Deregulation of Life Insurance Forms; Notice 2001-07
[31 Pa.B. 3491]
On September 1, 1996, the Insurance Commissioner (Commissioner), by notice at 26 Pa.B. 4147 (August 24, 1996), deregulated certain life insurance and annuity forms. Changes to that notice are now necessary. Under section 354 of The Insurance Company Law of 1921 (act) (40 P. S. § 477b) and to sections 404(f) and 615 of the Fraternal Benefit Societies Code (code) (40 P. S. §§ 1142-404(f) and 1142-615), the Commissioner is modifying and expanding the types of deregulated life insurance and annuity forms to include those listed in Annex A.
Section 354 of the act requires that all policy forms for life insurance and annuities, as well as other lines of business, be submitted to the Commissioner for prior approval before issuance to any consumer in this Commonwealth. However, that law gives the Commissioner express authority to exempt forms from the prior approval requirement. The review and approval of the forms used by fraternal benefit societies is governed by section 404(f) of the act, which provides that the forms shall be filed in the manner provided for like policies issued by life, accident and health insurers under section 354 of the act. Accordingly, the Commissioner hereby exempts from prior approval the types of forms listed in Annex A.
Insurers Subject to the Filing Requirements
Section 354 of the act applies to insurance companies, associations and exchanges, as defined in section 101 of the act (40 P. S. § 361). Additionally, section 404(f) of the code incorporates by reference the general provision laws, including section 354 of the act, that relate to the review and approval of policy forms. Therefore, this notice of deregulation of life and annuity forms also applies to fraternal benefit societies. Section 354 of the act does not regulate the approval of credit insurance forms, as defined in section 1007.2 of the Model Act for the Regulation of Credit Life Insurance and Credit Accident and Health Insurance (40 P. S. § 1007.2) and, therefore, these are not affected by the deregulation herein.
Forms That are Not Deregulated
The Commissioner's action to deregulate certain group forms does not extend to the following:
Previous Forms Included as Nonderegulated
Individual retirement annuity (IRA) group annuity policies and certificates and all riders, amendments, endorsements and applications used with them.
Synthetic guaranteed investment contracts and certificates and all riders, amendments, endorsements and applications used with them.
Forms that include both regulated and deregulated lines of business must continue to be submitted for prior approval.
Previous Forms Included as Nonderegulated But Modified
Group Universal or Group Variable Life policies other than those newly deregulated in section 5 of Annex A, and all certificates, riders, amendments, endorsements and applications used with them.
Additional Forms Included as Nonderegulated
Forms that include long-term care benefits or that meet the definition of ''long-term care insurance'' in section 1103 of the Long-Term Care Act (40 P. S. § 991.1103) must continue to be submitted for prior approval.
Continuing Authority of the Commissioner
Notwithstanding the implementation of this notice, the Commissioner shall retain complete authority to request and be provided a copy of any form being used in this Commonwealth, as provided by section 903(d) of the act (40 P. S. § 933(d)).
The Commissioner shall also retain complete discretionary authority to reassume regulatory authority over the types of forms deregulated hereunder.
Section 354 of the act does not regulate guaranteed investment contracts without annuity provisions and funding agreement contracts without annuity provisions. However, section 202 of the act (40 P. S. § 382) does not authorize life insurance companies to issue the contracts in this Commonwealth.
Notwithstanding the deregulation of the forms specified herein, all forms must continue to comply with applicable State law including, but not limited to:
Uniform Policy Provisions (40 P. S. § 510)
Standard Nonforfeiture Law for Life Insurance (40 P. S. § 510.1)
Group Life Insurance (40 P. S. § 532.1 et seq.)
Fraternal Benefit Societies Code (40 P. S. §§ 1142-401 and 1142-405).
This revised deregulation action is effective as of July 2, 2001.
Questions concerning this notice may be directed to Paul Makurath, Supervisor, Bureau of Life Insurance, Insurance Department, 1311 Strawberry Square, Harrisburg, PA 17120, (717) 783-4253 or firstname.lastname@example.org.
Deregulated Life Insurance and Annuity Forms
The Commissioner, by this notice, hereby deregulates the following lines of business under the authority of section 354 of The Insurance Company Law of 1921 (40 P. S. § 477b).
Previously Deregulated--No Modification
1) Individual Traditional Term Life policies (not including indeterminate premium, limited benefit1, modified premium2 or single premium term life policies)
2) Individual Traditional Whole Life policies (not including interest sensitive, indeterminate premium, limited benefit or modified premium2 whole life policies)
3) Individual Traditional Endowment policies (not including interest sensitive, indeterminate premium or modified premium2 endowment policies)
4) Individual Traditional Term Life riders (not including indeterminate premium, limited benefit1 or modified premium2 term life riders)
5) Individual Fixed Immediate Annuity policies, not including policies with market value adjustment or providing payments of interest only, and all riders, amendments and endorsements used with them.
6) Individual Annuity applications, except individual variable annuity applications.
7) Group Term Life policies and certificates. All riders, amendments, endorsements and applications used with them.
1) Individual Cost of Living, Guaranteed Purchase Option, Spouse Term, Children's Term, Family Term, Other Insured, Dividend Additions, Business Exchange and Substitute Insured riders.
2) Group Whole life policies and certificates (not including Universal Life policies and certificates other than those newly deregulated in section 5). All riders, amendments, endorsements and applications used with them.
3) Group Annuity policies and certificates (not including IRA Group Annuity policies and certificates, or synthetic guaranteed investment contracts and certificates). All riders, amendments, endorsements and applications used with them.
1) Unisex riders, except those that change cost of insurance rates or cash values under Universal Life or Variable Life policies.
2) Avocational or Vocational Questionnaires.
3) Individual Private Placement Variable Life insurance policies issued only to ''accredited investors'' as defined in Rule 501(a) of Regulation D of the Securities Act of 1933 (17 CFR 230.501(a)), or to ''qualified purchasers'' as defined in section 2(a)(51) of the Investment Company Act of 1940 (15 U.S.C.A. § 80a-2(a)(51)). All riders, amendments, endorsements and applications used exclusively with such policies.
4) Individual Corporate Owned or Bank Owned Universal or Variable Life insurance policies, where the corporation or bank pays the entire premium and is the beneficiary of the insurance. All riders, amendments, endorsements and applications used exclusively with such policies.
5) Group Corporate Owned, Bank Owned or Trust Owned Universal or Variable Life insurance policies, where the corporation, bank or trust pays the entire premium and the beneficiary of the insurance is an employee health, welfare or retirement benefit plan trust. All certificates, riders, amendments, endorsements and application used exclusively with the policies. Note: Under sections 532.1(1) and 532.2, pertaining to group life insurance (40 P. S. §§ 532.1(1) and 532.2), an employer may not be the beneficiary of group life insurance.
6) Group Accidental Death and Group Accidental Death and Dismemberment Riders.
M. DIANE KOKEN,
1 Limited life insurance policies are defined at 31 Pa. Code § 87.12.
2 Modified premium life insurance policies are defined at 31 Pa. Code § 87.13.
[Pa.B. Doc. No. 01-1190. Filed for public inspection June 29, 2001, 9:00 a.m.]
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