§ 27-62-5 - General rules and prohibitions.
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.