82-1-114-.0<span class="Normal--Char" style=" font-family: 'Times New Roman', 'Arial';
letter-spacing: 0pt;">1 Purpose.   2

482-1-114-.0<span class="Normal--Char" style=" font-family: 'Times New Roman', 'Arial';
letter-spacing: 0pt;">2 Authority.   2

482-1-114-.0<span class="Normal--Char" style=" font-family: 'Times New Roman', 'Arial';
letter-spacing: 0pt;">3 Applicability and Scope.   2

482-1-114-.0<span class="Normal--Char" style=" font-family: 'Times New Roman', 'Arial';
letter-spacing: 0pt;">4 Definitions.   3

482-1-114-.0<span class="Normal--Char" style=" font-family: 'Times New Roman', 'Arial';
letter-spacing: 0pt;">5 Policies to be Illustrated.   5

482-1-114-.0<span class="Normal--Char" style=" font-family: 'Times New Roman', 'Arial';
letter-spacing: 0pt;">6 General Rules and Prohibitions.   6

482-1-114-.07 Standards for Basic Illustrations.
  7

482-1-114-.08 Standards for Supplemental Illustrations.
  11

482-1-114-.09 Delivery of Illustration and Record
Retention.   11

482-1-114-.10 Annual Report; Notice to Policy Owners.
  13

482-1-114-.11 Annual Certifications.   14

482-1-114-.12 Penalties.   16

482-1-114-.13 Severability Clause.   16

482-1-114-.14 Effective Date.   17

482-1-114-.01 Purpose.  The purpose of this chapter is to provide rules
for life insurance policy illustrations that will protect consumers
and foster consumer education.  The chapter provides illustration
formats, prescribes standards to be followed when illustrations are
used, and specifies the disclosures that are required in connection
with illustrations.  The goals of this chapter are to ensure that
illustrations do not mislead purchasers of life insurance and to make
illustrations more understandable.  Insurers will, as far as possible,
eliminate the use of footnotes and caveats and define terms used in
the illustration in language that would be understood by a typical person
within the segment of the public to which the illustration is directed.

Author:  Commissioner of Insurance 

Statutory Authority:  Code of Alabama
1975, § 27-2-17 

History:  New October 15, 1996, Effective
January 1, 1998

482-1-114-.02 Authority.  This chapter is promulgated by the Commissioner of Insurance
pursuant to Section 27-2-17, Code of Alabama 1975.

Author:  Commissioner of Insurance 

Statutory Authority:  Code of Alabama
1975, § 27-2-17 

History:  New October 15, 1996, Effective
January 1, 1998

482-1-114-.03 Applicability and Scope.  This chapter applies to all group and individual
life insurance policies and certificates except:

A.  Variable life insurance;

B.  Individual and group annuity contracts;

C.  Credit life insurance; or

D.  Life insurance policies with no illustrated
death benefits on any individual exceeding $10,000.

Author:  Commissioner of Insurance 

Statutory Authority:  Code of Alabama
1975, § 27-2-17 

History:  New October 15, 1996, Effective
January 1, 1998

482-1-114-.04 Definitions.  For the purposes of this chapter:

A.  Actuarial Standards Board means the
board established by the American Academy of Actuaries to develop and
promulgate standards of actuarial practice.

B.  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.

C.  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.

D.  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:

(1) Are consistent with all provisions of this
chapter;

(2) Limit a disciplined current scale to reflect
only actions that have already been taken or events that have already
occurred;

(3) 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

(4) Do not permit assumed expenses to be less
than minimum assumed expenses.

E.  Generic name means a short title descriptive
of the policy being illustrated such as whole life, term life or
flexible premium adjustable life.

F.  Guaranteed elements and non-guaranteed
elements

(1) Guaranteed elements means the premiums,
benefits, values, credits or charges under a policy of life insurance
that are guaranteed and determined at issue.

(2) 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.

G.  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:

(1) The disciplined current scale; or

(2) The currently payable scale.

H.  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 below:

(1) Basic illustration means a ledger or proposal
used in the sale of a life insurance policy that shows both guaranteed
and non-guaranteed elements.

(2) 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 not permitt