Section 1409.20  Applicability

This Part shall apply to all life insurance policies, with or without nonforfeiture values issued on or after January 1, 2000, subject to the following exceptions and conditions:

a)         Exceptions.

1)         This Part shall not apply to any individual life insurance policy issued on or after January 1, 2000 if the policy is issued in accordance with, and as a result of the exercise of, a reentry provision contained in the original life insurance policy or any individual life insurance policy of the same or greater face amount, issued before January 1, 2000 that guarantees the premium rates of the new policy.  This Part also shall not apply to subsequent policies issued as a result of the exercise of such a provision, or a derivation of the provision in the new policy.

2)         This Part shall not apply to any universal life policy that meets all the following requirements with regard to all secondary guarantee periods:

A)        Secondary guarantee period, if any, is 5 years or less;

B)        Specified premium for the secondary guarantee period is not less than the net level reserve premium for the secondary guarantee period based on the 1980 CSO valuation tables as defined in Section 1409.30 of this Part and the applicable valuation interest rate; and

C)        The initial surrender charge is not less than 100% of the first year annualized specified premium for the secondary guarantee period.

3)         This Part shall not apply to any variable life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts.

4)         This Part shall not apply to any variable universal life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts.

5)         This Part shall not apply to group life insurance certificates unless the certificates provide for a stated or implied schedule of maximum gross premiums required in order to continue coverage in force for a period in excess of one year.

b)         Conditions.

1)         Calculation of the minimum valuation standard for policies with guaranteed nonlevel premiums or guaranteed nonlevel benefits (other than universal life policies), or both, shall be in accordance with the provisions of Section 1409.50 of this Part.

2)         Calculation of the minimum valuation standard for flexible premium and fixed premium universal life insurance policies that contain provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period shall be in accordance with the provisions of Section 1409.60 of this Part.

(Source:  Amended at 28 Ill. Reg. 9262, effective July 1, 2004)