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84106reg

Part 2 Chapter 9: (84-106) Universal Life Regulation.



Rule 9.01: Preamble and Authority



I, George Dale, duly elected Commissioner of Insurance of the State of Mississippi, pursuant to

the authority granted in me in Section 83-7-25, Mississippi Code of 1972, as Amended, and in

accordance with Sections 25-43-1 through 25-43-19, Mississippi Code of 1972, known as the

Mississippi Administrative Procedure Law, do hereby promulgate the following Rules and

Regulation with an effective date as herein set forth in Section 9.12, upon compliance with the

applicable statutes.



Source: Miss. Code Ann. §§ 83-5-1; 83-7-23; 83-7-25 (Rev 2011)



Rule 9.02: Purpose



The purpose of this regulation is to supplement existing regulations on life insurance policies in

order to accommodate the development and issuance of universal life insurance plans.



Source: Miss. Code Ann. §§ 83-5-1; 83-7-23; 83-7-25 (Rev 2011)



Rule 9.03: Definitions



As used in this regulation:



A. Universal Life Insurance Policy.



“Universal life insurance policy” means any individual life insurance

policy under the provisions of which separately identified interest credits

(other than in connection with dividend accumulations, premium deposit

funds, or other supplementary accounts) and mortality and expense

charges are made to the policy. A universal life insurance policy may

provide for other credits and charges, such as charges for the cost of

benefits provided by rider.

B. Flexible Premium Universal Life Insurance Policy.

“Flexible premium universal life insurance policy” means a universal life

insurance policy which permits the policyowner to vary, independently of

each other, the amount or timing of one or more premium payments or the

amount of insurance.

C. Fixed Premium Universal Life Insurance Policy.

“Fixed premium universal life insurance policy” means a universal life

insurance policy other than a flexible premium universal life insurance

policy.



D. Interest-Indexed Universal Life Insurance Policy.



“Interest-indexed universal life insurance policy” means any universal life insurance

policy where the interest credits are linked to an external

referent.



E. Net Cash Surrender Value.



“Net Cash Surrender Value” means the maximum amount payable to the policyowner

upon surrender.



F. Cash Surrender Value.



“Cash Surrender Value” means the Net Cash Surrender Value plus any amounts

outstanding as policy loans.



G. Policy Value.



“Policy Value” means the amount of which separately identified interest credits and

mortality, expense, or other charges are made under a universallife insurance policy.



H. May.



“May” is permissive.



I. Shall.



“Shall” is mandatory.



J. Commissioner.

“Commissioner” means the Commissioner of Insurance for the State of Mississippi.



Source: Miss. Code Ann. § 83-5-1(Rev. 2011)



Rule 9.04: Scope



This regulation encompasses all individual universal life insurance policies except those policies

defined under Section 2(s) of the Mississippi Variable Life Insurance Regulation Number 84-

101.



Source: Miss. Code Ann. § 83-5-1(Rev. 2011)



Rule 9.05: Valuation



A. Requirements.



1. Theminimumvaluationstandardforuniversallifeinsurancepoliciesshall 

 betheCommissionersReserveValuationMethod,asdescribedbelowfor  

 suchpolicies,andthetablesandinterestratesspecifiedbelow.The  

 terminalreserveforthebasicpolicyandanybenefitsand/orridersfor  

 whichpremiumsarenot

paidseparatelyasofanypolicyanniversaryshall  

 beequaltothenetlevelpremiumreservesless(C)andless(D),where:



 Reservesbythenetlevelpremiummethodshallbeequalto((A)‐(B))r 

 where(A),(B)and rareasdefinedbelow:



 (A) isthepresentvalueofallfutureguaranteedbenefitsatthedateof  

valuation.



 (B) isthequantity











,wherePVBFisthepresentvalueof

 allbenefitsatissueassumingfutureGuaranteedMaturity

 Premiumsarepaidbythepolicyownerandtakingintoaccountall

 guaranteescontainedinthepolicyordeclaredbytheinsurer.







and



arepresentvaluesofanannuityofoneperyear

 payableonpolicyanniversariesbeginningatagesxandx+t,

 respectively,andcontinuing untilthehighestattainedage atwhich

 apremiummaybepaidunderthepolicy.(x)isdefinedastheissue  

 ageand(t)is

definedasthedurationofthepolicy.



TheGuaranteedMaturityPremiumforflexiblepremiumuniversal  

lifeinsurancepoliciesshallbethatlevelgrosspremium,paidat

 issueandperiodicallythereafterovertheperiodduringwhich

 premiumsareallowedtobepaid,whichwillmaturethepolicyon

 the

latestmaturity date,ifany,permittedunder thepolicy

 (otherwiseatthehighestageinthevaluationmortalitytable),for

 anamountwhichisinaccordancewiththepolicystructure.The

 GuaranteedMaturityPremiumiscalculatedatissue basedonall

 policyguaranteesatissue(excludingguaranteeslinkedto

an

 externalreferent).TheGuaranteedMaturityPremiumforfixed

 premiumuniversallifeinsurancepoliciesshallbethepremium

 definedinthepolicywhichatissueprovidestheminimumpolicy

 guarantees.



ris equal to one, unless the policy is a flexible premium policy and

the policy value is less than the Guaranteed Maturity Fund, in

which case e is the ration of the policy value to the Guaranteed

Maturity Fund.



TheGuaranteedMaturityFundatanydurationisthatamount

 which, togetherwithfutureGuaranteedMaturityPremiums,will

 maturethepolicybasedonallpolicyguaranteesatissue.















where (a)-(b) is as described in

(Section Four of the Standard Valuation Law, as amended in 1980)

for the plan of insurance defined at issue by the Guaranteed

Maturity premiums and all guarantees contained in the policy or

declared by the insurer.







+tand



aredefinedin(B)above.



 (D) isthesumofanyadditionalquantitiesanalogousto(C)whicharise  

 becauseofstructuralchangesinthepolicy,witheachsuchquantity  

 beingdeterminedonabasisconsisten twiththatof(C)usingthe

 maturitydateineffectatthetimeofthechange.



The Guaranteed Maturity Premium, the Guaranteed Maturity Fund

and (B) above shall be recalculated to reflect any structural

changes in the policy. This recalculation shall be done in a manner

consistent with the descriptions above.

Future guaranteed benefits are determined by (1) projecting the

greater of the Guaranteed Maturity Fund and the policy value,

taking into account future guaranteed Maturity Premiums, if any,

and using all guarantees of interest, mortality, expense deductions,

etc., contained in the policy or declared by the insurer; and (2)

taking into account any benefits guaranteed in the policy or by

declaration which do not depend on the policy value.

All present values shall be determined using (1) and interest rate

(or rates) specified by (the Standard Valuation Law, as amended in

1980) for policies issued in the same year; (ii) the mortality rates

specified by (the Standard Valuation Law, as amended in 1980) for

policies issued in the same year or contained in such other table as

may be approved by the Commissioner for this purpose; and (iii)

any other tables needed to value supplementary benefits provided

by a rider which is being valued together with the policy.



B. Alternative Minimum Reserves.



1. If,inanypolicyyear,theGuaranteedMaturityPremiumonanyuniversal  

 lifeinsurancepolicyislessthanthevaluationnetpremiumforsuch  

 policy,calculatedbythevaluationmethodactuallyusedincalculatingthe  

 reservethereonbutusingtheminimumvaluationstandardsofmortality  

 andrate

ofinterest,theminimumreserverequiredforsuchcontractshall  

 bethegreaterof(a)or(b).



 (a) Thereservecalculatedaccordingtothemethod,themortality 

 table,andtherateofinterestactuallyused.



 (b) Thereservecalculatedaccordingtothemethod actuallyusedbut  

usingthe

minimumvaluationstandardsofmortalityandrateof

 interestandreplacingthevaluationnetpremiumbytheGuaranteed  

 MaturityPremiumineachpolicyyearforwhichthevaluationnet

 premiumexceedstheGuaranteedMaturityPremium.



Foruniversallifeinsurancereservesonanetlevelpremiumbasis,thevaluationnet premium







andforreservesonaCommissionersReserveValuationMethod,the valuation net premium

is





















.



Source: Miss. Code Ann. § 83-7-23 (Rev. 2011)



Rule 9.06: Nonforfeiture



A. Minimum Cash Surrender Values for Flexible Premium Universal Life

Insurance Policies.



1. Minimum cash surrender values for flexible premium life insurance policies shall

be determined separately for the basic policy and any benefits and riders for

which premiums are paid separately. The following requirements pertain to a

basic policy and any benefits and riders for which premiums are not paid

separately.



 Theminimumcashsurrendervalue(beforeadjustmentforindebtedness  

 anddividendcredits)availableonadateasofwhichinterestiscreditedto  

 thepolicyshallbeequaltotheaccumulationtothatdateofthepremiums  

 paidminustheaccumulati onstothatdateof(i)thebenefit

charges,(ii)the 

 averagedadministrativeexpensechargesforthefirstpolicyyearandany  

 insurance‐increaseyears,(iii)actualadministrativeexpensechargesfor 

 otheryears,(iv)initialoradditionalacquisitionexpensechargesnot  

 exceedingtheinitialoradditionalexpenseallowances,respectively,(v)  

 anyservicechargesactuallymade(excluding

chargesforcashsurrender 

 orelectionofapaid‐upnonforfeiturebenefit)and(vi)anydeductions  

 madeforpartialwithdrawals;allaccumulationsbeingattheactualrateor  

 ratesofinterestatwhichinterestcreditshavebeenmadeunconditionally  

 tothepolicy(orhavebeenmadeconditionally,butfor

whichthe

 conditionshavesincebeenmet),andminusanyunamortizedunused  

 initialandadditionalexpenseallowances.



 Interestonthepremiumsandonallchargesreferredtoinitems(i)‐(iv)  

 aboveshallbeaccumulatedfromandtosuchdatesasareconsistentwith  

 themannerinwhichinterestiscreditedin determiningthepolicyvalue.



 Thebenefitchargesshallincludethechargesmadeformortality

andany  

 chargesmadeforridersorsupplementarybenefitsforwhichpremiumsare 

 notpaidseparately.Ifbenefitchargesaresubstantiallylevelbyduration  

 anddeveloplowornocashvalues,thentheCommissionershallhavethe  

 righttorequirehighercashvaluesunlesstheinsurerprovidesadequate 

 justificationthatthecashvaluesareappropriateinrelationtothepolicy’s  

 othercharacteristics.



 Theadministrativeexpensechargesshallincludechargesperpremium  

 payment,chargesperdollarofpremiumpaid,periodicchargesper

 thousanddollarsofinsurance,periodicperpolicycharges,andanyother  

 chargespermittedby

thepolicytobeimposedwithoutregardtothe  

 policyowner’srequestforservices.



 Theaveragedadministrativeexpensechargesforanyyearshallbethose  

 whichwouldhavebeenimposedinthatyearifthechargerateorratesfor  

 eachtransactionorperiodwithintheyearhadbeen

equaltothearithmetic  

 averageofthecorrespondingchargerateswhichthepolicystateswillbe  

 imposedinpolicyyearstwothroughtwentyindeterminingthepolicy  

 value.



 Theinitialacquisitionexpensechargesshallbetheexcessoftheexpense  

 charges,otherthanservicecharges,actuallymadein

thefirstpolicyyear  

 overtheaveragedadministrativeexpensechargesforthatyear.Additional 

 acquisitionexpensechargesshallbetheexcessoftheexpensecharges, 

 otherthanservicecharges,actuallymadeinaninsurance‐increaseyear 

 overtheaveragedadministrativeexpensechargesforthatyear.An

 insurance‐increased

yearshallbetheyearbeginningonthedateof

 increaseintheamountofinsurancebypolicyownerrequest(orbythe  

 termsofthepolicy).



 Servicechargesshallincludechargespermittedbythepolicytobe

 imposedastheresultofapolicyowner’srequestforaservice

bythe  

 insurer(suchasthefurnishingoffuturebenefitillustrations)orofspecial  

 transactions.



 Theinitialexpenseallowanceshallbetheallowanceprovidedby(items 

 (ii),(iii),and(iv)ofsectionfive)orby(items(ii)and(iii)ofsectionfive‐  

 c(1)),asapplicable,of(theStandardNonforfeitureLawforLife

 Insurance,asamendedin1980)forafixedpremium,fixedbenefit

 endowmentpolicywithafaceamountequaltotheinitialfaceamountof  

 theflexiblepremiumuniversallifeinsurancepolicy,withlevelpremiums  

 paidannuallyuntilthehighestattainedageatwhichapremiummaybe 

 paidundertheflexiblepremiumuniversallifeinsurancepolicy,and  

 maturingon

thelatestmaturitydatepermittedunderthepolicy,ifany, 

 otherwiseatthehighestageinthevaluationmortalitytable,Theunused  

 initialexpenseallowanceshallbetheexcess,ifany,oftheinitialexpense  

 allowanceovertheinitialacquisitionexpensechargesasdefinedabove.



 Iftheamountof

insuranceissubsequentlyincreaseduponrequestofthe  

 policyowner(orbythetermsofthepolicy),anadditionalexpense

 allowanceandanunusedadditionalexpenseallowanceshallbe

 determinedonabasisconsistentwiththeaboveandwith(Sectionfive‐  

 c(5)oftheStandardNonforfeitureLawforLife

Insuranceasamendedin 

 1980),usingthefaceamountandthelatestmaturitydatepermittedatthat  

 timeunderthepolicy. 



 Theunamortizedunusedinitialexpenseallowanceduringthe

 policyyearbeginningonthepolicyanniversaryatagex+t(where

 xistheissueage)shallbethe

unusedinitialexpenseallowance

 multipliedby











where



and



arepresentvaluesofan

 annuityofoneperyearpayableonpolicyanniversariesbeginning

 atagesx+tanx,respectively,andcontinuinguntilthehighest

 attainedageatwhichapremiummay bepaidunderthepolicy,

 bothonthemortalityandinterestbasesguaranteedinthe

policy.

 Anunamortizedunusedadditionalexpenseallowanceshallbethe

 unusedadditionalexpenseallowancemultipliedbyasimilarratio

 ofannuities,with



replacedbyanannuitybeginningonthedate

 asofwhichtheadditionalexpenseallowancewasdetermined.



B. Minimum Cash Surrender Values for Fixed Premium Universal Life Insurance

Policies.



1. Forfixedpremiumuniversallifeinsurancepolicies,theminimumcash  

 surrendervaluesshallbedeterminedseparatelyforthebasicpolicyand  

 anybenefitsandridersforwhichpremiumsarepaidseparately.The  

 followingrequirementspertaintoabasicpolicyandanybenefitsand  

 ridersforwhichpremiums

arenotpaidseparately.



 Theminimumcashsurrendervalue(beforeadjustmentforindebtedness  

 anddividendcredits)availableonadateasofwhichinterestiscreditedto  

 thepolicyshallbeequalto((A)‐(B)‐(C)‐(D)),where:



 (A) isthepresentvalueofallfutureguaranteedbenefits.



 (B) isthepresentvalueoffutureadjustedpremiums.Theadjusted

 premiumsarecalculatedasdescribedin[sections5and5‐aorin

 paragraph(1)ofsection5‐c],asapplicable,of[theStandard

 NonforfeitureLawforLifeInsurance,asamendedin1980].If

 section5‐c,

paragraph(1)isapplicable,thenon‐forfeiturenetlevel  

 premiumisequaltothequantity







,wherePVFBisthepresent

 valueofallbenefitsguaranteedatissueassumingfuturepremiums

 arepaidbythepolicyownerandallguaranteescontainedinthe

 policyordeclaredbytheinsurer.





ishe present value of an annuity of one per year payable on

policy anniversaries beginning at age x and continuing until the

highest attained age at which a premium may be paid under the

policy.



 (C) isthepresentvalueofanyquantitiesanalogous tothenon‐

forfeiturenetlevelpremiumwhicharisebecauseofguarantees

 declaredbytheinsureraftertheissuedateofthepolicy.



shall

 bereplacedbyanannuitybeginningonthedateasofwhichthe

 declarationbecameeffectiveandpayableuntiltheendofthe

 periodcoveredbythedeclaration.



 (D) isthesumofanyquantitiesanalogousto(B)whicharisebecause  

ofstructuralchangesinthepolicy.



Future guaranteed benefits are determined by (1) projecting the policy

value, taking into account future premiums, if any, and using all

guarantees of interest, mortality, expense deductions, etc., contained in the

policy or declared by the insurer; and (2) taking into account any benefits

guaranteed in the policy or by declaration which do not depend on the

policy value.



Allpresentvaluesshallbedeterminedusing(i)aninterestrate(orrates) 

specifiedby[theStandardNon‐forfeitureLawforLifeInsurance,as  

 amendedin1980]forpoliciesissuedinthesameyearand(ii)the

 mortalityratesspecifiedby[theStandardNon‐forfeitureLawforLife  

 Insurance,asamendedin1980]forpoliciesissuedinthesameyearor  

 containedinsuchothertableasmaybeapprovedby theCommissionerfor  

 thispurpose.



C. Minimum Paid-Up Nonforfeiture Benefits.



1. If a universal life insurance policy provides for the optional election of paid-up

nonforfeiture benefit, it shall be such that its present value shall be at least equal

to the cash surrender value provided for by the policy on the effective date of the

election. The present value shall be based on mortality and interest standards at

least as favorable to the policy owner as (1) in the case of a flexible premium

universal life insurance policy, the mortality and interest standards permitted for

paid-up nonforfeiture benefits by [the Standard Nonforfeiture Law for Life

Insurance, as amended in 1980]. In lieu of the paid-up nonforfeiture benefit, the

insurer may substitute, upon proper request not later than sixty 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.



Source: Miss. Code Ann. § 83-7-25 (Rev. 2011)



Rule 9.07: Mandatory Policy Provisions



The policy shall provide the following:



A. Periodic Disclosure to Policyowner.



Thepolicyshallprovidethatthepolicyownerwillbesent,withoutcharge,

atleastannually,areportwhichwillservetokeepsuchpolicyowner advised

astothestatusofthepolicy.Theendofthecurrentreportperiod must be

notmorethanthreemonthsprevious tothe

dateofthemailing of the

report.SpecificrequirementsofthisreportaredetailedinSection9.



B. Illustrative Reports.



Thepolicyshallprovideforanillustrativereportwhichwillbesenttothe  

 policyowneruponrequest.Minimumrequirements ofsuchreportarethe  

 sameasthosesetforthinSection8.Theinsurermaychargethepolicy  

 ownerareasonablefeeforprovidingthereport.



C. Policy Guarantees.



Thepolicyshallprovideguaranteesofminimuminterestcreditsand  

 maximummortalityandexpensecharges.Allvaluesanddatashownin the 

 policyshallbebasedonguarantees.Nofiguresbasedonnon‐guarantees  

 shallbeincludedinthepolicy.



D. Calculation of Cash Surrender Values.



Thepolicyshallcontainatleastageneraldescription ofthecalculationof  

 cashsurrendervaluesincludingthefoll owing information:



1. Theguaranteedmaximumexpensechargesandloads.



2. Anylimitationsonthecreditingofadditionalinterest.Interest

 creditsshallnotremainconditionalforaperiodlongerthan

 twenty

‐four(24)months.



3. Theguaranteedminimumrateorratesofinterest.



4. Theguaranteedmaximummortalitycharges.



5. Anyotherguaranteedcharges.



6. Anysurrenderorpartialwithdrawalcharges.



E. Changes in Basic Coverage.



If the policy owner has the right to change the basic coverage, any limitation on the

amount of timing of such change shall be stated in the policy. If the policy owner has the

right to increase the basic coverage, the policy shall state whether a new period of

contestability and/or suicide is applicable to the additional coverage.



F. Grace Period and Lapse.



The policy shall provide for written notice to be sent to the policy owner’s last known

address at least thirty days prior to termination of coverage.



A flexible premium policy shall provide for a grace period of at least thirty days after

lapse. Unless otherwise defined in the policy, lapse shall occur on that date on which the

net cash surrender value first equals zero.



G. Misstatement of Age or Sex.



If there is a misstatement of age or sex in the policy, the amount of the death benefit shall

be that which would be purchased by the most recent mortality charge at the correct age

or sex. The Commissioner may approve other methods which are deemed satisfactory

and not in conflict with Section 83-7-15, Mississippi Code of 1972.



H. Maturity Date.



If a policy provides for a “maturity date,” “end date,” or similar date, then the policy shall

also contain a statement, in close proximity to that date, that it is possible that coverage

may not continue to the maturity date even if scheduled premiums are paid in a timely

manner, if such is the case.



Source: Miss. Code Ann. §§ 83-5-1; 83-7-25 (Rev. 2011)



Rule 9.08: Disclosure Requirements



A. In connection with any advertising, solicitation, negotiation, or procurement of a

universal life insurance policy:



1.Anystatementofpolicycostfactorsorbenefitsshallcontain:



 a.Thecorrespondingguaranteedpolicycostfactorsorbenefits,clearlyidentified.



 b.Astatementexplainingthenonguaranteednatureofanycurrentinterestrates, 

 charges,orotherfeesappliedtothepolicy,includingtheinsurer’srightsto   

alter

anyofthesefactors.



 c.Anylimitationsonthecreditingofinterest,includingidentificationofthose   

portionsofthepolicytowhichaspecifiedinterestrateshallbecredited.



(Note:Policycostfactorsarethoseamountswhichaffectthepriceperthousandoflife insurance

coverageofotherbenefits.They

include:interest,mortality,expensecharges and fees, including any

surrenderorwithdrawalcharges,butnotpersistency assumptions.)



2. Anyillustrationofthepolicyvalue shallbeaccompaniedbythecorresponding 

 netcashsurrendervalue.



3. Anystatementregardingthecreditingofaspecificcurrentinterestrateshallalso 



containthefrequencyandtimingbywhichsuchrateisdetermined.



4. Ifanystatementreferstothepolicybeinginterest‐indexed,theindexshallbe 

 described.Inaddition,adescriptionshallbegivenofthefrequencyandtimingof 

 determiningtheinterestrateandofanyadjustmentsmade

totheindexin arriving 

 attheinterestratecreditedunderthepolicy.



5. Anyillustratedbenefitsbaseduponnonguarantee dinterest,mortality,orexpense 

 factorsshallbeaccompaniedbyastatementindicatingthatthesebenefitsarenot 

 guaranteed.



6. Iftheguaranteedcostfactorsorinitialpolicycostfactorassumptionswouldresult

 inpolicyvaluesbecomingexhaustedpriortothepoli cy’s maturitydate,suchfact 

 shallbedisclosed,includingnoticethatcoverage willterminateundersuch 

 circumstances.



Source: Miss. Code Ann. §§83-5-1; 83-7-25 (Rev. 2011)



Rule 9.09: Periodic Disclosure to Policy owner



A. Requirements.



Thepolicyshallprovidethatthepolicyownerwillbesent,withoutcharge,at   least

annually,areportwhichwillservetokeepsuchpolicyowneradvisedofthe   status

ofthepolicy.Theendofthecurrentreportperiodshallbenotmorethan   three

monthsprevioustothe

dateofthemailingofthereport.



Suchreportshallincludethefollowing:



1. The beginning and end of the current report period.



2. The policy value at the end of the previous report period and at the end of the

current report period.



3. The total amounts which have been credited or debited to the policy value during

the current report period, identifying each by type (e.g., interest, mortality,

expense and riders).



4. The current death benefit at the end of the current report period on each life

covered by the policy.

5. The net cash surrender value of the policy as of the end of the current report

period.

6. The amount of outstanding loans, if any, as of the end of the current report period.

7. For fixed premium policies:

If, assuming guaranteed interest, mortality and expense loads and continued

scheduled premium payments, the policy’s net cash surrender value is such that

it would not maintain insurance in force until the end of the next reporting

period, a notice to this effect shall be included in the report.

8. For flexible premium policies:

If, assuming guaranteed interest, mortality and expense loads, the policy’s net

cash surrender value will not maintain insurance in force until the end of the

next reporting period unless further premium payments are made, a notice to

this effect shall be included in the report.



Source: Miss. Code Ann. §§ 83-5-1; 83-7-25 (Rev. 2011)



Rule 9.10: Interest-Indexed Universal Life Insurance Policies



A. Initial Filing Requirements.



Thefollowinginformationshallbesubmittedinconnectionwith anyfilingof 

 interest‐indexeduniversallifeinsurancepolicies(“interest‐indexedpolicies”).All

 suchinformationreceivedshallbetreatedconfidentiallytotheextentpermitted 

 bylaw.



1. A description of how the interest credits are determined, including:



a. a description of the index.

b. the relationship between the value of the index and the actual interest rate to

be credited.

c. the frequency and timing of determining the interest rate.

d. the allocation of interest credits, if more than one rate of interest applies to

different portions of the policy value.

2. The insurer’s investment policy, which includes a description of the following:

a. how the insurer addressed the reinvestment risks.

b. how the insurer plans to address the risk of capital loss on cash outflows

c. how the insurer plans to address the risk that appropriate investments

may not be available or not available in sufficient quantities.

d. how the insurer plans to address the risk that the indexed interest rate

may fall below the minimum contractual interest rate guaranteed in the

policy.

e. the amount and type of assets currently held for interest-indexed

policies.

f. the amount and type of assets expected to be acquired in the future.

3. If policies are linked to an index for a specified period less than to the maturity

date of the policy, a description of the method used (or currently contemplated) to

determine interest credits upon the expiration of such period.

4. A description of any interest guarantee in addition to or in lieu of the index.

5. A description of any maximum premium limitations and the conditions under

which they apply.

B. Additional Filing Requirements.

1. Annually, every insurer shall submit a Statement of Actuarial Opinion by the

insurer’s actuary similar to the example contained in subsection C of this Section.

2. Annually, every insurer shall submit a description of the amount and type of

assets currently held by the insurer with respect to its interest-indexed policies.

3. Prior to implementation, every domestic insurer shall submit a description of any

material change in the insurer’s investment strategy or method of determining the

interest credits. A change is considered to be material if it would affect the form

or definition of the index (i.e., any change in the information supplied in Section 1

above) or if it would significantly change the amount or type of assets held for

interest-indexed policies.



C. Statement of Actuarial Opinion for Interest-Indexed Universal Life Insurance Policies.



I, _________________________________, am ______________________________________

(name)(positionorrelationshiptoInsurer)



___________________________________for the XYZ Life Insurance Company in the state of

(The insurer)



______________________________.

(State of Domicile of Insurer)



I am a member of the American Academy of Actuaries (or if not, state other qualifications to

sign annual statement actuarial opinions).



I have examined the interest-indexed universal life insurance policies of the Insurer in force

as of December 31, 19__, encompassing _________ number of policies and $_________ of

insurance in force.



I have considered the provisions of the policies. I have considered any reinsurance agreements

pertaining to such policies, the characteristics of the identified assets and the investment policy

adopted by the Insurer as they affect future insurance and investment cash flows under such tests

and calculations as I considered necessary to form an opinion concerning the insurance and

investment cash flows arising from the policies and related assets.

I relied on the investment policy of the Insurer and on projected investment cash flows as

provided by ____________________________, Chief Investment Officer of the Insurer.

The tests were conducted under various assumptions as to future interest rates, and particular

attention was given to those provisions and characteristics that might cause future insurance and

investment cash flows to vary with changes in the level of prevailing interest rates.

In my opinion, the anticipated insurance and investment cash flows referred to above make good

and sufficient provision for the contractual obligations of the Insurer under these insurance

policies.



________________________________

SignatureofActuary



Source: Miss. Code Ann. §§ 83-5-1; 83-7-23 (Rev. 2011)



Rule 9.11: Separability



If any provision of this rule or the application thereof to any person or circumstance is for any

reason held to be invalid, the remainder of the rule and the application of such provision to other

persons or circumstances shall not be affected thereby.



Source: Miss. Code Ann. § 83-5-1(Rev. 2011)



Rule 9.12: Effective Date



This regulation shall become effective thirty (30) days after its adoption and filing with the

Mississippi Secretary of State’s Office, as required by law.



PROMULGATED AND ADOPTED, this the 13th day of August, 1984.



Source: Miss. Code Ann. § 25-43-3.113 (Rev. 2011)



89102reg

Part 2 Chapter 10: (89-102) Regulation of Certain Payments with Respect to Credit Life and

Credit Disability Insurance.



Rule 10.01: Statutory Authority



This Regulation is promulgated by the Commissioner of Insurance pursuant to the authority

granted by Mississippi Code Annotated, Sections 83-53-29, 83-17-229 and in accordance with

the Mississippi Administrative Procedures Law. Section 83-53-29 grants the Commissioner

authority to “issue any rules and regulations that he deems necessary to effectuate the purposes

of this chapter (the credit insurance chapter of the Mississippi Code Annotated).” Section 83-17-

129 states that the “Commissioner is hereby authorized to establish such rules and regulations as

shall be necessary for the administration of this article (the article of the Mississippi Code

Annotated entitled “Regulation of Agents for Life, Health, or Accident Insurers”).” Section 83-

17-229 provides that “the employees or officers of a lending institution or holding company, or

the subsidiary or affiliate of a lending institution or holding company, may be licensed to sell

credit life, health and accident insurance on behalf of his employer in accordance with

regulations promulgated by the insurance commissioner.” This Regulation is promulgated by the

Commissioner pursuant to his full authority to regulate the payment of compensation to agents

and to others in connection with the sale of credit insurance as set out in the above statutes.



Source: Miss. Code Ann. § 83-53-29 (Rev. 2011)



Rule 10.02: Purpose



The Commissioner is aware of the decision of the Mississippi Supreme Court in Tew vs.

Dixieland Finance, Inc.,527 So. 2d 665 (Miss. 1988), in which the Court addressed certain issues

concerning the licensing of agents to write credit life and credit disability insurance and

payments made in connection with writing such insurance. The Court stated that it was delaying

the effect of its decision with respect to those issues until July 1, 1989, in order to provide the

executive and legislative branches of the government of the State of Mississippi with an

opportunity to take measures to resolve what the Court considered to be inconsistencies in the

statutes and regulations concerning the licensing of agents and payment of compensation with

respect to credit life and credit disability insurance. The purpose of this Regulation is to clarify

and regulate what persons or entities may receive compensation payments made in connection

with the issuance of credit life and credit disability insurance and/or the manner in which such

payments may be received by licensed agents, creditors, corporations or other persons or entities

involved in credit transactions.



Mississippi Code Annotated, Section 83-17-105 states that “no insurer or agent doing business in

this state shall pay, directly or indirectly, any commission or any other valuable consideration to

any person for services as an agent within this state unless such person shall hold a currently

valid license and certificate of authority to act as an agent, as required by the laws of this State

(emphasis added).” Mississippi Code Annotated, Section 83-17-7 contains a similar prohibition.

Mississippi Code Annotated, Section 83-17-101(a), however, states that “the possessor of an

insurable interest in any risk or subject of insurance shall not be deemed an agent by reason of

procuring or maintaining, or agreeing to procure or maintain, insurance extending to such

interests, together with the interest or interests of others in such risk or subject of insurance,

however the cost may be borne.” The Mississippi Legislature clearly contemplated that creditors

can receive compensation from the sale of credit insurance. Mississippi Code Annotated, Section

83-53-25 makes this fact clear. The Commissioner interprets these four sections together and has

determined that the prohibitions contained in Mississippi Code Annotated, Sections 83-17-7 and

83-17-105 do not apply in certain contexts involving credit insurance.



Many creditors offer credit insurance in connection with sale or lease transactions in which the

creditor to a purchaser or lessee of goods or in connection with transactions in which the creditor

makes a loan to a borrower. Credit life insurance is designed to “pay off the loan obligation if the

insured borrower or co-borrower dies. Credit disability insurance provides a monthly benefit

equal to the loan’s monthly payment if the primary borrower is disabled.” Fagg, Credit Life and

Disability Insurance, XIV (1986). These creditors are required by law to offer credit insurance

only through employees or other agents of the creditor licensed to write such insurance. By its

nature, credit insurance is designed to protect both the creditor and the borrower from the risk of

the borrower’s death or disability. The creditor’s interest in the transaction is that the extension

of credit be repaid. Therefore, the Commissioner finds that the creditor in a credit transaction is

the possessor of an insurable interest. The Commissioner further finds that the purchase and sale

of credit insurance in connection with such a credit transaction is designed to protect the

creditor’s insurable interest in the transaction as well as the insurable interest of the debtor in the

credit transaction. The Commissioner also finds that payments of compensation by a licensed

employee or other agent of a creditor in a credit transaction to the creditor are not payments

made in violation of Mississippi Code Annotated, Sections 83-17-7 and 83-17-105; such

payments are not made to the creditor for the creditor’s “service as an agent” since the creditor is

not acting as an agent when procuring or arranging to procure insurance to protect its own

insurable interest as provided by Mississippi Code Annotated, Section 83-17-101(a).



Many lending institutions and other entities covered by the Lending Institutions Act (Mississippi

Code Annotated, Section 83-17-227 through 83-17-233) offer credit insurance in connection

with loans and other credit transactions. Such an institution or entity is a creditor in a credit

transaction and the possessor of an insurable interest. As noted above, Mississippi Code

Annotated, Section 83-17-229 provides that “the employees or officers of a lending institution or

holding company, may be licensed to sell credit life, health and accident insurance for and on

behalf of his employer in accordance with regulations promulgated by the insurance

commissioner.” Pursuant to this regulatory authority, the Commissioner finds that the “for and

on behalf” language authorizes a lending institution or holding company, to receive

compensation in connection with the sale of credit insurance without being licensed to sell such

insurance, provided an officer or employee of the lending institution or holding company or a

subsidiary or affiliate of the lending institution or holding company is licensed to sell such

insurance. The Commissioner also finds that the prohibitions contained in Mississippi Code

Annotated, Sections 83-17-7 and 83-17-105 do not apply to such lending institutions, holding

companies, subsidiaries or affiliates meeting the above standard.



Source: Miss. Code Ann. § 83-53-29 (Rev. 2011)



Rule 10.03: Applicability and Scope



This Regulation shall apply to all insurers and agents licensed to sell credit life and credit

disability insurance and to the employers and affiliates of such agents acting as creditors,

including lending institutions and other entities covered by the Lending Institutions Act

(Mississippi Code Annotated, Sections 83-17-227 through 83-17-223), in credit transactions in

connection with which there is a sale or purchase of a policy or certificate of credit life or credit

disability insurance.



Source: Miss. Code Ann. § 83-53-29 (Rev. 2011)



Rule 10.04: Definitions



A. “Creditor” shall have the same meaning as defined in Mississippi Code Annotated,

Section 83-53-3(2)(d).



B. “Credit insurance” shall mean the credit life insurance as defined in Mississippi Code

Annotated, Section 83-53-3(2)(b) and credit disability insurance as defined in Mississippi

Code Annotated, Section 83-53-3(2)(c).

C. “Compensation” shall have the same meaning as defined in Mississippi Code Annotated,

Section 83-53-25(2) and (3).

D. “Insurer” shall have the same meaning as defined in Mississippi Code Annotated, Section

83-53-3(2)(g).

E. “Lending institution” shall have the same meaning as defined in Mississippi Code

Annotated, Section 83-17-227(a).

F. “Holding company” shall have the same meaning as defined in Mississippi Code

Annotated, Section 83-17-227(c).



Source: Miss. Code Ann. §§ 83-53-3 and 83-53-29 (Rev. 2011)



Rule 10.05: Regulation of Certain Payments in Connection with the Sale of Credit Life and

Credit Disability Insurance



Compensation paid in connection with the purchase or sale of credit insurance may be paid (i) by

an insurer to a person or other entity licensed as an agent to write credit insurance, (ii) by an

insurer to the creditor in the transaction in connection with which the credit insurance was

purchased or sold, or (iii) by an employee or other person or entity licensed to write credit

insurance to the creditor in the transaction in connection with which the credit insurance was

purchased or sold, or (iv) by an insurer or by an employee or other person or entity licensed to

write credit insurance to a lending institution or a holding company or the subsidiary or affiliate

of a lending institution or holding company. Nothing herein shall be construed as permitting the

total compensation paid in connection with the purchase or sale of credit insurance to exceed the

amount otherwise permitted by law. Nothing herein shall be construed as permitting the offer or

sale or issuance of a policy or certificate of credit insurance other than by an authorized insurer

or through an agent licensed to write credit insurance.



Source: Miss. Code Ann. § 83-53-29 (Rev. 2011)



Rule 10.06: Severability



If any provision of any section of this regulation or the application thereof to any circumstance

or person or entity is held invalid, such invalidity shall not affect any other provision of that

section or application of the regulation which can be given effect without the invalid provision or

application, and to this end the provision of this regulation are declared to be severable.



Source: Miss. Code Ann. § 83-53-29 (Rev. 2011)



Rule 10.07: Effective Date



This Regulation shall become effective July 1, 1989.



Source: Miss. Code Ann. § 25-43-3.113 (Rev. 2010)

