20-2607 Information to applicants

20-2607. Information to applicants

A. An insurer that delivers or issues for delivery in this state a variable life insurance policy shall deliver the following information to the applicant for the policy:

1. A summary explanation of the principal features of the policy. The summary explanation shall be in nontechnical terms and shall include a description of the manner in which the variable benefits will reflect the investment experience of the separate account and the factors that affect the variation. The explanation shall include notice of the requirements of section 20-2604, subsection D, paragraph 1, subdivision (e) and paragraph 7.

2. A statement of the investment policy of the separate account, including a description of both:

(a) The investment objectives of the separate account and the principal types of investments that will be made.

(b) The restrictions or limitations on the manner in which the operations of the separate account will be conducted.

3. A statement of the net investment return of the separate account for each of the last ten years, or if the separate account has been in existence for less than ten years, a statement of the net investment return of the separate account for each of the years that the separate account has been in existence.

4. A statement of the charges that were levied against the separate account during the previous year.

5. A summary of the method the insurer will use in valuing the assets that are held by the separate account.

6. A summary of the federal income tax aspects of the policy that apply to the insured, the policyholder and the beneficiary.

7. Illustrations of benefits that are payable under the variable life insurance contract. The insurer shall prepare the illustrations. The illustrations shall not include projections of past investment experience into the future or attempted predictions of future investment experience. This paragraph does not prohibit the use of hypothetical assumed rates of return to illustrate possible levels of benefits if the illustration makes it clear that the assumed rates are hypothetical only.

B. This section is satisfied if a disclosure that contains the information required by this section is delivered to the applicant. The disclosure shall either:

1. Be a prospectus that satisfies the requirements of the securities act of 1933 (15 United States Code sections 77a through 77aa) and that the securities and exchange commission declares effective.

2. Contain the information and reports that are required by the employee retirement income security act of 1974 (29 United States Code sections 1001 through 1461) if the policies are exempt from the registration requirements of the securities act of 1933.