§ 27-62-5 - General rules and prohibitions. - Rhode Island Statutes

SECTION 27-62-5

   § 27-62-5  General rules and prohibitions.– (a) An illustration used in the sale of a life insurance policy shall satisfythe applicable requirements of this chapter, be clearly labeled "life insuranceillustration" and contain the following basic information:

   (1) Name of insurer;

   (2) Name and business address of producer or insurer'sauthorized representative, if any;

   (3) Name, age and sex of proposed insured, except where acomposite illustration is permitted under this chapter;

   (4) Underwriting or rating classification upon which theillustration is based;

   (5) Generic name of policy, the company product name, ifdifferent, and form number;

   (6) Initial death benefit; and

   (7) Dividend option election or application of non-guaranteedelements, if applicable.

   (b) When using an illustration in the sale of life insurancepolicy, an insurer or its producers or other authorized representative shallnot:

   (1) Represent the policy as anything other than a lifeinsurance policy;

   (2) Use or describe non-guaranteed elements in a manner thatis misleading or has the capacity or tendency to mislead;

   (3) State or imply that the payment or amount ofnon-guaranteed elements is guaranteed;

   (4) Use an illustration that does not comply with therequirements of this chapter;

   (5) Use an illustration that at any policy duration depictspolicy performance more favorable to the policy owner than that produced by theillustrated scale of the insurer whose policy is being illustrated;

   (6) Provide an applicant with an incomplete illustration;

   (7) Represent in any way that premium payments will not berequired for each year of the policy in order to maintain the illustrated deathbenefits, unless that is the fact;

   (8) Use the term "vanish" or "vanishing premium," or asimilar term that implies the policy becomes paid up, to describe a plan forusing non-guaranteed elements to pay a portion of future premiums;

   (9) Except for policies that can never develop nonforfeiturevalues, use an illustration that is "lapse supported"; or

   (10) Use an illustration that is not "self-supporting."

   (c) If an interest rate used to determine the illustratednon-guaranteed elements is shown, it shall not be greater than the earnedinterest rate underlying the disciplined current scale.