holder in the
case of a group policy.
(14) "Premium outlay� means the amount of premium assumed to be paid by the policy owner
or other premium payer out-of-pocket.
(15) "Self-supporting illustration� means an illustration of a policy form for which it
can be demonstrated that, when using experience assumptions underlying the disciplined
current scale, for all illustrated points in time on or after the fifteenth (15th)
policy anniversary or the twentieth (20th) policy anniversary for second-or-later-to-die
policies (or upon policy expiration if sooner), the accumulated value of all policy
cash flows equals or exceeds the total policy owner value available. For this purpose,
policy owner value will include cash surrender values and any other illustrated benefit
amounts available at the policy owner's election.