HB 871 -- Life Insurance Illustrations

Sponsor:  Liese

This bill sets standards for life insurance policy
illustrations.  An "illustration" means a presentation or
depiction used in the marketing of a life insurance policy that
shows both guaranteed and non-guaranteed elements.  These
standards include:

(1)  Each life insurer must notify the Department of Insurance
whether a policy form is to be marketed with or without an
illustration;

(2)  Each illustration used in the marketing of a life insurance
policy must contain specific narrative and numeric information.
This information includes a description of the policy being
illustrated, premiums, death benefits, policy features, riders,
options, guaranteed elements, non-guaranteed elements, and
illustrated scales;

(3)  Each illustration used in the marketing of a life insurance
policy must be signed and dated by the applicant or policy
holder acknowledging the statement:  "I have received a copy of
this illustration and understand that any non-guaranteed
elements illustrated are subject to change and could be either
higher or lower.  The agent has told me they are not
guaranteed.";

(4)  Each life insurer using illustrations must provide each
policy owner with an annual report on the status of the policy;

(5)  Each life insurer using illustrations must appoint an
illustration actuary who will certify that the illustrated
scales used in the insurer-authorized illustrations meet the
requirements of this bill; and

(6)  A life insurer who violates a requirement in this bill will
be guilty of an unfair trade practice.

This bill does not apply to variable life insurance, individual
and group annuity contracts, credit life insurance, or life
insurance policies with no illustrated death benefits on any
individual exceeding $10,000.