§ 27-4.3-2 - Nonforfeiture benefits.
SECTION 27-4.3-2
§ 27-4.3-2 Nonforfeiture benefits. –(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 unlessthey shall contain in substance the following provisions, or correspondingprovisions which in the opinion of the commissioner of insurance are at leastas favorable to the defaulting or surrendering policyholder as are the minimumrequirements 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, theinsurance company will grant, upon proper request not later than sixty (60)days after the due date of the premium in default, a paid up nonforfeiturebenefit on a plan stipulated in the policy, effective as of the due date, ofthe amount as specified in this chapter. In lieu of the stipulated paid upnonforfeiture benefit, the insurance company may substitute, upon properrequest not later than sixty (60) days after the due date of the premium indefault, an actuarially equivalent alternative paid up nonforfeiture benefitwhich provides a greater amount or longer period of death benefits or, ifapplicable, a greater amount or earlier payment of endowment benefits;
(2) That upon surrender of the policy within sixty (60) daysafter the due date of any premium payment in default after premiums have beenpaid for at least three (3) full years in the case of ordinary insurance orfive (5) full years in the case of industrial insurance, the insurance companywill pay, in lieu of any paid up nonforfeiture benefit, a cash surrender valueof an amount as specified in this chapter;
(3) That a specified paid up nonforfeiture benefit shallbecome effective as specified in the policy unless the person entitled to makean election elects another available option not later than sixty (60) daysafter the due date of the premium in default;
(4) That if the policy shall have become paid up bycompletion of all premium payments or if it is continued under any paid-upnonforfeiture benefit which became effective on or after the third policyanniversary in the case of ordinary insurance or the fifth policy anniversaryin the case of industrial insurance, the insurance company will pay, uponsurrender of the policy within thirty (30) days after any policy anniversary, acash surrender value of an amount as specified in this chapter;
(5) In the case of policies which cause, on a basisguaranteed in the policy, unscheduled changes in benefits or premiums or whichprovide an option for changes in benefits or premiums other than a change to anew policy, a statement of the mortality table, interest rate, and method usedin calculating 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 (20) policy years or during the termof the policy, whichever is shorter; the 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 insurance company on thepolicy; and
(6) A statement that the cash surrender values and the paidup nonforfeiture benefits available under the policy are not less than theminimum values and benefits required by or pursuant to the insurance law of thestate in which the policy is delivered; an explanation of the manner in whichthe cash surrender values and the paid up nonforfeiture benefits are altered bythe existence of any paid up additions credited to the policy or anyindebtedness to the insurance company on the policy; if a detailed statement ofthe method of computation of the values and benefits shown in the policy is notstated in the policy, a statement that the 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 a paid up nonforfeiture benefit available under the policyon any policy anniversary beyond the last anniversary for which the values andbenefits are consecutively shown in the policy.
(b) Any of the provisions of subsection (a) not applicable byreason of the plan of insurance may, to the extent inapplicable, be omittedfrom the policy.
(c) The insurance company shall reserve the right to deferthe payment of any cash surrender value for a period of six (6) months afterdemand for the payment with surrender of the policy.