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Nrs: Chapter 688A - Life Insurance And Annuity Contracts


Published: 2015

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[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.

_________

_________

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)