(a) Policies issued on and after January 1, 1994, except as stated in § 27-4.3-9, shall not be delivered or issued for delivery in this state unless they shall contain in substance the following provisions, or corresponding provisions which in the opinion of the commissioner of insurance are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements specified in this chapter and are essentially in compliance with § 27-4.3-8:
(1) That in the event of default in any premium payment, the insurance company will grant, upon proper request not later than sixty (60) days after the due date of the premium in default, a paid up nonforfeiture benefit on a plan stipulated in the policy, effective as of the due date, of the amount as specified in this chapter. In lieu of the stipulated paid up nonforfeiture benefit, the insurance company may substitute, upon proper request not later than sixty (60) 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;
(2) That upon surrender of the policy within sixty (60) days after the due date of any premium payment in default after premiums have been paid for at least three (3) full years in the case of ordinary insurance or five (5) full years in the case of industrial insurance, the insurance company will pay, in lieu of any paid up nonforfeiture benefit, a cash surrender value of an amount as specified in this chapter;
(3) 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 (60) days after the due date of the premium in default;
(4) That if the policy shall have 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 insurance company will pay, upon surrender of the policy within thirty (30) days after any policy anniversary, a cash surrender value of an amount as specified in this chapter;
(5) 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 (20) 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 insurance company on the policy; and
(6) 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 insurance 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 a paid up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which the values and benefits are consecutively shown in the policy.
(b) Any of the provisions of subsection (a) not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy.
(c) The insurance company shall reserve the right to defer the payment of any cash surrender value for a period of six (6) months after demand for the payment with surrender of the policy.
History of Section.
P.L. 1993, ch. 180, § 1.