376.670. Provisions which shall be contained in life insurance policies, exceptions.
Provisions which shall be contained in life insurance policies,exceptions.
376.670. 1. In the case of policies issued on or after the operativedate of this section, as defined in subsection 14, no policy of lifeinsurance, except as stated in subsection 13, shall be delivered or issued fordelivery in this state unless it shall contain in substance the followingprovisions, or corresponding provisions which in the opinion of the directorof the department of insurance, financial institutions and professionalregistration are at least as favorable to the defaulting or surrenderingpolicyholder as are the minimum requirements specified in this section and areessentially in compliance with subsection 12a of this section:
(1) That, in the event of default in any premium payment, the companywill grant, upon proper request not later than sixty days after the due dateof the premium in default, a paid-up nonforfeiture benefit on a planstipulated in the policy, effective as of such due date, of such amount as maybe herein specified. In lieu of such stipulated paid-up nonforfeiturebenefit, the company may substitute, upon proper request not later than sixtydays after the due date of the premium in default, an actuarially equivalentalternative paid-up nonforfeiture benefit which provides a greater amount orlonger period of death benefits or, if applicable, a greater amount or earlierpayment of endowment benefits;
(2) That, upon surrender of the policy within sixty days after the duedate of any premium payment in default after premiums have been paid for atleast three full years in the case of ordinary insurance or five full years inthe case of industrial insurance, the company will pay, in lieu of any paid-upnonforfeiture benefit, a cash surrender value of such amount as may be hereinspecified;
(3) That a specified paid-up nonforfeiture benefit shall becomeeffective as specified in the policy unless the person entitled to make suchelection elects another available option not later than sixty days after thedue date of the premium in default;
(4) That, if the policy shall have become paid up by completion of allpremium payments or if it is continued under any paid-up nonforfeiture benefitwhich became effective on or after the third policy anniversary in the case ofordinary insurance or the fifth policy anniversary in the case of industrialinsurance, the company will pay, upon surrender of the policy within thirtydays after any policy anniversary, a cash surrender value of such amount asmay be herein specified;
(5) In the case of policies which cause, on a basis guaranteed in thepolicy, unscheduled changes in benefits or premiums, or which provide anoption for changes in benefits or premiums other than a change to a newpolicy, a statement of the mortality table, interest rate, and method used incalculating cash surrender values and the paid-up nonforfeiture benefitsavailable under the policy. In the case of all other policies, a statement ofthe mortality table and interest rate used in calculating the cash surrendervalues and the paid-up nonforfeiture benefits available under the policy,together with a table showing the cash surrender value, if any, and paid-upnonforfeiture benefit, if any, available under the policy on each policyanniversary either during the first twenty policy years or during the term ofthe policy, whichever is shorter, such values and benefits to be calculatedupon the assumption that there are no dividends or paid-up additions creditedto the policy and that there is no indebtedness to the company on the policy;
(6) A statement that the cash surrender values and the paid-upnonforfeiture benefits available under the policy are not less than theminimum values and benefits required by or pursuant to the insurance law ofthe state in which the policy is delivered; an explanation of the manner inwhich the cash surrender values and the paid-up nonforfeiture benefits arealtered by the existence of any paid-up additions credited to the policy orany indebtedness to the company on the policy; if a detailed statement of themethod of computation of the values and benefits shown in the policy is notstated therein, a statement that such method of computation has been filedwith the insurance supervisory official of the state in which the policy isdelivered; and a statement of the method to be used in calculating the cashsurrender value and paid-up nonforfeiture benefit available under the policyon any policy anniversary beyond the last anniversary for which such valuesand benefits are consecutively shown in the policy.
2. Any of the foregoing provisions or portions thereof not applicable byreason of the plan of insurance may, to the extent inapplicable, be omittedfrom the policy.
3. The company shall reserve the right to defer the payment of any cashsurrender value for a period of six months after demand therefor withsurrender of the policy.
4. (1) Any cash surrender value available under the policy in the eventof default in a premium payment due on any policy anniversary, whether or notrequired by subsection 1, shall be an amount not less than the excess, if any,of the present value, on such anniversary, of the future guaranteed benefitswhich would have been provided for by the policy if there had been no default,including any existing paid-up additions, over the sum of the then presentvalue of the adjusted premiums as defined in subsections 6, 7, 8, 8a, 9, 10,10a, and 10b corresponding to premiums which would have fallen due on andafter such anniversary, and the amount of any indebtedness to the company onthe policy.
(2) For any policy issued on or after the operative date of subsection10b of this section which provides supplemental life insurance or annuitybenefits at the option of the insured for an identifiable additional premiumby rider or supplemental policy provision, the cash surrender value referredto in subdivision (1) of this subsection shall be an amount not less than thesum of the cash surrender value for an otherwise similar policy issued at thesame age without such rider or supplemental policy provision and the cashsurrender value for a policy which provides only the benefits otherwiseprovided by such rider or supplemental policy provision.
(3) For any family policy issued on or after the operative date ofsubsection 10b of this section which defines a primary insured and providesterm insurance on the life of the spouse of the primary insured expiringbefore the spouse's age seventy-one, the cash surrender value referred to insubdivision (1) of this subsection shall be an amount not less than the sum ofthe cash surrender value for an otherwise similar policy issued at the sameage without such term insurance on the life of the spouse and the cashsurrender value for a policy which provides only the benefits otherwiseprovided by such term insurance on the life of the spouse.
(4) Any cash surrender value available within thirty days after anypolicy anniversary under any policy paid up by completion of all premiumpayments or any policy continued under any paid-up nonforfeiture benefit,whether or not required by subsection 1, shall be an amount not less than thepresent value, on such anniversary, of the future guaranteed benefits providedfor the policy, including any existing paid-up additions, decreased by anyindebtedness to the company on the policy.
5. Any paid-up nonforfeiture benefit available under the policy in theevent of default in a premium payment due on any policy anniversary shall besuch that its present value as of such anniversary shall be at least equal tothe cash surrender value then provided for by the policy or, if none isprovided for, that cash surrender value which would have been required by thissection in the absence of the condition that premiums shall have been paid forat least a specified period.
6. This subsection and subsections 7, 8, 8a, and 9 of this section shallnot apply to policies issued on or after the operative date of subsection 10bof this section. Except as provided in subsection 8a, the adjusted premiumsfor any policy shall be calculated on an annual basis and shall be suchuniform percentage of the respective premiums specified in the policy for eachpolicy year, excluding any extra premiums charged because of impairments orspecial hazards, that the present value, at the date of issue of the policy,of all such adjusted premiums shall be equal to the sum of:
(1) The then present value of the future guaranteed benefits providedfor by the policy;
(2) Two percent of the amount of insurance, if the insurance be uniformin amount, or of the equivalent uniform amount, as herein defined, if theamount of insurance varies with duration of the policy;
(3) Forty percent of the adjusted premium for the first policy year;
(4) Twenty-five percent of either the adjusted premiums for the firstpolicy year or the adjusted premium for a whole life policy of the sameuniform or equivalent uniform amount with uniform premiums for the whole oflife issued at the same age for the same amount of insurance, whichever isless.
7. Provided, however, that in applying the percentages specified insubdivisions (3) and (4) of subsection 6, no adjusted premium shall be deemedto exceed four percent of the amount of insurance or uniform amount equivalentthereto. The date of issue of a policy for the purpose of subsections 6, 7,8, 8a and 9 shall be the date as of which the rated age of the insured isdetermined.
8. In the case of a policy providing an amount of insurance varying withduration of the policy, the equivalent uniform amount thereof for the purposeof subsections 6, 7, 8, 8a and 9 shall be deemed to be the uniform amount ofinsurance provided by an otherwise similar policy, containing the sameendowment benefit or benefits, if any, issued at the same age and for the sameterm, the amount of which does not vary with duration and the benefits underwhich have the same present value at the date of issue as the benefits underthe policy; provided, however, that in the case of a policy providing avarying amount of insurance issued on the life of a child under age ten, theequivalent uniform amount may be computed as though the amount of insuranceprovided by the policy prior to the attainment of age ten were the amountprovided by such policy at age ten.
8a. The adjusted premiums for any policy providing term insurancebenefits by rider or supplemental policy provision shall be equal to (a) theadjusted premiums for an otherwise similar policy issued at the same agewithout such term insurance benefits, increased, during the period for whichpremiums for such term insurance benefits are payable, by (b) the adjustedpremiums for such term insurance, the foregoing items (a) and (b) beingcalculated separately and as specified in subsections 6, 7 and 8 except that,for the purposes of subdivisions (2), (3) and (4) of subsection 6, the amountof insurance or equivalent uniform amount of insurance used in the calculationof the adjusted premiums referred to in (b) shall be equal to the excess ofthe corresponding amount determined for the entire policy over the amount usedin the calculation of the adjusted premiums in (a).
9. Except as otherwise provided in subsections 10 and 10a, all adjustedpremiums and present values referred to in this section shall, for allpolicies of ordinary insurance, be calculated on the basis of theCommissioners 1941 Standard Ordinary Mortality Table, provided that for anycategory of ordinary insurance issued on and after the effective date of thisamendment on female risks, adjusted premiums and present values may becalculated according to an age not more than three years younger than theactual age of the insured and such calculations for all policies of industrialinsurance shall be made on the basis of the 1941 Standard Industrial MortalityTable. All calculations shall be made on the basis of the rate of interest,not exceeding three and one-half percent per annum, specified in the policyfor calculating cash surrender values and paid-up nonforfeiture benefits;provided, however, that in calculating the present value of any paid-up terminsurance with accompanying pure endowment, if any, offered as a nonforfeiturebenefit, the rates of mortality assumed may be not more than one hundred andthirty percent of the rates of mortality according to such applicable table;provided, further, that for insurance issued on a substandard basis, thecalculation of any such adjusted premiums and present values may be based onsuch other table of mortality as may be specified by the company and approvedby the director.
10. This subsection shall not apply to ordinary policies issued on orafter the operative date of subsection 10b. In the case of ordinary policiesissued on or after the operative date provided in this subsection, alladjusted premiums and present values referred to in this section shall becalculated on the basis of the Commissioners 1958 Standard Ordinary MortalityTable and the rate of interest specified in the policy for calculating cashsurrender values and paid-up nonforfeiture benefits, provided that such rateof interest shall not exceed three and one-half percent per annum, except thata rate of interest not exceeding four percent per annum may be used forpolicies issued on or after September 28, 1975, and prior to September 28,1979, and a rate of interest not exceeding five and one-half percent per annummay be used for policies issued on or after September 28, 1979, and providedthat for any category of ordinary insurance issued on female risks, adjustedpremiums and present values may be calculated according to an age not morethan six years younger than the actual age of the insured; provided, however,that in calculating the present value of any paid-up term insurance withaccompanying pure endowment, if any, offered as a nonforfeiture benefit, therates of mortality assumed may be not more than those shown in theCommissioners 1958 Extended Term Insurance Table; provided, further, that forinsurance issued on a substandard basis, the calculation of any such adjustedpremiums and present values may be based on such other table of mortality asmay be specified by the company and approved by the director. After the datewhen this subsection becomes effective, any company may file with the directora written notice of its election to comply with the provisions of thissubsection after a specified date before January 1, 1966. After the filing ofsuch notice, then upon such specified date, which shall be the operative dateof this subsection for such company, this subsection shall become operativewith respect to the ordinary policies thereafter issued by such company. If acompany makes no such election, the operative date of this subsection for suchcompany shall be January 1, 1966.
10a. This subsection shall not apply to industrial policies issued on orafter the operative date of subsection 10b. In the case of industrialpolicies issued on or after the operative date of this subsection as definedherein, all adjusted premiums and present values referred to in this sectionshall be calculated on the basis of the Commissioners 1961 Standard IndustrialMortality Table and the rate of interest specified in the policy forcalculating cash surrender values and paid-up nonforfeiture benefits, providedthat such rate of interest shall not exceed three and one-half percent perannum, except that a rate of interest not exceeding four percent per annum maybe used for policies issued on or after September 28, 1975, and prior toSeptember 28, 1979, and a rate of interest not exceeding five and one-halfpercent per annum may be used for policies issued on or after September 28,1979; provided, however, that in calculating the present value of any paid-upterm insurance with accompanying pure endowment, if any, offered as anonforfeiture benefit, the rates of mortality assumed may be not more thanthose shown in the Commissioners 1961 Industrial Extended Term InsuranceTable; provided, further, that for insurance issued on a substandard basis,the calculation of any such adjusted premiums and present values may be basedon such other table of mortality as may be specified by the company andapproved by the director. After the date when this subsection becomeseffective, any company may file with the director a written notice of itselection to comply with the provisions of this subsection after a specifieddate before January 1, 1968. After the filing of such notice, then upon suchspecified date, which shall be the operative date of this subsection for suchcompany, this subsection shall become operative with respect to the industrialpolicies thereafter issued by such company. If a company makes no suchelection, the operative date of this subsection for such company shall beJanuary 1, 1968.
10b. (1) This subsection shall apply to all policies issued on or afterthe operative date of this subsection as defined herein. Except as providedin subdivision (7) of this subsection, the adjusted premiums for any policyshall be calculated on an annual basis and shall be such uniform percentage ofthe respective premiums specified in the policy for each policy year,excluding amounts payable as extra premiums to cover impairments or specialhazards and also excluding any uniform annual contract charge or policy feespecified in the policy in a statement of the method to be used in calculatingthe cash surrender values and paid-up nonforfeiture benefits, that the presentvalue, at the date of issue of the policy, of all adjusted premiums shall beequal to the sum of:
(a) The then present value of the future guaranteed benefits providedfor by the policy;
(b) One percent of either the amount of insurance, if the insurance beuniform in amount, or the average amount of insurance at the beginning of eachof the first ten policy years; and
(c) One hundred twenty-five percent of the nonforfeiture net levelpremium as hereinafter defined. In applying the percentage specified in paragraph (c) above, no nonforfeiturenet level premium shall be deemed to exceed four percent of either the amountof insurance, if the insurance be uniform in amount, or the average amount ofinsurance at the beginning of each of the first ten policy years. The date ofissue of a policy for the purpose of this subsection shall be the date as ofwhich the rated age of the insured is determined.
(2) The nonforfeiture net level premium shall be equal to the presentvalue, at the date of issue of the policy, of the guaranteed benefits providedfor by the policy divided by the present value, at the date of issue of thepolicy, of an annuity of one per annum payable on the date of issue of thepolicy and on each anniversary of such policy on which a premium falls due.
(3) In the case of policies which cause, on a basis guaranteed in thepolicy, unscheduled changes in benefits or premiums, or which provide anoption for changes in benefits or premiums other than a change to a newpolicy, the adjusted premiums and present values shall initially be calculatedon the assumption that future benefits and premiums do not change from thosestipulated at the date of issue of the policy. At the time of any such changein the benefits or premiums the future adjusted premiums, nonforfeiture netlevel premiums and present values shall be recalculated on the assumption thatfuture benefits and premiums do not change from those stipulated by the policyimmediately after the change.
(4) Except as otherwise provided in subdivision (7) of this subsection,the recalculated future adjusted premiums for any such policy shall be suchuniform percentage of the respective future premiums specified in the policyfor each policy year, excluding amounts payable as extra premiums to coverimpairments and special hazards, and also excluding any uniform annualcontract charge or policy fee specified in the policy in a statement of themethod to be used in calculating the cash surrender values and paid-upnonforfeiture benefits, that the present value, at the time of change to thenewly defined benefits or premiums, of all such future adjusted premiums shallbe equal to the excess of (A) the sum of the then present value of the thenfuture guaranteed benefits provided for by the policy and the additionalexpense allowance, if any, over (B) the then cash surrender value, if any, orpresent value of any paid-up nonforfeiture benefit under the policy.
(5) The additional expense allowance, at the time of the change to thenewly defined benefits or premiums, shall be the sum of:
(a) One percent of the excess, if positive, of the average amount ofinsurance at the beginning of each of the first ten policy years subsequent tothe change over the average amount of insurance prior to the change at thebeginning of each of the first ten policy years subsequent to the time of themost recent previous change, or, if there has been no previous change, thedate of issue of the policy; and
(b) One hundred twenty-five percent of the increase, if positive, in thenonforfeiture net level premium.
(6) The recalculated nonforfeiture net level premium shall be equal tothe result obtained by dividing (a) by (b) where:
(a) Equals the sum of:
a. The nonforfeiture net level premium applicable prior to the changetimes the present value of an annuity of one per annum payable on eachanniversary of the policy on or subsequent to the date of the change on whicha premium would have fallen due had the change not occurred; and
b. The present value of the increase in future guaranteed benefitsprovided for by the policy; and
(b) Equals the present value of an annuity of one per annum payable oneach anniversary of the policy on or subsequent to the date of change on whicha premium falls due.
(7) Notwithstanding any other provisions of this subsection to thecontrary, in the case of a policy issued on a substandard basis which providesreduced graded amounts of insurance so that in each policy year such policyhas the same tabular mortality cost as an otherwise similar policy issued onthe standard basis which provides higher uniform amounts of insurance,adjusted premiums and present values for such substandard policy may becalculated as if it were issued to provide such higher uniform amounts ofinsurance on the standard basis.
(8) All adjusted premiums and present values referred to in this sectionshall for all policies of ordinary insurance be calculated on the basis of theCommissioners 1980 Standard Ordinary Mortality Table or, at the election ofthe company for any one or more specified plans of life insurance, theCommissioners 1980 Standard Ordinary Mortality Table with Ten-Year SelectMortality Factors. All adjusted premiums and present values referred to inthis section shall for all policies of industrial insurance be calculated onthe basis of the Commissioners 1961 Standard Industrial Mortality Table. Alladjusted premiums and present values referred to in this section shall for allpolicies issued in a particular calendar year be calculated on the basis of arate of interest not exceeding the nonforfeiture interest rate as defined inthis subsection for policies issued in that calendar year.
(9) Except as provided in subdivision (8) of this subsection:
(a) At the option of the company, calculations for all policies issuedin a particular calendar year may be made on the basis of a rate of interestnot exceeding the nonforfeiture interest rate, as defined in this subsection,for policies issued in the immediately preceding calendar year;
(b) Under any paid-up nonforfeiture benefit, including any paid-updividend additions, any cash surrender value available, whether or notrequired by subsection 1 of this section, shall be calculated on the basis ofthe mortality table and rate of interest used in determining the amount ofsuch paid-up nonforfeiture benefit and paid-up dividend additions, if any;
(c) A company may calculate the amount of any guaranteed paid-upnonforfeiture benefit including any paid-up additions under the policy on thebasis of an interest rate no lower than that specified in the policy forcalculating cash surrender values;
(d) In calculating the present value of any paid-up term insurance withaccompanying pure endowment, if any, offered as a nonforfeiture benefit, therates of mortality assumed may be not more than those shown in theCommissioners 1980 Extended Term Insurance Table for policies of ordinaryinsurance and not more than the Commissioners 1961 Industrial Extended TermInsurance Table for policies of industrial insurance;
(e) For insurance issued on a substandard basis, the calculation of anysuch adjusted premiums and present values may be based on appropriatemodifications of the tables listed in subdivision (d) of this subsection;
(f) Any ordinary mortality tables, adopted after 1980 by the NationalAssociation of Insurance Commissioners, that are approved by regulationpromulgated by the director for use in determining the minimum nonforfeiturestandard may be substituted for the Commissioners 1980 Standard OrdinaryMortality Table with or without Ten-Year Select Mortality Factors or for theCommissioners 1980 Extended Term Insurance Table;
(g) Any industrial mortality tables, adopted after 1980 by the NationalAssociation of Insurance Commissioners, that are approved by regulationpromulgated by the director for use in determining the minimum nonforfeiturestandard may be substituted for the Commissioners 1961 Standard IndustrialMortality Table or* for the Commissioners 1961 Industrial Extended TermInsurance Table;
(10) The nonforfeiture interest rate per annum for any policy issued ina particular calendar year shall be equal to one hundred twenty-five percentof the calendar year statutory valuation interest rate for such policy asdefined in section 376.380 rounded to the nearer one-quarter of one percent;
(11) Notwithstanding any other provision of law to the contrary, anyrefiling of nonforfeiture values or their methods of computation for anypreviously approved policy form which involves only a change in the interestrate or mortality table used to compute nonforfeiture values shall not requirerefiling of any other provisions of that policy form;
(12) After the effective date of this subsection, any company may filewith the director a written notice of its election to comply with theprovisions of this subsection after a specified date before January 1, 1989,which shall be the operative date of this subsection for such company. If acompany makes no such election, the operative date of this subsection for suchcompany shall be January 1, 1989.
10c. In the case of any plan of life insurance which provides for futurepremium determination, the amounts of which are to be determined by theinsurance company based on then estimates of future experience, or in the caseof any plan of life insurance which is of such a nature that minimum valuescannot be determined by the methods described in subsections 1 to 10b of thissection, then:
(1) The director must be satisfied that the benefits provided under theplan are substantially as favorable to policyholders and insureds as theminimum benefits otherwise required by subsections 1 to 10b of this section;
(2) The director must be satisfied that the benefits and the pattern ofpremiums of that plan are not such as to mislead prospective policyholders orinsureds;
(3) The cash surrender values and paid-up nonforfeiture benefitsprovided by the plan must not be less than the minimum values and benefitsrequired for the plan computed by a method consistent with the principles ofthis section, as determined by regulations promulgated by the director.
11. Any cash surrender value and any paid-up nonforfeiture benefit,available under the policy in the event of default in a premium payment due atany time other than on the policy anniversary, shall be calculated withallowance for the lapse of time and the payment of fractional premiums beyondthe last preceding policy anniversary. All values referred to in subsections4, 5, 6, 7, 8, 8a, 9, 10, 10a and 10b of this section may be calculated uponthe assumption that any death benefit is payable at the end of the policy yearof death. The net value of any paid-up additions, other than paid-up termadditions, shall be not less than the amounts used to provide such additions.
12. Notwithstanding the provisions of subsection 4, additional benefitspayable:
(1) In the event of death or dismemberment by accident or accidentalmeans;
(2) In the event of total and permanent disability;
(3) As reversionary annuity or deferred reversionary annuity benefits;
(4) As term insurance benefits provided by a rider or supplementalpolicy provision to which, if issued as a separate policy, this section wouldnot apply;
(5) As term insurance on the life of a child or on the lives of childrenprovided in a policy on the life of a parent of the child, if such terminsurance expires before the child's age is twenty-six, is uniform in amountafter the child's age is one, and has not become paid up by reason of thedeath of a parent of the child; and
(6) As other policy benefits additional to life insurance and endowmentbenefits, and premiums for all such additional benefits; shall be disregardedin ascertaining cash surrender values and nonforfeiture benefits required bythis section, and no such additional benefits shall be required to be includedin any paid-up nonforfeiture benefits.
12a. (1) This subsection, in addition to all other applicablesubsections of this section, shall apply to all policies issued on or afterJanuary 1, 1986. Any cash surrender value available under the policy in theevent of default in a premium payment due on any policy anniversary shall bein an amount which does not differ by more than two-tenths of one percent ofeither the amount of insurance, if the insurance be uniform in amount, or theaverage amount of insurance at the beginning of each of the first ten policyyears, from the sum of the greater of zero and the basic cash valuehereinafter specified and the present value of any existing paid-up additionsless the amount of any indebtedness to the company under the policy.
(2) The basic cash value shall be equal to the present value, on suchanniversary, of the future guaranteed benefits which would have been providedfor by the policy, excluding any existing paid-up additions and beforededuction of any indebtedness to the company, if there had been no default,less the then present value of the nonforfeiture factors, as defined insubdivision (3) of this subsection, corresponding to premiums which would havefallen due on and after such anniversary. The effects on the basic cash valueof supplemental life insurance or annuity benefits or of family coverage, asdescribed in subsection 4 of this section or in subsections 6, 7, 8, 8a and 9of this section, whichever is applicable, shall be the same as are the effectsspecified in subsection 4 of this section or in subsections 6, 7, 8, 8a and 9of this section, whichever is applicable on the cash surrender values definedin that subsection.
(3) The nonforfeiture factor for each policy year shall be an amountequal to a percentage of the adjusted premium for the policy year, as definedin subsections 6, 7, 8, 8a and 9 of this section or in subsection 10b of thissection, whichever is applicable. Except as is required by subdivision (4) ofthis subsection, such percentage:
(a) Must be the same percentage for each policy year between the secondpolicy anniversary and the later of the fifth policy anniversary or the firstpolicy anniversary at which there is available under the policy a cashsurrender value in an amount, before including any paid-up additions andbefore deducting any indebtedness, of at least two-tenths of one percent ofeither the amount of insurance, if the insurance be uniform in amount, or theaverage amount of insurance at the beginning of each of the first ten policyyears; and
(b) Must be such that no percentage after the later of the two policyanniversaries specified in paragraph (a) of this subdivision may apply tofewer than five consecutive policy years. No basic cash value may be less than the value which would be obtained if theadjusted premiums for the policy, as defined in subsections 6, 7, 8, 8a and 9of this section or in subsection 10b of this section, whichever is applicable,were substituted for the nonforfeiture factors in the calculation of the basiccash value.
(4) All adjusted premiums and present values referred to in thissubsection shall for a particular policy be calculated on the same mortalityand interest bases as are used in demonstrating the policy's compliance withthe other subsections of this section. The cash surrender values referred toin this subsection shall include any endowment benefits provided for by thepolicy.
(5) Any cash surrender value available other than in the event ofdefault in a premium payment due on a policy anniversary, and the amount ofany paid-up nonforfeiture benefit available under the policy in the event ofdefault in a premium payment shall be determined in manners consistent withthe manners specified for determining the analogous minimum amounts insubsections 3, 4, 5, 10b and 11 of this section. The amounts of any cashsurrender values and of any paid-up nonforfeiture benefits granted inconnection with additional benefits such as those listed as subdivisions (1)to (6) in subsection 12 shall conform with the principles of this subsection.
13. (1) This section shall not apply to any of the following:
(a) Reinsurance;
(b) Group insurance;
(c) Pure endowments;
(d) Annuities or reversionary annuity contracts;
(e) Term policies of uniform amounts, which provide no guaranteednonforfeiture or endowment benefits, or renewals thereof of twenty years orless expiring before age seventy-one, for which uniform premiums are payableduring the entire term of the policy;
(f) Term policies of decreasing amounts, which provide no guaranteednonforfeiture or endowment benefits, on which each adjusted premiumcalculated as specified in subsections 6, 7, 8, 8a, 9, 10, 10a, and 10b isless than the adjusted premium so calculated on a term policy of uniformamount, or renewal thereof, which provides no guaranteed nonforfeiture orendowment benefits, issued at the same age and for the same initial amount ofinsurance, and for a term of twenty years or less expiring before ageseventy-one, for which uniform premiums are payable during the entire term ofthe policy;
(g) Policies, which provide no guaranteed nonforfeiture or endowmentbenefits, for which no cash surrender value, if any, or present value of anypaid-up nonforfeiture benefit, at the beginning of any policy year, calculatedas specified in subsections 4 to 10b of this section, exceeds two and one-halfpercent of the amount of insurance at the beginning of the same policy year;
(h) Policies which shall be delivered outside this state through anagent or other representative of the company issuing the policies.
(2) For purposes of determining the applicability of this section, theexpiration date for a joint term life insurance policy shall be the age atexpiry of the oldest life.
14. After the effective date of this section, any company may file withthe director a written notice of its election to comply with the provisions ofthis section after a specified date before January 1, 1948. After the filingof such notice, then upon such specified date, which shall be the operativedate for such company, this section shall become operative with respect to thepolicies thereafter issued by such company. If a company makes no suchelection, the operative date of this section for such company shall be January1, 1948.
(L. 1943 p. 596 § 5855A, A.L. 1959 H.B. 267, A.L. 1961 p. 181, A.L. 1965 p. 581, A.L. 1975 S.B. 116, A.L. 1979 S.B. 325, A.L. 1982 S.B. 469)*Word "or" does not appear in original rolls.
(1959) Assignment of policy for purpose of collecting cash surrender value after lapse held not barred by policy provision against assignment of the "policy or any of its benefits". Magers v. National Life and Accident Ins. Co. (Mo.), 329 S.W.2d 752.
(1961) Statutes relating to reserves and nonforfeiture provisions of life insurance policies do not apply to term policies. Kern v. Prudential Ins. Co. of America, 293 F.2d 251.