20-431.03. Life insurance policy illustrations; requirements; prohibitions

A. An illustration that is used in the sale of a life insurance policy shall be clearly labeled life insurance illustration and shall contain all of the following:

1. The name of the insurer that issued the policy.

2. The name and business address of the producer or the insurer's authorized representative, if any.

3. The name, age and sex of the proposed insured, unless a composite illustration is allowed under this article.

4. The underwriting or rating classification on which the illustration is based.

5. The generic name of the policy, the company product name, if different from the generic name of the policy, and the form number.

6. The initial death benefit.

7. Dividend option election or application of nonguaranteed elements, if applicable.

B. When using an illustration in the sale of a life insurance policy, an insurer or its producers or other authorized representatives may not:

1. Represent the policy as anything other than a life insurance policy.

2. Use or describe nonguaranteed elements in a manner that is misleading or that has the capacity or tendency to mislead.

3. State or imply that the payment or amount of nonguaranteed elements is guaranteed.

4. Use an illustration that does not comply with this article.

5. Use an illustration that depicts policy performance that is more favorable to the policyowner than that produced by the illustrated scale. 

6. Provide an applicant with an incomplete illustration.

7. Represent in any way that premium payments will not be required for each year of the policy in order to maintain the illustrated death benefits, unless that is the fact.

8. Use the term vanish or vanishing premium or a similar term that implies the policy becomes paid up to describe a plan for using nonguaranteed elements to pay a portion of future premiums.

9. Except for policies that can never develop nonforfeiture values, use a lapse-supported illustration.

10. Use an illustration that is not a self-supporting illustration.

C. If an interest rate that is used to determine the illustrated nonguaranteed elements is shown, the interest rate may not be greater than the earned interest rate underlying the disciplined current scale.