Section 95.07 - Insurance Policy Requirements - Policy Benefit and DesignEvery variable life insurance policy delivered or issued for delivery in this state shall be subject to the following:
(1) The mortality and expense risks shall be borne by the insurer. The mortality and expense charges shall be subject to the maximums stated in the contract.(2) A policy may provide for general account preliminary term insurance. For any such policy, the premium rate for such preliminary term insurance shall be stated separately in the application or receipt.(3) For scheduled premiums policies, a minimum death benefit shall be provided in an amount at least equal to the initial face amount of the policy so long as premiums are duly paid and subject to all other policy provision requirements of 211 CMR 95.00. Other minimum death benefit patterns are permitted so long as it is proved that they are actuarially equivalent to that specified in the preceding sentence. Such demonstration shall be made in the actuarial memorandum required in 211 CMR 95.06(2).(4) The policy benefits shall reflect the investment experience of one or more separate accounts established and maintained by the insurer. The insurer shall demonstrate that the reflection of investment experience in the variable insurance policy is actuarially sound.(5) Each variable life insurance policy shall be credited with the full amount of the net investment return applied to the benefit base.(6) Notwithstanding the actual reserve basis used for policies that do not meet standard underwriting requirements, the benefit base for such policies may be the same as for corresponding policies which do meet standard underwriting requirements.(7) Any changes in variable death benefits of each variable life insurance policy shall be determined at least annually.(8) The cash value and cash surrender value of each variable life insurance policy shall be determined at least monthly. A summary of the method of computation of cash values and other nonforfeiture benefits shall be described in the policy; a complete statement of the method of computation shall be filed with the Commissioner. Such method shall be in accordance with the actuarial procedures that recognize the variable nature of the policy. The method of computation must be such that, if the net investment return credited to the policy at all times from the date of issue should be equal to the assumed investment rate with premiums and benefits determined accordingly under the terms of the policy, then the resulting cash values and other nonforfeiture benefits must be at least equal to the minimum values required by M.G.L. c. 175, § 144 for a general account policy with such premiums and benefits. The assumed investment rate shall not exceed the maximum interest rate permitted under M.G.L. c. 175, § 144. If the policy does not contain an assumed investment rate, the method of computation may be any other method approved by the Commissioner. The method of computation may disregard incidental minimum guarantees as to the dollar amounts payable. Incidental minimum guarantees include, but are not to be limited to, a guarantee that the amount payable at death or maturity shall be at least equal to the amount that otherwise would have been payable if the net investment return credited to the policy at all times from the date of issue had been equal to the assumed investment rate.(9) The computation of values required for each variable life insurance policy may be based upon such reasonable and necessary approximations as are acceptable to the Commissioner.