[Rev. 11/21/2013 1:11:41
PM--2013]
CHAPTER 688A - LIFE INSURANCE AND ANNUITY
CONTRACTS
GENERAL PROVISIONS
NRS 688A.010 Scope.
NRS 688A.020 “Annuity”
defined.
NRS 688A.030 “Industrial
life insurance” defined.
NRS 688A.040 Standard
provisions required.
NRS 688A.050 Payment
of premiums.
NRS 688A.060 Grace
period.
NRS 688A.070 Entire
contract.
NRS 688A.080 Incontestability.
NRS 688A.090 Misstatement
of age.
NRS 688A.100 Dividends.
NRS 688A.110 Loan
secured by policy.
NRS 688A.120 Table
of installments.
NRS 688A.130 Reinstatement.
NRS 688A.140 Payment
of claims.
NRS 688A.150 Beneficiary:
Industrial policies.
NRS 688A.160 Title.
NRS 688A.165 Surrender
and request for cancellation of contract or policy.
NRS 688A.170 Excluded
or restricted coverage.
NRS 688A.180 Standard
provisions: Annuity and pure endowment contracts.
NRS 688A.190 Annuities:
Grace period.
NRS 688A.200 Annuities:
Incontestability.
NRS 688A.210 Annuities:
Entire contract.
NRS 688A.220 Annuities:
Misstatement of age or sex.
NRS 688A.230 Annuities:
Dividends.
NRS 688A.240 Annuities:
Reinstatement.
NRS 688A.250 Standard
provisions: Reversionary annuities.
NRS 688A.260 Provisions
limiting liability.
NRS 688A.270 Prohibited
provisions.
NRS 688A.280 Provisions
required by law of other jurisdiction.
NRS 688A.281 Qualified
charitable-gift annuity: Definitions.
NRS 688A.282 Qualified
charitable-gift annuity: Issuance does not constitute transacting insurance.
NRS 688A.283 Qualified
charitable-gift annuity: Contents and form of required disclosure.
NRS 688A.284 Qualified
charitable-gift annuity: Required notice to Commissioner; contents of notice;
further information.
NRS 688A.285 Qualified
charitable-gift annuity: Effect of noncompliance; penalties.
STANDARD NONFORFEITURE LAW: LIFE INSURANCE
NRS 688A.290 Short
title; applicability; required provisions.
NRS 688A.300 Cash
surrender value: Basic calculations.
NRS 688A.305 Cash
surrender value: Limitations on policies issued on or after January 1, 1987.
NRS 688A.310 Paid-up
nonforfeiture benefit.
NRS 688A.315 Review
of benefits and premiums for life insurance with future premium determination.
NRS 688A.320 Calculation
of adjusted premiums for policies issued before operative date of NRS 688A.325.
NRS 688A.325 Calculation
of adjusted premiums; operative date of section.
NRS 688A.330 Basis
for calculating adjusted premiums on industrial insurance; applicability of
section.
NRS 688A.340 Basis
for calculating adjusted premiums and present values on ordinary policies
issued after operative date of this section; election to come under this
section; operative date of this section as to insurer failing to make election.
NRS 688A.350 Calculation
of cash surrender value and paid-up nonforfeiture benefit.
NRS 688A.360 Insurance
to which NRS 688A.290 to 688A.360,
inclusive, not applicable.
NONFORFEITURE LAW: DEFERRED ANNUITIES
NRS 688A.361 Nonforfeiture
provisions required in annuity contracts.
NRS 688A.363 Minimum
nonforfeiture amounts.
NRS 688A.3631 Value
of paid-up annuity benefits when benefit payments to commence.
NRS 688A.3633 Value
of cash surrender and death benefits before maturity.
NRS 688A.3635 Value
of paid-up annuity benefits before maturity for contracts not providing cash
surrender or death benefits.
NRS 688A.3637 Maturity
date.
NRS 688A.364 Statement
that policy does not provide cash surrender benefits or death benefits equal to
nonforfeiture amount.
NRS 688A.366 Calculation
of benefits available at time other than contract anniversary.
NRS 688A.367 Minimum
nonforfeiture benefits for contracts providing both annuity and life insurance
benefits.
NRS 688A.369 Insurance
to which NRS 688A.361 to 688A.369,
inclusive, not applicable.
MISCELLANEOUS PROVISIONS
NRS 688A.370 Reinstatement;
benefits for disability or accidental death.
NRS 688A.380 Participating
and nonparticipating policies: Accounting; allocations; dividends.
NRS 688A.390 Separate
accounts.
NRS 688A.400 Prohibited
policy plans.
NRS 688A.410 Payment
of life insurance proceeds; interest.
NRS 688A.430 Delivery
of group annuity to group formed to purchase annuity prohibited.
NRS 688A.440 Incorporation
of long-term care insurance into annuity or policy of life insurance.
_________
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GENERAL PROVISIONS
NRS 688A.010 Scope. This
chapter, with the exception of NRS 688A.390,
applies only to contracts of life insurance, endowment and annuities, other
than reinsurance, group life insurance and group annuities.
(Added to NRS by 1971, 1726)
NRS 688A.020 “Annuity” defined.
1. For the purposes of this Code, an
“annuity” is a contract under which obligations are assumed to make periodic
payments for a specific term or terms or where the making or continuance of all
or some such payments, or the amount of any such payment, is dependent upon
continuance of human life, except payments made pursuant to optional modes of
settlement under the authority of NRS
681A.040.
2. The term includes an annuity contract
which incorporates long-term care insurance if the annuity contract may
incorporate the long-term care insurance pursuant to NRS
688A.440.
(Added to NRS by 1971, 1726; A 2011, 3373)
NRS 688A.030 “Industrial life insurance” defined. For
the purposes of this Code, “industrial life insurance” is that form of life
insurance written under policies of a face amount of $2,500 or less bearing the
words “industrial policy” or “weekly premium policy” or words of similar import
imprinted on the face thereof as part of the descriptive matter, and under
which premiums are payable monthly or more often.
(Added to NRS by 1971, 1727)
NRS 688A.040 Standard provisions required.
1. No policy of life insurance other than
pure endowments, with or without return of premiums or of premiums and
interest, shall be delivered or issued for delivery in this state unless it
contains in substance all of the applicable provisions required by NRS 688A.050 to 688A.160,
inclusive. This section does not apply to annuity contracts or to any provision
of a life insurance policy, or contract supplemental thereto, relating to
disability benefits or to additional benefits in the event of death by accident
or accidental means.
2. Any of such provisions or portions
thereof not applicable to single premium or nonparticipating or term policies
or insurance granted in exchange for lapsed or surrendered policies shall to
that extent not be incorporated therein.
(Added to NRS by 1971, 1727)
NRS 688A.050 Payment of premiums. There
shall be a provision relating to the time and place of payment of premiums.
(Added to NRS by 1971, 1727)
NRS 688A.060 Grace period. There
shall be a provision that a grace period of 30 days or, at the option of the
insurer, of 1 month of not less than 30 days or of 4 weeks in the case of
industrial life insurance policies the premiums for which are payable more
frequently than monthly shall be allowed within which the payment of any
premium after the first may be made, during which period of grace the policy
shall continue in full force. The insurer may impose an interest charge not in
excess of 6 percent per annum for the number of days of grace elapsing before
the payment of the premium, and, whether or not such interest charge is
imposed, if a claim arises under the policy during such period of grace the
amount of any premium due or overdue, together with interest and any deferred
installment of the annual premium, may be deducted from the policy proceeds.
Grace shall date from the premium due date specified in the policy.
(Added to NRS by 1971, 1727)
NRS 688A.070 Entire contract. There
shall be a provision that except as otherwise expressly provided by law, the
policy and the application therefor, if a copy of such application is endorsed
upon or attached to the policy when issued, shall constitute the entire
contract between the parties, and that all statements contained in the
application shall, in the absence of fraud, be deemed representations and not
warranties.
(Added to NRS by 1971, 1727)
NRS 688A.080 Incontestability. There
shall be a provision that the policy shall be incontestable after it has been
in force during the lifetime of the insured for a period of not more than 2
years after its date of issue, except for nonpayment of premiums, and, at the
insurer’s option, provisions relating to benefits in the event of total and
permanent disability and provisions granting additional benefits specifically
against death by accident or accidental means.
(Added to NRS by 1971, 1728)
NRS 688A.090 Misstatement of age. There
shall be a provision that if the age of the insured or of any other person
whose age is considered in determining the premium or benefit has been
misstated, any amount payable or benefit accruing under the policy shall be
such as the premium would have purchased at the correct age or ages.
(Added to NRS by 1971, 1728)
NRS 688A.100 Dividends.
1. There shall be a provision in
participating policies that, beginning not later than the end of the third
policy year, the insurer shall annually ascertain and apportion the divisible
surplus, if any, that will accrue on the policy anniversary or other dividend
date specified in the policy, provided the policy is in force and all premiums
to that date are paid. Except as hereinafter provided, any dividend becoming
payable shall at the option of the party entitled to elect such option be
either:
(a) Payable in cash; or
(b) Applied to any one of such other dividend
options as may be provided by the policy. If any such other dividend options
are provided, the policy shall further state which option shall be
automatically effective if such party has not elected some other option. If the
policy specifies a period within which such other dividend option may be
elected, such period shall be not less than 30 days following the date on which
such dividend is due and payable. The annually apportioned dividend shall be
deemed to be payable in cash within the meaning of paragraph (a), even though
the policy provides that payment of such dividend is to be deferred for a
specified period, provided such period does not exceed 6 years from the date of
apportionment and that interest will be added to such dividend at a specified
rate.
2. Renewable term policies of 10 years or
less may provide that the surplus accrued to such policies shall be determined
and apportioned each year after the second policy year, and accumulated during
each renewal period, and that at the end of the renewal period, on renewal of
the policy by the insured, the insurer shall apply the accumulated surplus as
an annuity for the next succeeding renewal term in the reduction of premiums.
3. In participating industrial life
insurance policies, in lieu of the provision required in subsection 1, there
shall be a provision that, beginning not later than the end of the fifth policy
year, the policy shall participate annually in the divisible surplus, if any,
in the manner set forth in the policy.
4. This section does not apply to
insurance issued under nonforfeiture provisions of lapsed or surrendered
policies.
(Added to NRS by 1971, 1728)
NRS 688A.110 Loan secured by policy.
1. There shall be a provision that after 3
full years’ premiums have been paid and after the policy has a cash surrender
value and while no premium is in default beyond the grace period for payment,
the insurer will advance, on proper assignment or pledge of the policy and on
the sole security thereof, at a fixed or variable rate of interest as may be
approved by the Commissioner, an amount equal to or, at the option of the party
entitled thereto, less than the loan value of the policy. The loan value of the
policy shall be at least equal to the cash surrender value at the end of the
then current policy year, and the insurer may deduct, either from such loan
value or from the proceeds of the loan, any existing indebtedness not already
deducted in determining such cash surrender value, including any interest then
accrued but not due, any unpaid balance of the premium for the current policy
year, and interest on the loan to the end of the current policy year. The
policy may also provide that if interest on any indebtedness is not paid when
due it shall then be added to the existing indebtedness and shall bear interest
at the same rate, and that if and when the total indebtedness on the policy,
including interest due or accrued, equals or exceeds the amount of the loan
value thereof, then the policy shall terminate and become void, but not until
at least 30 days’ notice has been mailed by the insurer to the last address of
record with the insurer, of the insured or other policy owner and of any
assignee of record at the insurer’s home office. The policy shall reserve to
the insurer the right to defer the granting of a loan, other than for the
payment of any premium to the insurer, for 6 months after application therefor.
Such provision shall also contain a table showing in figures the loan values
each year during the first 20 years of the policy, or during the term of the
policy, whichever is shorter. The policy, at the insurer’s option, may provide
for an automatic premium loan.
2. This section does not apply to term
policies, or to term insurance benefits provided by rider or supplemental
policy provisions or to industrial life insurance policies.
(Added to NRS by 1971, 1729; A 1971, 1950)
NRS 688A.120 Table of installments. In
case the policy provides that the proceeds may be payable in installments which
are determinable at issue of the policy, there shall be a table showing the
amounts of the guaranteed installments.
(Added to NRS by 1971, 1729)
NRS 688A.130 Reinstatement. There
must be a provision that unless:
1. The policy has been surrendered for its
cash surrender value;
2. Its cash surrender value has been
exhausted; or
3. The paid-up term insurance, if any, has
expired,
Ê the policy
will be reinstated at any time within 3 years after the date of premium default
upon written application therefor, the production of evidence of insurability
satisfactory to the insurer, the payment of all premiums in arrears and any
interest due thereon and the payment or reinstatement of any other indebtedness
to the insurer upon the policy including any interest due thereon.
(Added to NRS by 1971, 1730; A 1985, 1049)
NRS 688A.140 Payment of claims. There
shall be a provision that when the benefits under the policy become payable by
reason of the death of the insured, settlement shall be made upon receipt of
due proof of death and, at the insurer’s option, surrender of the policy and
proof of the interest of the claimant or surrender of proof. If an insurer
specifies a particular period prior to the expiration of which settlement shall
be made, such period shall not exceed 2 months from the receipt of such proofs.
(Added to NRS by 1971, 1730)
NRS 688A.150 Beneficiary: Industrial policies.
1. An industrial life insurance policy
shall have the name of the beneficiary designated thereon or in the application
or other form if attached to the policy, with a reservation of the right to
designate or change the beneficiary after the issuance of the policy, unless
such beneficiary is irrevocably designated.
2. The policy may also provide that:
(a) No designation or change of beneficiary shall
be binding on the insurer until endorsed on the policy by the insurer, and that
the insurer may refuse to endorse the name of any proposed beneficiary who does
not appear to the insurer to have an insurable interest in the life of the
insured.
(b) If the beneficiary designated in the policy
does not make a claim under the policy or does not surrender the policy with
due proof of death within the period stated in the policy, which shall not be
less than 30 days after the death of the insured, or if the beneficiary is the
estate of the insured, or is a minor, or dies before the insured, or is not
legally competent to give a valid release, then the insurer may make any
payment thereunder to the executor or administrator of the insured, or to any
relative of the insured by blood or legal adoption or connection by marriage,
or to any person appearing to the insurer to be equitably entitled thereto by
reason of having been named beneficiary, or by reason of having incurred
expense for the maintenance, medical attention or burial of the insured.
3. The policy may also include a similar
provision applicable to any other payment due under the policy.
(Added to NRS by 1971, 1730)
NRS 688A.160 Title. There shall
be a title on the policy, briefly describing the same.
(Added to NRS by 1971, 1731)
NRS 688A.165 Surrender and request for cancellation of contract or policy.
1. No annuity contract, pure endowment
contract or policy of life insurance, other than a replacement contract or
policy, may be delivered or issued for delivery in this state unless it
contains a provision, or a notice attached to the contract or policy, which, in
substance, states that during a period of 10 days from the date the contract or
policy is delivered to the contract or policy owner, it may be surrendered to
the insurer together with a written request for cancellation of the contract or
policy and in such event, the insurer will refund any premium paid therefor,
including any contract or policy fees or other charges.
2. No annuity contract, pure endowment
contract or policy of life insurance that is a replacement contract or policy
may be delivered or issued for delivery in this State unless it contains a
provision, or a notice attached to the contract or policy, which, in substance,
states that during a period of 30 days after the date on which the contract or
policy is delivered to the contract or policy owner, it may be surrendered to
the insurer together with a written request for cancellation of the contract or
policy and in such event, the insurer will refund any premium paid therefor,
including any contract or policy fees or other charges.
3. This section does not apply to
industrial life insurance policies.
(Added to NRS by 1977, 455; A 2011, 3373)
NRS 688A.170 Excluded or restricted coverage. A
clause in any policy of life insurance providing that such policy shall be
incontestable after a specified period shall preclude only a contest of the
validity of the policy, and shall not preclude the assertion at any time of
defenses based upon provisions in the policy which exclude or restrict
coverage, whether or not such restrictions or exclusions are excepted in such
clause.
(Added to NRS by 1971, 1731)
NRS 688A.180 Standard provisions: Annuity and pure endowment contracts.
1. No annuity or pure endowment contract,
other than reversionary annuities (also called survivorship annuities) or group
annuities and except as stated in this section, shall be delivered or issued
for delivery in this state unless it contains in substance each of the
provisions specified in NRS 688A.165 and 688A.190 to 688A.240,
inclusive. Any of such provisions not applicable to single-premium annuities or
single-premium pure endowment contracts shall not, to that extent, be
incorporated therein.
2. This section does not apply to
contracts for deferred annuities included in, or upon the lives of
beneficiaries under, life insurance policies.
(Added to NRS by 1971, 1731; A 2011, 3373)
NRS 688A.190 Annuities: Grace period. In
an annuity or pure endowment contract, other than a reversionary, survivorship
or group annuity, there shall be a provision that there shall be a period of
grace of 1 month, but not less than 30 days, within which any stipulated
payment to the insurer falling due after the first may be made, subject at the
option of the insurer to an interest charge thereon at a rate to be specified
in the contract but not exceeding 6 percent per annum for the number of days of
grace elapsing before such payment, during which period of grace the contract
shall continue in full force; but in case a claim arises under the contract on
account of death prior to expiration of the period of grace before the overdue
payment to the insurer or the deferred payments of the current contract year,
if any, are made, the amount of such payments, with interest on any overdue
payments, may be deducted from any amount payable under the contract in
settlement.
(Added to NRS by 1971, 1731)
NRS 688A.200 Annuities: Incontestability. If
any statements, other than those relating to age, sex and identity are required
as a condition to issuing an annuity or pure endowment contract, other than a
reversionary, survivorship or group annuity, and subject to NRS 688A.220, there shall be a provision that the
contract shall be incontestable after it has been in force during the lifetime
of the person or of each of the persons as to whom such statements are
required, for a period of 2 years from its date of issue, except for nonpayment
of stipulated payments to the insurer; and at the option of the insurer such
contract may also except any provisions relative to benefits in the event of disability
and any provisions which grant insurance specifically against death by accident
or accidental means.
(Added to NRS by 1971, 1731)
NRS 688A.210 Annuities: Entire contract. In
an annuity or pure endowment contract, other than a reversionary, survivorship
or group annuity, there shall be a provision that the contract shall constitute
the entire contract between the parties or, if a copy of the application is
endorsed upon or attached to the contract when issued, a provision that the
contract and the application therefor shall constitute the entire contract
between the parties.
(Added to NRS by 1971, 1732)
NRS 688A.220 Annuities: Misstatement of age or sex. In
an annuity or pure endowment contract, other than a reversionary, survivorship
or group annuity, there shall be a provision that if the age or sex of the
person or persons upon whose life or lives the contract is made, or of any of
them, has been misstated, the amount payable or benefits accruing under the
contract shall be such as the stipulated payment or payments to the insurer
would have purchased according to the correct age or sex and that if the insurer
makes or has made any overpayment or overpayments on account of any such
misstatement, the amount thereof, with interest at the rate to be specified in
the contract but not exceeding 6 percent per annum, may be charged against the
current or next succeeding payment or payments to be made by the insurer under
the contract.
(Added to NRS by 1971, 1732)
NRS 688A.230 Annuities: Dividends. If
an annuity or pure endowment contract, other than a reversionary, survivorship
or group annuity, is participating, there shall be a provision that the insurer
shall annually ascertain and apportion any divisible surplus accruing on the
contract.
(Added to NRS by 1971, 1732)
NRS 688A.240 Annuities: Reinstatement. In
an annuity or pure endowment contract, other than a reversionary or group
annuity, there shall be a provision that the contract may be reinstated at any
time within 1 year from the default in making stipulated payments to the
insurer, unless the cash surrender value has been paid, but all overdue stipulated
payments and any indebtedness to the insurer on the contract shall be paid or
reinstated with interest thereon at a rate to be specified in the contract but
not exceeding 6 percent per annum payable annually, and in cases where
applicable the insurer may also include a requirement of evidence of
insurability satisfactory to the insurer.
(Added to NRS by 1971, 1732)
NRS 688A.250 Standard provisions: Reversionary annuities.
1. Except as stated in this section, no
contract for a reversionary annuity shall be delivered or issued for delivery
in this state unless it contains in substance each of the following provisions:
(a) Any such reversionary annuity contract shall
contain the provisions specified in NRS 688A.190
to 688A.230, inclusive, except that under NRS 688A.190 the insurer may at its option provide
for an equitable reduction of the amount of the annuity payments in settlement
of an overdue payment in lieu of providing for deduction of such payments from
an amount payable upon settlement under the contract.
(b) In such reversionary annuity contracts there
shall be a provision that the contract may be reinstated at any time within 3
years from the date of default in making stipulated payments to the insurer,
upon production of evidence of insurability satisfactory to the insurer, and
upon condition that all overdue payments and any indebtedness to the insurer on
account of the contract are paid, or, within the limits permitted by the then
cash values of the contract, reinstated, with interest as to both payments and
indebtedness at a rate to be specified in the contract but not exceeding 6
percent per annum compounded annually.
2. This section does not apply to group
annuities or to annuities included in life insurance policies, and any of such
provisions not applicable to single premium annuities shall not to that extent
be incorporated therein.
(Added to NRS by 1971, 1733)
NRS 688A.260 Provisions limiting liability.
1. No policy of life insurance shall be
delivered or issued for delivery in this state if it contains any of the
following provisions:
(a) A provision limiting the time within which an
action at law or in equity may be commenced on such a policy to less than 3
years after the cause of action has accrued.
(b) A provision which excludes or restricts
liability for death caused in a certain specified manner or occurring while the
insured has a specified status, except that a policy may contain provisions
excluding or restricting coverage as specified therein in the event of death
under any one or more of the following circumstances:
(1) Death as a result, directly or
indirectly, of war, declared or undeclared, or of action by military forces, or
of any act or hazard of such war or action, or of service in the military,
naval or air forces or in civilian forces auxiliary thereto, or from any cause
while a member of such military, naval or air forces of any country at war,
declared or undeclared, or of any country engaged in such military action;
(2) Death as a result of aviation or any
air travel or flight;
(3) Death as a result of a specified
hazardous occupation or occupations or avocation;
(4) Death while the insured is a resident
outside the continental United States of America and Canada; or
(5) Death within 2 years from the date of
issue of the policy as a result of suicide, while sane or insane.
2. A policy which contains any exclusion
or restriction pursuant to paragraph (b) shall also provide that in the event
of death under the circumstances to which any such exclusion or restriction is
applicable, the insurer will pay an amount not less than a reserve determined
according to the Commissioners Reserve Valuation Method upon the basis of the
mortality table and interest rate specified in the policy for the calculation
of nonforfeiture benefits (or if the policy provides for no such benefits,
computed according to a mortality table and interest rate determined by the
insurer and specified in the policy) with adjustment for indebtedness or
dividend credit.
3. This section does not apply to group
life insurance, health insurance, reinsurance or annuities, or to any provision
in a life insurance policy or contract supplemental thereto relating to
disability benefits or to additional benefits in the event of death by accident
or accidental means.
4. Nothing contained in this section
prohibits any provision which in the opinion of the Commissioner is more
favorable to the policyholder than a provision permitted by this section.
(Added to NRS by 1971, 1733)
NRS 688A.270 Prohibited provisions.
1. No life insurance policy, other than
industrial life insurance, shall be delivered or issued for delivery in this
state, if it contains any of the following provisions:
(a) A provision by which the policy purports to
be issued or to take effect more than 1 year before the original application
for the insurance was made.
(b) A provision for any mode of settlement at
maturity of the policy of less value than the amount insured under the policy,
plus dividend additions, if any, less any indebtedness to the insurer on or
secured by the policy and less any premium that may by the terms of the policy
be deducted.
(c) A provision to the effect that the agent
soliciting the insurance is the agent of the person insured under the policy,
or making the acts or representations of such agent binding upon the person so
insured under the policy.
2. No policy of industrial life insurance
shall contain any of the following provisions:
(a) A provision by which the insurer may deny
liability under the policy for the reason that the insured has previously
obtained other insurance from the same insurer.
(b) A provision giving the insurer the right to
declare the policy void because the insured has had any disease or ailment,
whether specified or not, or because the insured has received institutional,
hospital, medical or surgical treatment or attention, except a provision which
gives the insurer the right to declare the policy void if the insured has,
within 2 years prior to the issuance of the policy, received institutional,
hospital, medical or surgical treatment or attention and if the insured or
claimant under the policy fails to show that the condition occasioning such
treatment or attention was not of a serious nature or was not material to the
risk.
(c) A provision giving the insurer the right to
declare the policy void because the insured has been rejected for insurance,
unless such right is conditioned upon a showing by the insurer that knowledge
of such rejection would have led to a refusal by the insurer to make such
contract.
(Added to NRS by 1971, 1734)
NRS 688A.280 Provisions required by law of other jurisdiction. The policies of a foreign life insurer when
issued in this state may contain any provision which the law of the state,
territory, district or country under which the insurer is organized prescribes
shall be in such policies, and the policies of a domestic life insurer may,
when issued or delivered in any other state, territory, district or country,
contain any provisions required by the law thereof, anything in this chapter to
the contrary notwithstanding.
(Added to NRS by 1971, 1735)
NRS 688A.281 Qualified charitable-gift annuity: Definitions. As used in NRS
688A.281 to 688A.285, inclusive, unless the context
otherwise requires:
1. “Charitable-gift annuity” means an
annuity payable over one or two lives issued by a charitable organization in
return for a transfer of money or property by the donor, if the actuarial value
of the annuity is less than the value of the money or property transferred and
a deduction as a charitable contribution is allowable for purposes of federal
taxes.
2. “Charitable organization” means an
artificial person described as such in section 501(c)(3) of the Internal
Revenue Code of 1986, 26 U.S.C. § 501(c)(3), or section 170(c) of the Internal
Revenue Code of 1986, 26 U.S.C. § 170(c).
3. “Qualified charitable-gift annuity”
means a charitable-gift annuity described in section 501(m)(5) of the Internal
Revenue Code of 1986, 26 U.S.C. § 501(m)(5), and section 514(c)(5) of the
Internal Revenue Code of 1986, 26 U.S.C. § 514(c)(5), which is issued by a
charitable organization that on the date of issuance:
(a) Owns at least $300,000 worth of money, cash
equivalents or publicly traded securities, exclusive of the amount transferred
to it in return for the annuity; and
(b) Has operated continuously for at least 3
years or is a successor or affiliate of a charitable organization that has
operated continuously for at least 3 years.
Ê The term
does not include an annuity for which any person is paid compensation that is
contingent upon the issuance of the annuity or based upon the value of the
annuity other than a payment for reinsurance to an insurer licensed to issue
insurance in this state.
(Added to NRS by 1999, 1950)
NRS 688A.282 Qualified charitable-gift annuity: Issuance does not constitute
transacting insurance. The
issuance of a qualified charitable-gift annuity does not constitute transacting
insurance in this state. A charitable-gift annuity issued before October 1,
1999, is a qualified charitable-gift annuity for the purposes of NRS 688A.281 to 688A.285,
inclusive.
(Added to NRS by 1999, 1951)
NRS 688A.283 Qualified charitable-gift annuity: Contents and form of required
disclosure. In an agreement to
issue a qualified charitable-gift annuity, the charitable organization shall
disclose in writing to the donor that the annuity is not insurance under the
laws of this state, is not subject to regulation by the Commissioner and is not
protected by an insurance guaranty association. The disclosure must be made in
a separate paragraph and may not be in a size of type smaller than used
generally in the agreement.
(Added to NRS by 1999, 1951)
NRS 688A.284 Qualified charitable-gift annuity: Required notice to
Commissioner; contents of notice; further information.
1. A charitable organization that issues
qualified charitable-gift annuities shall notify the Commissioner in writing on
or before December 30, 1999, or the expiration of 90 days after it first enters
into an agreement to issue a qualified charitable-gift annuity, whichever is
later. The notice must:
(a) Be signed by an officer or director of the
organization;
(b) Identify the organization; and
(c) Certify that the organization is a charitable
organization and that the annuities are qualified charitable-gift annuities.
2. Unless the Commissioner demands
information to determine the amount of a penalty pursuant to NRS 688A.285, the organization need submit no other
information.
(Added to NRS by 1999, 1951)
NRS 688A.285 Qualified charitable-gift annuity: Effect of noncompliance;
penalties.
1. Failure of a charitable organization to
comply with the requirements of NRS 688A.283 or 688A.284 for disclosure or notice, or both, does not
disqualify an annuity that otherwise constitutes a qualified charitable-gift
annuity.
2. The Commissioner may demand, by
certified mail with return receipt requested, that the organization comply with
those requirements, and may impose a fine of not more than $1,000 for each
charitable-gift annuity issued before compliance is complete.
(Added to NRS by 1999, 1951)
STANDARD NONFORFEITURE LAW: LIFE INSURANCE
NRS 688A.290 Short title; applicability; required provisions.
1. NRS 688A.290
to 688A.360, inclusive, shall be known as the
Standard Nonforfeiture Law. Except as provided in NRS
688A.330 and 688A.340, NRS
688A.290 to 688A.360, inclusive, apply to
policies of life insurance issued on and after January 1, 1962, unless the
Commissioner deferred such application to a date not later than January 1,
1964, with respect to an insurer for good cause shown.
2. In the case of policies issued on or
after the date NRS 688A.290 to 688A.360, inclusive, became applicable as defined in
subsection 1, no policy of life insurance, except as stated in NRS 688A.360, may be issued for delivery or delivered
in this state unless it contains in substance the following provisions, or
corresponding provisions which in the opinion of the Commissioner are at least
as favorable to the defaulting or surrendering policyholder as those required
by this section and NRS 688A.305:
(a) In the event of default in any premium
payment, the insurer will grant, upon proper request made not later than 60
days after the due date of the premium in default, a paid-up nonforfeiture
benefit on a plan stipulated in the policy, effective as of such due date, of
the amount specified in NRS 688A.290 to 688A.360, inclusive. In lieu of the stipulated
paid-up nonforfeiture benefit, the insurer may substitute, upon proper request
not later than 60 days after the due date of the premium in default, an
actuarially equivalent alternative paid-up nonforfeiture benefit which provides
a greater amount or longer period of death benefits or, if applicable, a
greater amount or earlier payment of endowment benefits.
(b) Upon surrender of the policy within 60 days
after the due date of any premium payment in default after premiums have been
paid for at least 3 full years in the case of ordinary insurance or 5 full
years in the case of industrial insurance, the insurer will pay, in lieu of any
paid-up nonforfeiture benefit, a cash surrender value of the amount specified
in NRS 688A.290 to 688A.360,
inclusive.
(c) A specified paid-up nonforfeiture benefit
must become effective as specified in the policy unless the person entitled to
make an election elects another available option not later than 60 days after
the due date of the premium in default.
(d) If the policy has become paid up by
completion of all premium payments or if it is continued under any paid-up
nonforfeiture benefit which became effective on or after the third policy
anniversary in the case of ordinary insurance or the fifth policy anniversary
in the case of industrial insurance, the insurer will pay, upon surrender of
the policy within 30 days after any policy anniversary, a cash surrender value
of the amount specified in NRS 688A.290 to 688A.360, inclusive.
(e) In the case of policies which cause, on a
basis guaranteed in the policy, unscheduled changes in benefits or premiums, or
which provide an option for changes in benefits or premiums other than a change
to a new policy, a statement of the mortality table, interest rate, and method
used in calculating cash surrender values and the paid-up nonforfeiture
benefits available under the policy. In the case of all other policies, a
statement of the mortality table and interest rate used in calculating the cash
surrender values and the paid-up nonforfeiture benefits available under the
policy, together with a table showing the cash surrender value, if any, and
paid-up nonforfeiture benefit, if any, available under the policy on each
policy anniversary either during the first 20 policy years or during the term
of the policy, whichever is shorter. Such values and benefits must be
calculated upon the assumption that there are no dividends or paid-up additions
credited to the policy and that there is no indebtedness to the insurer on the
policy.
(f) A statement that the cash surrender values
and the paid-up nonforfeiture benefits available under the policy are not less
than the minimum values and benefits required by or pursuant to the insurance
law of the state in which the policy is delivered, and an explanation of the
manner in which the cash surrender values and the paid-up nonforfeiture
benefits are altered by the existence of any paid-up additions credited to the
policy or any indebtedness to the insurer on the policy.
(g) If a detailed statement of the method of
computation of the values and benefits shown in the policy is not stated
therein, a statement that the method of computation has been filed with the
insurance supervisory officer of the state in which the policy is delivered.
(h) A statement of the method to be used in
calculating the cash surrender value and paid-up nonforfeiture benefit
available under the policy on any policy anniversary beyond the last
anniversary for which such values and benefits are consecutively shown in the policy.
3. Any of the provisions required by
subsection 2 which are not applicable by reason of the plan of insurance may,
to the extent inapplicable, be omitted from the policy.
4. Each insurer shall reserve the right to
defer the payment of any cash surrender value for a period of 6 months after
demand therefor with surrender of the policy.
(Added to NRS by 1971, 1735; A 1983, 950)
NRS 688A.300 Cash surrender value: Basic calculations.
1. Any cash surrender value available
under the policy in the event of default in a premium payment due on any policy
anniversary, whether or not required by NRS 688A.290,
must be an amount not less than the excess, if any, of the present value, on
that anniversary, of the future guaranteed benefits which would have been
provided for by the policy, including any existing paid-up additions, if there
had been no default, over the sum of:
(a) The then present value of the adjusted
premiums, as defined in NRS 688A.320 to 688A.340, inclusive, corresponding to premiums which
would have fallen due on and after such anniversary; and
(b) The amount of any indebtedness to the insurer
on the policy.
2. For any policy issued on or after the
operative date of NRS 688A.325 which provides
supplemental life insurance or annuity benefits at the option of the insured
and for an identifiable additional premium by rider or supplemental policy
provision, the cash surrender value referred to in subsection 1 of this section
must be an amount not less than the sum of the cash surrender value for an
otherwise similar policy issued at the same age without a rider or supplemental
policy provision and the cash surrender value for a policy which provides only
the benefits otherwise provided by a rider or supplemental policy provision.
3. For any family policy issued on or
after the operative date of NRS 688A.325 which
defines a primary insured and provides term insurance on the life of the spouse
of the primary insured expiring before the spouse reaches age 71, the cash
surrender value referred to in subsection 1 must be an amount not less than the
sum of the cash surrender value for an otherwise similar policy issued at the
same age without term insurance on the life of the spouse and the cash
surrender value for a policy which provides only the benefits otherwise
provided by term insurance on the life of the spouse.
4. Any cash surrender value available
within 30 days after any policy anniversary under any policy paid up by
completion of all premium payments or any policy continued under any paid-up
nonforfeiture benefit, whether or not required by NRS
688A.290, must be an amount not less than the present value, on that
anniversary, of the future guaranteed benefits provided for by the policy,
including any existing paid-up additions, decreased by any indebtedness to the
insurer on the policy.
(Added to NRS by 1971, 1736; A 1983, 952)
NRS 688A.305 Cash surrender value: Limitations on policies issued on or after
January 1, 1987.
1. This section applies to all policies
issued on or after January 1, 1987. Any cash surrender value available under
the policy in the event of default in a premium payment due on any policy
anniversary must be in an amount which does not differ by more than two-tenths
of 1 percent of the amount of insurance, if the insurance is uniform in amount,
or the average amount of insurance at the beginning of each of the first 10
policy years, from the sum of:
(a) The greater of zero and the basic cash value
specified in this section; and
(b) The present value of any existing paid-up
additions less the amount of any indebtedness to the insurer under the policy.
2. The basic cash value must be equal to
the present value, on the anniversary, of the future guaranteed benefits which
would have been provided by the policy, excluding any existing paid-up
additions and before deduction of any indebtedness to the insurer, if there had
been no default, less the present value of the nonforfeiture factors,
corresponding to premiums which would have fallen due on and after the
anniversary. The effects on the basic cash value of supplemental life insurance
or annuity benefits or of family coverage, as described in NRS 688A.300 or 688A.320,
whichever is applicable, must be the same as the effects specified in NRS 688A.300 or 688A.320,
on the cash surrender values defined in that section.
3. The nonforfeiture factor for each
policy year must be an amount equal to a percentage of the adjusted premium for
the policy year, as defined in NRS 688A.320 or 688A.325, whichever is applicable. Except as is
required in this subsection, the percentage must be:
(a) The same for each policy year between the
second policy anniversary and the later of:
(1) The fifth policy anniversary; and
(2) The first policy anniversary at which
there is available under the policy a cash surrender value in an amount, before
including any paid-up additions and before deducting any indebtedness, of at
least two-tenths of 1 percent of the amount of insurance, if the insurance is
uniform in amount, or the average amount of insurance at the beginning of each
of the first 10 policy years; and
(b) Such that no percentage after the later of
the two policy anniversaries specified in paragraph (a) may apply to fewer than
5 consecutive policy years.
Ê No basic
cash value may be less than the value which would be obtained if the adjusted
premiums for the policy, as defined in NRS 688A.320
or 688A.325, whichever is applicable, were
substituted for the nonforfeiture factors in the calculation of the basic cash
value.
4. All adjusted premiums and present
values referred to in this section for a particular policy must be calculated
on the same mortality and interest bases as are used in demonstrating the
policy’s compliance with NRS 688A.290 to 688A.360, inclusive. The cash surrender values
referred to in this section must include any endowment benefits provided for by
the policy.
5. Any cash surrender value available
other than in the event of default in a premium payment due on a policy
anniversary, and the amount of any paid-up nonforfeiture benefit available
under the policy in the event of default in a premium payment must be determined
by methods consistent with those specified for determining the analogous
minimum amounts in NRS 688A.290, 688A.300, 688A.325 and 688A.350. The amounts of any cash surrender values
and of any paid-up nonforfeiture benefits granted in connection with additional
benefits such as those listed in paragraphs (a) to (f), inclusive, of
subsection 4 of NRS 688A.350, must conform with
the principles of this section.
(Added to NRS by 1983, 949)
NRS 688A.310 Paid-up nonforfeiture benefit. Any
paid-up nonforfeiture benefit available under the policy in the event of
default in a premium payment due on any policy anniversary must be such that
its present value as of the anniversary is at least equal to the cash surrender
value then provided for by the policy or, if none is provided for, that cash
surrender value which would have been required by NRS
688A.290 to 688A.360, inclusive, in the
absence of the condition that premiums must have been paid for at least a
specified period.
(Added to NRS by 1971, 1737; A 1983, 953)
NRS 688A.315 Review of benefits and premiums for life insurance with future
premium determination. In the case
of any plan of life insurance which provides for future premium determination,
the amounts of which are to be determined by the insurer based on estimates of
future experience, or in the case of any plan of life insurance which is of
such a nature that minimum values cannot be determined by the methods described
in NRS 688A.290 to 688A.340,
inclusive:
1. The Commissioner must be satisfied that
the benefits provided under the plan are substantially as favorable to
policyholders and insureds as the minimum benefits otherwise required by NRS 688A.290 to 688A.340,
inclusive;
2. The Commissioner must be satisfied that
the benefits and the pattern of premiums of that plan are not such as to
mislead prospective policyholders or insureds; and
3. The cash surrender values and paid-up
nonforfeiture benefits provided by the plan must not be less than the minimum
values and benefits required for the plan computed by a method consistent with
the principles of the Standard Nonforfeiture Law for Life Insurance, as
determined by regulations adopted by the Commissioner.
(Added to NRS by 1983, 948)
NRS 688A.320 Calculation of adjusted premiums for policies issued before
operative date of NRS 688A.325.
1. Except as provided in subsections 4 and
6, the adjusted premiums for any policy must be calculated on an annual basis
and be such a uniform percentage of the respective premiums specified in the
policy for each policy year, excluding any extra premiums charged because of
impairments or special hazards, that the present value, at the date of issue of
the policy, of all such adjusted premiums is equal to the sum of:
(a) The then present value of the future
guaranteed benefits provided for by the policy;
(b) Two percent of the amount of insurance, if
the insurance is uniform in amount, or of the equivalent uniform amount, as
defined in this section, if the amount of insurance varies with duration of the
policy;
(c) Forty percent of the adjusted premium for the
first policy year; and
(d) Twenty-five percent of either the adjusted
premium for the first policy year or the adjusted premium for a whole life
policy of the same uniform or equivalent uniform amount with uniform premiums
for the whole of life issued at the same age for the same amount of insurance,
whichever is less.
2. In applying the percentages specified
in paragraphs (c) and (d) of subsection 1, no adjusted premium shall be deemed
to exceed 4 percent of the amount of insurance or uniform amount equivalent
thereto. The date of issue of a policy for the purpose of this section must be
the date as of which the rated age of the insured is determined.
3. In the case of a policy providing an
amount of insurance varying with duration of the policy, the equivalent uniform
amount thereof for the purpose of this section shall be deemed to be the
uniform amount of insurance provided by an otherwise similar policy, containing
the same endowment benefit or benefits, if any, issued at the same age and for
the same term, the amount of which does not vary with duration and the benefits
under which have the same present value at the date of issue as the benefits
under the policy, except that, in the case of a policy providing a varying
amount of insurance issued on the life of a child under 10 years of age, the
equivalent uniform amount may be computed as though the amount of insurance
provided by the policy before the attainment of age 10 were the amount provided
by the policy at age 10.
4. The adjusted premiums for any policy
providing term insurance benefits by rider or supplemental policy provision
must be equal to (A) the adjusted premiums for an otherwise similar policy
issued at the same age without term insurance benefits, increased, during the
period for which premiums for term insurance benefits are payable, by (B) the
adjusted premiums for such term insurance, the foregoing items (A) and (B)
being calculated separately and as specified in subsections 1 and 2, except
that, for the purposes of paragraphs (b), (c) and (d) of subsection 1, the
amount of insurance or equivalent uniform amount of insurance used in the
calculation of the adjusted premiums referred to in (B) must be equal to the
excess of the corresponding amount determined for the entire policy over the
amount used in the calculation of the adjusted premiums in (A).
5. Except as provided in NRS 688A.330 and 688A.340,
all adjusted premiums and present values referred to in NRS
688A.290 to 688A.360, inclusive, must for all
policies of ordinary insurance be calculated on the basis of the Commissioners
1941 Standard Ordinary Mortality Table, but for any category of ordinary
insurance on female risks, adjusted premiums and present values may be
calculated according to an age not more than 3 years younger than the actual
age of the insured, and such calculations for all policies of industrial
insurance must be made on the basis of the 1941 Standard Industrial Mortality
Table. All calculations must be made on the basis of the rate of interest, not
exceeding 3.5 percent per annum, specified in the policy for calculating cash
surrender values and paid-up nonforfeiture benefits, but in calculating the
present value of any paid-up term insurance with accompanying pure endowment,
if any, offered as a nonforfeiture benefit, the rates of mortality assumed may
be not more than 130 percent of the rates of mortality according to the
applicable table. The calculation of any adjusted premiums and present values
for insurance issued on a substandard basis may be based on such other table of
mortality as may be specified by the insurer and approved by the Commissioner.
6. This section does not apply to policies
issued on or after the operative date of NRS 688A.325.
(Added to NRS by 1971, 1737; A 1983, 953)
NRS 688A.325 Calculation of adjusted premiums; operative date of section.
1. This section applies to all policies
issued by an insurer on or after the operative date of this section as it
relates to that insurer. Except as otherwise provided in subsection 7, the
adjusted premiums for any policy must be calculated on an annual basis and be
the uniform percentage of the respective premium specified in the policy for
each policy year, excluding amounts payable as extra premiums to cover
impairments or special hazards and any uniform annual contract charge or policy
fee specified in the policy in a statement of the method to be used in
calculating the cash surrender values and paid-up nonforfeiture benefits. The
present value, at the date of issue of the policy, of all adjusted premiums
must be equal to the sum of:
(a) The value of the future guaranteed benefits
provided for by the policy;
(b) One percent of the amount of insurance, if
the insurance is uniform in amount, or the average amount of insurance at the
beginning of each of the first 10 policy years; and
(c) One hundred twenty-five percent of the
nonforfeiture net level premium. In applying the percentage specified in
paragraph (c), no nonforfeiture net level premium may be deemed to exceed 4
percent of the amount of insurance, if the insurance is uniform in amount, or
the average amount of insurance at the beginning of each of the first 10 policy
years. The date of issue of a policy for the purpose of this section must be
the date as of which the rated age of the insured is determined.
2. The nonforfeiture net level premium
must be equal to the present value, at the date of issue of the policy, of the
guaranteed benefits provided for by the policy divided by the present value, at
the date of issue of the policy, of an annuity of one per annum payable on the
date of issue of the policy and on each anniversary of the policy on which a
premium falls due.
3. In the case of policies which cause
unscheduled changes in benefits or premiums on a basis guaranteed in the
policy, or which provide an option for changes in benefits or premiums other
than a change to a new policy, the adjusted premiums and present values must
initially be calculated on the assumption that future benefits and premiums do
not change from those stipulated at the date of issue of the policy. At the
time of any change in the benefits or premiums, the future adjusted premiums,
nonforfeiture net level premiums and present values must be recalculated on the
assumption that future benefits and premiums do not change from those
stipulated by the policy immediately after the change.
4. Except as otherwise provided in
subsection 7, the recalculated future adjusted premiums for any such policy
must be a uniform percentage of the respective future premiums specified in the
policy for each policy year, excluding amounts payable as extra premiums to
cover impairments and special hazards and any uniform annual contract charge or
policy fee specified in the policy in a statement of the method to be used in
calculating the cash surrender values and paid-up nonforfeiture benefits, which
results in the present value, at the time of change to the newly defined
benefits or premiums, of all future adjusted premiums being equal to the excess
of the sum of the present value of the future guaranteed benefits provided for
by the policy and the additional expense allowance, if any, over the cash
surrender value, if any, or present value of any paid-up nonforfeiture benefit
under the policy.
5. The additional expense allowance, at
the time of the change to the newly defined benefits or premiums, must be the
sum of:
(a) One percent of the excess, if positive, of
the average amount of insurance at the beginning of each of the first 10 policy
years after the change, over the average amount of insurance before the change
at the beginning of each of the first 10 policy years after the most recent
previous change, or, if there has been no previous change, the date of issue of
the policy; and
(b) One hundred twenty-five percent of the
increase, if positive, in the nonforfeiture net level premium.
6. The recalculated nonforfeiture net
level premium must be equal to the result obtained by dividing amount “A” by
amount “B” where:
(a) “A” equals the sum of:
(1) The nonforfeiture net level premium
applicable before the change, multiplied by the present value of an annuity of
one per annum payable on each anniversary of the policy on or after the date of
the change on which a premium would have fallen due if the change had not
occurred; and
(2) The present value of the increase in
future guaranteed benefits provided for by the policy.
(b) “B” equals the present value of an annuity of
one per annum payable on each anniversary of the policy on or after the date of
change on which a premium falls due.
7. In the case of a policy issued on a
substandard basis which provides reduced graded amounts of insurance so that,
in each policy year, the policy has the same tabular mortality cost as an
otherwise similar policy issued on the standard basis which provides higher
uniform amounts of insurance, adjusted premiums and present values for the
substandard policy may be calculated as if it were issued to provide the higher
uniform amounts of insurance on the standard basis.
8. All adjusted premiums and present
values referred to in NRS 688A.290 to 688A.360, inclusive, must be calculated for all
policies of ordinary insurance on the basis of the Commissioners 1980 Standard
Ordinary Mortality Table or, at the election of the insurer for any one or more
specified plans of life insurance, the Commissioners 1980 Standard Ordinary
Mortality Table with Ten-Year Select Mortality Factors; all policies of
industrial insurance must be calculated on the basis of the Commissioners 1961
Standard Industrial Mortality Table; and all policies issued in a particular
calendar year must be calculated on the basis of a rate of interest not
exceeding the nonforfeiture interest rate established in this section for
policies issued in that calendar year, except as follows:
(a) At the option of the insurer, calculations
for all policies issued in a particular calendar year may be made on the basis
of a rate of interest not exceeding the nonforfeiture interest rate,
established in this section, for policies issued in the immediately preceding
calendar year.
(b) Under any paid-up nonforfeiture benefit,
including any paid-up dividend additions, any cash surrender value available,
whether or not required by NRS 688A.290, must be
calculated on the basis of the mortality table and rate of interest used in
determining the amount of the paid-up nonforfeiture benefit and paid-up
dividend additions, if any.
(c) An insurer may calculate the amount of any
guaranteed paid-up nonforfeiture benefit including any paid-up additions under
the policy on the basis of an interest rate which is not lower than that
specified in the policy for calculating cash surrender values.
(d) In calculating the present value of any
paid-up term insurance with accompanying pure endowment, if any, offered as a
nonforfeiture benefit, the rates of mortality assumed may be not more than
those shown in the Commissioners 1980 Extended Term Insurance Table for
policies of ordinary insurance and not more than the Commissioners 1961
Industrial Extended Term Insurance Table for policies of industrial insurance.
(e) For insurance issued on a substandard basis
or a special underwriting basis, the calculation of any adjusted premiums and
present values may be based on appropriate modifications of the tables
specified in this subsection.
(f) Any ordinary mortality tables which are
adopted after 1980 by the National Association of Insurance Commissioners and
are approved by a regulation adopted by the Commissioner for use in determining
the minimum nonforfeiture standard may be substituted for the Commissioners
1980 Standard Ordinary Mortality Table with or without Ten-Year Select
Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table.
(g) Any industrial mortality tables which are
adopted after 1980 by the National Association of Insurance Commissioners and
are approved by a regulation adopted by the Commissioner for use in determining
the minimum nonforfeiture standard may be substituted for the Commissioners
1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial
Extended Term Insurance Table.
9. The nonforfeiture interest rate for any
policy issued in a particular calendar year must be equal to 125 percent of the
calendar year statutory valuation interest rate for the policy as defined in
the Standard Valuation Law, rounded to the nearer one-fourth of 1 percent.
10. Any refiling of nonforfeiture values
or their methods of computation for any previously approved policy form which
involves only a change in the interest rate or mortality table used to compute
nonforfeiture values does not require refiling of any other provisions of that
policy form.
11. After July 1, 1983, any insurer may
file with the Commissioner a written notice of its election to comply with the
provision of this section after a specified date before January 1, 1989. A date
so specified is the operative date of this section for that insurer. If an
insurer makes no election, the operative date of this section for that insurer
is January 1, 1989.
(Added to NRS by 1983, 945; A 1995, 1625)
NRS 688A.330 Basis for calculating adjusted premiums on industrial insurance;
applicability of section.
1. In the case of industrial policies
issued on or after the operative date of this section, as provided in
subsection 2, all adjusted premiums and present values referred to in NRS 688A.290 to 688A.360,
inclusive, must be calculated on the basis of the Commissioners 1961 Standard
Industrial Mortality Table and the rate of interest specified in the policy for
calculating cash surrender values and paid-up nonforfeiture benefits, but that
rate of interest must not exceed 3.5 percent per annum, or 4 percent per annum
for policies issued on or after July 1, 1973, and before July 1, 1977, and a
rate of interest not exceeding 5.5 percent per annum may be used for policies
issued on or after July 1, 1977, other than single premium whole life or
endowment insurance policies, and for the latter policies a rate of interest
not exceeding 6.5 percent per annum may be used, except that:
(a) In calculating the present value of any
paid-up term insurance with accompanying pure endowment, if any, offered as a
nonforfeiture benefit, the rates of mortality assumed may be not more than
those shown in the Commissioners 1961 Industrial Extended Term Insurance Table.
(b) For insurance issued on a substandard basis
or a special underwriting basis, the calculations of any such adjusted premiums
and present values may be based on such other table of mortality as may be
specified by the insurer and approved by the Commissioner.
2. After July 1, 1963, any insurer may
file with the Commissioner a written notice of its election to comply with the
provisions of this section after a specified date before January 1, 1968. After
the filing of a notice, upon the specified date, this section is operative with
respect to the industrial policies thereafter issued by the insurer. If an
insurer makes no such election, the operative date of this section for the
insurer is January 1, 1968.
3. This section does not apply to policies
issued on or after the operative date of NRS 688A.325.
(Added to NRS by 1971, 1738; A 1973, 723; 1977, 691;
1983, 954; 1995,
1627)
NRS 688A.340 Basis for calculating adjusted premiums and present values on ordinary
policies issued after operative date of this section; election to come under
this section; operative date of this section as to insurer failing to make
election.
1. In the case of ordinary policies issued
on or after the operative date of this section, all adjusted premiums and
present values referred to in NRS 688A.290 to 688A.360, inclusive, must be calculated on the basis
of the Commissioners 1958 Standard Ordinary Mortality Table and the rate of
interest specified in the policy for calculating cash surrender values and
paid-up nonforfeiture benefits, but the rate of interest must not exceed 3.5
percent per annum, or 4 percent per annum for policies issued on or after July
1, 1973, and before July 1, 1977, and a rate of interest not exceeding 5.5
percent per annum may be used for policies issued on or after July 1, 1977,
other than single premium whole life or endowment insurance policies, and for
the latter policies a rate of interest not exceeding 6.5 percent per annum may
be used, except that:
(a) For any category of ordinary insurance issued
on female risks, adjusted premiums and present values may be calculated
according to an age not more than 6 years younger than the actual age of the
insured.
(b) In calculating the present value of any
paid-up term insurance with accompanying pure endowment, if any, offered as a
nonforfeiture benefit, the rates of mortality assumed may be not more than
those shown in the Commissioners 1958 Extended Term Insurance Table.
(c) The calculation of adjusted premiums and
present values for insurance issued on a substandard basis may be based on such
other table of mortality as may be specified by the insurer and approved by the
Commissioner.
2. Any insurer may file with the
Commissioner a written notice of its election to comply with the provisions of
this section after a specified date before January 1, 1966. After the filing of
the notice, this section becomes operative upon the specified date with respect
to the ordinary policies thereafter issued by the insurer.
3. If an insurer makes no such election,
the operative date of this section for the insurer is January 1, 1966.
4. This section does not apply to ordinary
policies issued on or after the operative date of NRS
688A.325.
(Added to NRS by 1971, 1739; A 1973, 723; 1977, 692;
1983, 955)
NRS 688A.350 Calculation of cash surrender value and paid-up nonforfeiture
benefit.
1. Any cash surrender value and any
paid-up nonforfeiture benefit, available under the policy in the event of
default in a premium payment due at any time other than on the policy anniversary,
must be calculated with allowance for the lapse of time and the payment of
fractional premiums beyond the last preceding policy anniversary.
2. All values referred to in NRS 688A.300 to 688A.340,
inclusive, may be calculated upon the assumption that any death benefit is
payable at the end of the policy year of death.
3. The net value of any paid-up additions,
other than paid-up term additions, must not be less than the amounts used to
provide the additions.
4. Notwithstanding the provisions of NRS 688A.300, additional benefits payable:
(a) In the event of death or dismemberment by
accident or accidental means;
(b) In the event of total and permanent
disability;
(c) As reversionary annuity or deferred
reversionary annuity benefits;
(d) As term insurance benefits provided by a
rider or supplemental policy provision to which, if issued as a separate
policy, NRS 688A.290 to 688A.360,
inclusive, would not apply;
(e) As term insurance on the life of a child or
on the lives of children provided in a policy on the life of a parent of the
child, if the term insurance expires before the child’s age is 26, is uniform
in amount after the child’s age is 1, and has not become paid up by reason of
the death of a parent of the child;
(f) As other policy benefits additional to life
insurance and endowment benefits; and
(g) Premiums for all such additional benefits,
Ê must be
disregarded in ascertaining cash surrender values and nonforfeiture benefits
required by NRS 688A.290 to 688A.360, inclusive, and no such additional benefits
may be required to be included in any paid-up nonforfeiture benefits.
(Added to NRS by 1971, 1740; A 1983, 956)
NRS 688A.360 Insurance to which NRS 688A.290 to 688A.360,
inclusive, not applicable. NRS 688A.290 to 688A.360,
inclusive, do not apply to any:
1. Reinsurance, group insurance, pure
endowment, annuity or reversionary annuity contract.
2. Term policy of uniform amount which
provides no guaranteed nonforfeiture or endowment benefits, or the renewal
thereof, of 20 years or less expiring before age 71, for which uniform premiums
are payable during the entire term of the policy.
3. Term policy of decreasing amount which
provides no guaranteed nonforfeiture or endowment benefits on which each
adjusted premium, calculated as specified in NRS
688A.320 to 688A.340, inclusive, is less than
the adjusted premium, calculated in the same manner, on a term policy of
uniform amount, or a renewal thereof, which provides no guaranteed
nonforfeiture or endowment benefits, issued at the same age and for the same
initial amount of insurance and for a term of 20 years or less, expiring before
age 71, for which uniform premiums are payable during the entire term of the
policy.
4. Policy which provides no guaranteed
nonforfeiture or endowment benefits, for which no cash surrender value, if any,
or present value of any paid-up nonforfeiture benefit, at the beginning of any
policy year, calculated as specified in NRS 688A.300
to 688A.340, inclusive, exceeds 2.5 percent of the
amount of insurance at the beginning of the same policy year.
5. Policy which is delivered outside this
state by an agent or other representative of the company issuing the policy.
Ê For purposes
of determining whether NRS 688A.290 to 688A.360, inclusive, apply, the age at expiration for
a joint term policy of life insurance is the age of the oldest person at the
time of expiration.
(Added to NRS by 1971, 1740; A 1983, 957)
NONFORFEITURE LAW: DEFERRED ANNUITIES
NRS 688A.361 Nonforfeiture provisions required in annuity contracts. No contract of annuity may be delivered or
issued for delivery in this state unless it contains in substance the following
provisions, or corresponding provisions which in the opinion of the
Commissioner are at least as favorable to the contract holder:
1. A statement that upon cessation of
payment of considerations under a contract, or upon receipt of a written
request submitted by an owner of a contract, the company will grant a paid-up
annuity benefit on a plan stipulated in the contract of such value as is
specified in NRS 688A.3631 to 688A.3637, inclusive, and 688A.366;
2. If a contract provides for a lump-sum
settlement at maturity or any other time, a statement that upon surrender of
the contract at or before the commencement of any annuity payments, the company
will pay in lieu of any paid-up annuity benefit a cash surrender benefit of an
amount specified in NRS 688A.3631, 688A.3633, 688A.3637
and 688A.366, and that the company may reserve the
right to defer the payment of such cash surrender benefit for a period of not
more than 6 months after demand therefor with surrender of the contract if the
company submits a written request to and receives written approval for the
deferral from the Commissioner. The request must address the necessity and
equitability to all policyholders of the deferral;
3. A statement of the mortality table, if
any, and interest rates used in calculating any minimum paid-up annuity, cash
surrender or death benefits which are guaranteed under the contract, together
with sufficient information to determine the amounts of those benefits; and
4. A statement that any paid-up annuity,
cash surrender or death benefits which may be available under the contract are
not less than the minimum benefits required by any statute of the state in
which the contract is delivered and an explanation of the manner in which such
benefits are altered by the existence of any additional amounts credited by the
company to the contract, any indebtedness to the company on the contract or any
prior withdrawals from or partial surrenders of the contract,
Ê except that
any deferred annuity contract may provide that if no considerations have been
received under a contract for a period of 2 full years, and the portion of the
paid-up annuity benefit at maturity on the plan stipulated in the contract
arising from considerations paid before that period would be less than $20
monthly, the company may terminate the contract by payment in cash of the then
present value of such portion of the paid-up annuity benefit, calculated on the
basis of the mortality table, if any, and interest rate specified in the
contract for determining the paid-up annuity benefit, and by such payment shall
be relieved of any further obligation under the contract.
(Added to NRS by 1977, 688; A 1979, 86; 2003, 3315)
NRS 688A.363 Minimum nonforfeiture amounts.
1. The minimum values, specified in NRS 688A.3631 to 688A.3637,
inclusive, and 688A.366, of any paid-up annuity,
cash surrender or death benefits available under an annuity contract must be
based upon minimum nonforfeiture amounts as defined in this section.
2. The minimum nonforfeiture amount for
any time at or before the commencement of any annuity payments is equal to an
accumulation of 87.5 percent of the gross considerations up to such time at a
rate of interest calculated pursuant to subsection 3, which must be decreased
by the sum of:
(a) Any prior withdrawals from or partial
surrenders of the contract, accumulated at a rate of interest calculated
pursuant to subsection 3;
(b) An annual charge in the amount of $50, accumulated
at rates of interest calculated pursuant to subsection 3;
(c) Any premium tax paid by the company for the
contract, accumulated at rates of interest calculated pursuant to subsection 3;
and
(d) The amount of any indebtedness to the company
on the contract, including interest due and accrued.
3. For the purpose of this section, the
rate of interest used to determine the minimum nonforfeiture amounts must be an
annual rate of interest determined as the lesser of 3 percent per annum or a
rate specified in the contract if the rate is calculated in accordance with
regulations adopted by the Commissioner, except that at no time may the
resulting rate be less than 1 percent per annum.
4. The Commissioner may provide by
regulation for further adjustments to the calculation of minimum nonforfeiture
amounts for contracts that provide substantive participation in an equity index
benefit or for other contracts that the Commissioner determines require
adjustment. An adjustment to the calculation of the interest rate used to
determine the minimum nonforfeiture amounts authorized under this subsection
may not result in an interest rate of less than 1 percent per annum.
(Added to NRS by 1977, 688; A 2003, 3316; 2011, 3373)
NRS 688A.3631 Value of paid-up annuity benefits when benefit payments to
commence. Any paid-up annuity
benefit available under a contract shall be such that its present value on the
date when the annuity payments are to commence is at least equal to the minimum
nonforfeiture amount on that date. Such present value shall be computed by
using the mortality table, if any, and the interest rate specified in the
contract for determining the minimum paid-up annuity benefits guaranteed in the
contract.
(Added to NRS by 1977, 689)
NRS 688A.3633 Value of cash surrender and death benefits before maturity.
1. For contracts which provide cash
surrender benefits, such benefits available before maturity shall not be less
than the present value as of the date of surrender of that portion of the
maturity value of the paid-up annuity benefit which would be provided under the
contract at maturity arising from considerations paid before the time of cash
surrender, reduced by the amount appropriate to reflect any prior withdrawals
from or partial surrenders of the contract, such present value being calculated
on the basis of an interest rate of not more than 1 percent higher than the
interest rate specified in the contract for accumulating the net considerations
to determine such maturity value, decreased by the amount of any indebtedness
to the company on the contract, including interest due and accrued, and
increased by any existing additional amounts credited by the company to the
contract. Any cash surrender benefit shall not be less than the minimum
nonforfeiture amount at that time. The death benefit under such contracts shall
be at least equal to the cash surrender benefit.
2. For annuity contracts issued on or
after January 1, 2012, that provide cash surrender benefits:
(a) The cash surrender value on or past the
maturity date must be equal to the amount used to determine the annuity
benefits;
(b) A surrender charge may not be imposed on or
past the maturity date of the annuity contract; and
(c) For annuity contracts with one or more renewable
guaranteed periods, a new surrender charge schedule may be imposed for each new
guaranteed period if:
(1) The surrender charge is zero at the
end of each guaranteed period and remains zero for at least 30 days;
(2) The contract provides for continuation
of the contract without surrender charges unless the contract holder
specifically elects a new guaranteed period with a new surrender charge
schedule; and
(3) The renewal period does not exceed 10
years and the maturity date complies with NRS
688A.3637.
3. An annuity contract that provides for
flexible considerations may have separate surrender charge schedules associated
with each consideration.
(Added to NRS by 1977, 689; A 2011, 3374)
NRS 688A.3635 Value of paid-up annuity benefits before maturity for contracts
not providing cash surrender or death benefits. For
contracts which do not provide cash surrender benefits, the present value of
any paid-up annuity benefit available as a nonforfeiture option at any time
before maturity shall not be less than the present value of that portion of the
maturity value of the paid-up annuity benefit provided under the contract
arising from considerations paid before the time when the contract is
surrendered in exchange for or changed to a deferred paid-up annuity, such
present value being calculated for the period before the maturity date on the
basis of the interest rate specified in the contract for accumulating the net
considerations to determine such maturity value, and increased by any existing
additional amounts credited by the company to the contract. For contracts which
do not provide any death benefits before the commencement of any annuity
payments, the present values shall be calculated on the basis of such interest
rate and the mortality table specified in the contract for determining the maturity
value of the paid-up annuity benefit. The present value of a paid-up annuity
benefit shall not be less than the minimum nonforfeiture amount at that time.
(Added to NRS by 1977, 690)
NRS 688A.3637 Maturity date.
1. For the purpose of determining the
benefits calculated under NRS 688A.3633 and 688A.3635:
(a) In the case of annuity contracts issued
before January 1, 2012, under which an election may be made to have annuity
payments commence at optional maturity dates, the maturity date shall be deemed
to be the latest date for which election is permitted by the contract, but
shall not be deemed to be later than the anniversary of the contract next
following the annuitant’s 70th birthday or the 10th anniversary of the
contract, whichever is later.
(b) In the case of annuity contracts issued on or
after January 1, 2012, the maturity date shall be deemed to be the latest date
permitted by the contract, but shall not be deemed to be later than the
anniversary of the contract next following the annuitant’s 70th birthday or the
10th anniversary of the contract, whichever is later.
2. For the purpose of determining the
maturity date under this section for an annuity contract that provides for
flexible considerations, the 10th anniversary of the contract is determined
separately for each consideration.
(Added to NRS by 1977, 690; A 2011, 3375)
NRS 688A.364 Statement that policy does not provide cash surrender benefits
or death benefits equal to nonforfeiture amount. Any
contract which does not provide cash surrender benefits or does not provide
death benefits at least equal to the minimum nonforfeiture amount before the
commencement of any annuity payments shall include a statement in a prominent
place in the contract that such benefits are not provided.
(Added to NRS by 1977, 690)
NRS 688A.366 Calculation of benefits available at time other than contract
anniversary. Any paid-up annuity,
cash surrender or death benefits available at any time, other than on the
contract anniversary under any contract with fixed scheduled considerations,
shall be calculated with allowance for the lapse of time and the payment of any
scheduled considerations beyond the beginning of the contract year in which
cessation of payment of considerations under the contract occurs.
(Added to NRS by 1977, 690)
NRS 688A.367 Minimum nonforfeiture benefits for contracts providing both
annuity and life insurance benefits. For
any contract which provides, within the same contract by rider or supplemental
contract provision, both annuity benefits and life insurance benefits which are
in excess of the greater of cash surrender benefits or a return of the gross
considerations with interest, the minimum nonforfeiture benefits shall be equal
to the sum of the minimum nonforfeiture benefits for the annuity portion and
the minimum nonforfeiture benefits, if any, for the life insurance portion
computed as if each portion were a separate contract. Any additional benefits
payable:
1. In the event of total and permanent
disability;
2. As reversionary annuity or deferred
reversionary annuity benefits; or
3. As other policy benefits additional to
life insurance, endowment and annuity benefits,
Ê and
considerations for all such additional benefits shall be disregarded in ascertaining
the minimum nonforfeiture amounts, paid-up annuity, cash surrender and death
benefits which may be required by NRS 688A.361 to 688A.369, inclusive. The inclusion of such additional
benefits shall not be required in any paid-up benefits, unless the additional
benefits separately would require minimum nonforfeiture amounts, paid-up
annuity, cash surrender and death benefits.
(Added to NRS by 1977, 690)
NRS 688A.369 Insurance to which NRS 688A.361 to 688A.369,
inclusive, not applicable. NRS 688A.361 to 688A.369,
inclusive, do not apply to any reinsurance, group annuity purchased under a
retirement plan or plan of deferred compensation established or maintained by
an employer (including a partnership or sole proprietorship), by an employee
organization, or by both, other than a plan providing individual retirement
accounts or individual retirement annuities under section 408 of the Internal
Revenue Code, as amended, premium deposit fund, variable annuity, investment
annuity, immediate annuity, deferred annuity contract after annuity payments
have commenced, reversionary annuity or to any contract which will be delivered
outside this state through an agent or other representative of the company
issuing the contract.
(Added to NRS by 1977, 687)
MISCELLANEOUS PROVISIONS
NRS 688A.370 Reinstatement; benefits for disability or accidental death.
1. A reinstated policy of life insurance
or an annuity contract may be contested on account of fraud or
misrepresentation of facts material to the reinstatement only for the same
period following reinstatement and with the same conditions and exceptions as
the policy provides with respect to contestability after original issuance.
2. When any life insurance policy or
annuity contract is reinstated such reinstated policy or contract may exclude
or restrict liability to the same extent that such liability could have been or
was excluded or restricted when the policy or contract was originally issued,
and such exclusion or restriction shall be effective from the date of
reinstatement.
3. After 3 years from the date of issue of
a life insurance policy or of a supplemental contract thereto providing total
and permanent disability benefits or additional benefits in the event of death
by accident or accidental means, no misstatements, except fraudulent
misstatements, made by the applicant in the application for the policy shall be
used to deny a claim for such total and permanent disability commencing, or for
such additional benefits in the event of death by accident or accidental means
occurring, after the expiration of such 3-year period. This subsection shall
not be so construed as to preclude the assertion at any time of defenses based
upon provisions with respect to such benefits which exclude or restrict
coverage.
(Added to NRS by 1971, 1741)
NRS 688A.380 Participating and nonparticipating policies: Accounting; allocations;
dividends.
1. A life insurer issuing both
participating and nonparticipating policies shall maintain such accounting
records as are necessary for it to determine dividends to participating
policyholders on an equitable basis.
2. For the purposes of such accounting
records the insurer shall make a reasonable allocation between participating
and nonparticipating policies of the expenses of such general operations or
functions as are jointly shared. Any allocation of expense between the respective
categories shall be made upon a reasonable basis, to the end that each category
shall bear a just portion of joint expense involved in the administration of
the business of such category.
3. No policy after January 1, 1972, shall
provide for, and no life insurer or representative shall, after January 1,
1972, knowingly offer or promise payment, credit or distribution of
participating “dividends,” “earnings,” “profits” or “savings,” by whatever name
called, to participating policies out of such profits, earnings or savings on
nonparticipating policies. This subsection does not restrict the generality of NRS 686A.110 (rebates).
(Added to NRS by 1971, 1741)
NRS 688A.390 Separate accounts.
1. A domestic life insurer may establish
one or more separate accounts, and may allocate thereto amounts (including
without limitation proceeds applied under optional modes of settlement or under
dividend options) to provide for life insurance or annuities (and benefits
incidental thereto), payable in fixed or variable amounts or both, subject to
the following:
(a) The income, gains and losses, realized or
unrealized, from assets allocated to a separate account shall be credited to or
charged against the account, without regard to other income, gains or losses of
the company.
(b) Except as may be provided with respect to
reserves for guaranteed benefits and funds referred to in paragraph (c):
(1) Amounts allocated to any separate
account and accumulations thereon may be invested and reinvested without regard
to any requirements or limitations prescribed by the laws of this state
governing the investments of life insurance companies; and
(2) The investments in such separate
account or accounts shall not be taken into account in applying the investment
limitations otherwise applicable to the investments of the company.
(c) Except with the approval of the Commissioner
and under such conditions as to investments and other matters as the
Commissioner may prescribe, which shall recognize the guaranteed nature of the
benefits provided, reserves for:
(1) Benefits guaranteed as to dollar
amount and duration; and
(2) Funds guaranteed as to principal
amount or stated rate of interest,
Ê shall not be
maintained in a separate account.
(d) Unless otherwise approved by the
Commissioner, assets allocated to a separate account shall be valued at their
market value on the date of valuation, or if there is no readily available
market, then as provided under the terms of the contract or the rules or other
written agreement applicable to such separate account; but unless otherwise
approved by the Commissioner, the portion if any of the assets of such separate
account equal to the company’s reserve liability with regard to the guaranteed
benefits and funds referred to in paragraph (c) shall be valued in accordance
with the rules otherwise applicable to the company’s assets.
(e) Amounts allocated to a separate account in
the exercise of the power granted by this section shall be owned by the
company, and the company shall not be, nor hold itself out to be, a trustee
with respect to such amounts. If and to the extent so provided under the
applicable contracts, that portion of the assets of any such separate account
equal to the reserves and other contract liabilities with respect to such
account shall not be chargeable with liabilities arising out of any other
business the company may conduct.
(f) No sale, exchange or other transfer of assets
may be made by a company between any of its separate accounts or between any
other investment account and one or more of its separate accounts unless, in
case of a transfer into a separate account, such transfer is made solely to
establish the account pursuant to subsection 6 or to support the operation of
the contracts with respect to the separate account to which the transfer is
made, and unless such transfer, whether into or from a separate account, is
made:
(1) By a transfer of cash; or
(2) By a transfer of securities having a
readily determinable market value, provided that such transfer of securities is
approved by the Commissioner.
Ê The
Commissioner may approve other transfers among such accounts if, in the opinion
of the Commissioner, such transfers would not be inequitable.
(g) To the extent such company deems it necessary
to comply with any applicable federal or state laws, such company, with respect
to any separate account, including without limitation any separate account
which is a management investment company or a unit investment trust, may
provide for persons having an interest therein appropriate voting and other
rights and special procedures for the conduct of the business of such account,
including without limitation special rights and procedures relating to investment
policy, investment advisory services, selection of independent public
accountants and the selection of a committee, the members of which need not be
otherwise affiliated with such company, to manage the business of such account.
2. Any contract providing benefits payable
in variable amounts delivered or issued for delivery in this state, including a
group contract and any certificate issued thereunder, shall contain a statement
of the essential features of the procedures to be followed by the insurance
company in determining the dollar amount of such variable benefits. Any such
contract under which the benefits vary to reflect investment experience,
including a group contract and any certificate in evidence of variable benefits
issued thereunder, shall state that such dollar amount will so vary and shall
contain on its first page a statement to the effect that the benefits
thereunder are on a variable basis.
3. No company shall deliver or issue for
delivery within this state variable contracts unless it is licensed or
organized to do a life insurance or annuity business in this state, and the
Commissioner is satisfied that its condition or method of operation in
connection with the issuance of such contracts will not render its operation
hazardous to the public or its policyholders in this state. In this connection,
the Commissioner shall consider among other things:
(a) The history and financial condition of the
company;
(b) The character, responsibility and fitness of
the officers and directors of the company; and
(c) The law and regulations under which the
company is authorized in the state of domicile to issue variable contracts.
Ê If the
company is a subsidiary of an admitted life insurance company, or affiliated
with such company through common management or ownership, it may be deemed by
the Commissioner to have met the provisions of this subsection if either it or
the parent or the affiliated company meets the requirements hereof.
4. Notwithstanding any other provision of
law, the Commissioner has sole authority to regulate the issuance and sale of
variable contracts, and to issue such reasonable rules and regulations as may
be appropriate to carry out the purposes and provisions of this section.
5. Except for NRS
688A.190, 688A.240 and 688A.250
in the case of a variable annuity contract and NRS
688A.060, 688A.110, 688A.120,
688A.130, 688A.290 to
688A.360, inclusive, and 688B.050 in the case of a variable life
insurance policy and except as otherwise provided in this Code, all pertinent
provisions of this Code shall apply to separate accounts and contracts relating
thereto. Any individual variable life insurance contract, delivered or issued
for delivery in this state, shall contain grace, reinstatement and
nonforfeiture provisions appropriate to such a contract. Any individual
variable annuity contract, delivered or issued for delivery in this state,
shall contain grace and reinstatement provisions appropriate to such a
contract. The reserve liability for variable contracts shall be established in
accordance with actuarial procedures that recognize the variable nature of the
benefits provided and any mortality guarantees.
6. A domestic life insurer which
establishes one or more separate accounts pursuant to this section may
participate therein by allocating and contributing to such separate account
funds which otherwise might be invested pursuant to subsection 1 of NRS 682A.050 and NRS 682A.110. The insurer shall have a
proportionate interest in any such account, along with all other participating
contract holders, to the extent of its participation therein, and with respect
thereto shall also be subject to all the provisions of NRS 682A.210 applicable to separate
account contract holders generally. The aggregate amount so allocated or
contributed by such an insurer to one or more separate accounts shall not,
without the consent of the Commissioner, exceed the greater of:
(a) One hundred thousand dollars;
(b) One percent of its admitted assets as of
December 31 next preceding; or
(c) Five percent of its surplus as to
policyholders as of December 31 next preceding.
Ê All funds
allocated or contributed by the insurer to a separate account for the purpose
of participation therein shall be included in applying the limitations upon
investments otherwise specified in this Code. The insurer shall be entitled to
withdraw at any time in whole or in part its participation in any separate
account to which funds have been allocated or contributed and to receive upon
withdrawal its proportional share of the value of the assets of the separate
account at the time of withdrawal.
(Added to NRS by 1971, 1742; A 1971, 1951)
NRS 688A.400 Prohibited policy plans.
1. No life insurer shall, after January 1,
1972, deliver or issue for delivery in this state:
(a) As part of or in combination with any life
insurance, endowment or annuity contract, any agreement or plan, additional to
the rights, dividends and benefits arising out of any such contract, which
provides for the accumulation of profits over a period of years and for payment
of all or any part of such accumulated profits only to members or policyholders
of a designated group or class who continue as members or policyholders until
the end of a specified or ascertainable period of years.
(b) Any “registered” policy; that is, any policy
(other than one “registered” as a security under applicable state or federal
law) purporting to be “registered” or otherwise specially recorded, with any
agency of the State of Nevada, or of any other state, or with any bank, trust
company, escrow company or other institution other than the insurer, or
purporting that any reserves, assets or deposits are held, or will be so held,
for the special benefit or protection of the holder of such policy, by or
through any such agency or institution.
(c) Any policy or contract under which any part
of the premium or of funds or values arising from the policy or contract or
from investment of reserves, or from mortality savings, lapses or surrenders,
in excess of the normal reserves or amounts required to pay death, endowment
and nonforfeiture benefits in respective amounts as specified in or pursuant to
the policy or contract, are on a basis not involving insurance or life
contingency features:
(1) To be placed in special funds or
segregated accounts or specially designated places; or
(2) To be invested in specially designated
investments or types thereof,
Ê and the funds
or earnings thereon to be divided among the holders of such policies or
contracts, or their beneficiaries or assignees. This paragraph does not apply
to any contract authorized under NRS 688A.390.
(d) Any policy providing for the segregation of
policyholders into mathematical groups and providing benefits for a surviving
policyholder arising out of the death of another policyholder of such group, or
under any other similar plan.
(e) Any policy providing benefits or values for
surviving or continuing policyholders contingent upon the lapse or termination
of the policies of other policyholders, whether by death or otherwise.
(f) Any policy providing that on the death of
anyone not specifically named therein, the owner or beneficiary of the policy
shall receive the payment or granting of anything of value. This provision
shall not be deemed to prohibit family policies insuring unspecified members of
a family, nor be deemed to prohibit payment to unspecified beneficiaries of a
class which has been expressly designated as such by the insured or policy
owner.
(g) Any policy containing or referring to one or
more of the following provisions or statements:
(1) Investment returns or profit sharing,
other than as a participation in the divisible surplus of the insurer under a
regular participation provision as provided for in NRS
688A.100.
(2) Special treatment in the determination
of any dividend that may be paid as to such policy.
(3) Reference to premiums as “deposits.”
(4) Relating policyholder interest or
returns to those of stockholders.
(5) That the policyholder as a member of a
select group will be entitled to extra benefits or extra dividends not
available to policyholders generally.
2. This section does not prohibit the
provision, payment, allowance or apportionment of regular dividends or
“savings” under regular participating forms of policies or contracts.
(Added to NRS by 1971, 1744)
NRS 688A.410 Payment of life insurance proceeds; interest. An insurer shall pay the proceeds of any
benefits under a policy of life insurance not more than 30 days after the death
of the insured. If the proceeds are not paid within this period, the insurer
shall pay interest on the proceeds, at a rate which is not less than the
current rate of interest on death proceeds on deposit with the insurer, from
the date of death of the insured to the date when the proceeds are paid.
(Added to NRS by 1977, 626)
NRS 688A.430 Delivery of group annuity to group formed to purchase annuity
prohibited. No group annuity may
be delivered or issued for delivery in this state to a group which was
principally formed for the purpose of purchasing one or more group annuities.
(Added to NRS by 1985, 1059)
NRS 688A.440 Incorporation of long-term care insurance into annuity or policy
of life insurance.
1. An annuity or policy of life insurance
may incorporate long-term care insurance if:
(a) The long-term care insurance incorporated
into the annuity or policy of life insurance complies with regulations adopted
by the Commissioner.
(b) The Commissioner approves the incorporation
of long-term care insurance into the annuity or policy of life insurance.
2. The Commissioner shall adopt
regulations that define “long-term care insurance” for the purposes of this section.
(Added to NRS by 2011, 3372)