Sec. 38a-430. (Formerly Sec. 38-135a). Approval of form of life insurance and annuity policies. Optional health insurance riders. (a) No life insurance or annuity policy or contract shall be delivered or issued for delivery to any person in this state, nor shall any application, rider or endorsement be used in connection therewith, until a copy of the form thereof shall have been filed with and approved by the commissioner. The commissioner shall adopt regulations in accordance with the provisions of chapter 54, establishing a procedure for review of such policies. The commissioner shall issue an order disapproving the use of any such form at any time if it does not comply with the requirements of law, or if it contains a provision or provisions which are unfair or deceptive or which encourage misrepresentation of the policy. The commissioner shall specify the reason for his disapproval. The provisions of section 38a-19 shall apply to any such order issued by the commissioner.
(b) Nothing in this chapter shall preclude the issuance of a life insurance contract, including but not limited to a long-term care policy as provided in section 38a-458, which includes an optional health insurance rider, provided, the optional health insurance rider must be filed with and approved by the Insurance Commissioner pursuant to section 38a-481. Any company offering such policies for sale in this state shall be licensed to sell health insurance in this state pursuant to the provisions of section 38a-41.
(1967, P.A. 528; P.A. 88-326, S. 3; P.A. 96-51, S. 1.)
History: P.A. 88-326 required the commissioner to adopt regulations establishing a procedure for policy review and rephrased existing provisions; Sec. 38-135a transferred to Sec. 38a-430 in 1991; P.A. 96-51 added Subsec. (b) to permit optional health insurance riders.

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Sec. 38a-431. (Formerly Sec. 38-153). Group insurance. Any life insurance company may issue life or endowment insurance, with or without annuities, upon the group plan, as defined by the commissioner, with special rates of premiums less than the usual rates of premiums for such policies. All policies of group insurance shall be segregated by the company into a separate class and the mortality experience kept separate. The number of policies, amount of insurance, reserves, premiums and payments to policyholders thereunder, together with the mortality table and interest assumption adopted by the company, shall be reported separately in the company's annual financial statement.
(1949 Rev., S. 6143; 1951, S. 2828d; P.A. 78-312, S. 6.)
History: P.A. 78-312 deleted provision which had allowed companies to value policies "on such tables of mortality and interest assumptions as may be approved by the commissioner"; Sec. 38-153 transferred to Sec. 38a-431 in 1991.

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Sec. 38a-432. (Formerly Sec. 38-154). Annuities. Any domestic insurance company empowered to make contracts contingent upon life may grant and issue annuities either in connection with or separate from contracts of insurance predicated upon life risks.
(1949 Rev., S. 6144.)
History: Sec. 38-154 transferred to Sec. 38a-432 in 1991.
Annotation to former section 38-154:
Amount of benefit implies amount in dollars. 144 C. 346.

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Sec. 38a-433. (Formerly Sec. 38-154a). Life insurance or annuities payable in fixed or variable amounts. Accumulation of funds pursuant to funding agreements. (a) A domestic life insurance company, including for the purposes of this section all domestic fraternal benefit societies which operate on a legal reserve basis, may establish one or more separate accounts and may allocate thereto amounts, including without limitation proceeds applied under optional modes of settlement or under dividend options, to provide for life insurance or life or period-certain annuities, and benefits incidental thereto, payable in fixed or variable amounts or both, or to accumulate funds which are paid to or held by such company pursuant to section 38a-459, subject to the following: (i) The income, gains and losses, realized or unrealized, from assets allocated to a separate account shall be credited to or charged against the account, without regard to other income, gains or losses of the company; (ii) except as may be provided with respect to reserves for guaranteed benefits and funds referred to in subdivision (iii) hereof, amounts allocated to any separate account and accumulations thereon may be invested and reinvested in any class of loans and investments, and such loans and investments shall not be included in applying the limitations provided in sections 38a-102 to 38a-102h, inclusive; (iii) except with the approval of the commissioner and under such conditions as to investments and other matters as he may prescribe, which shall recognize the guaranteed nature of the benefits provided, reserves for (1) benefits guaranteed as to dollar amount and duration and (2) funds guaranteed as to principal amount or stated rate of interest shall not be maintained in a separate account; (iv) unless otherwise approved by the commissioner, assets allocated to a separate account shall be valued at their market value on the date of valuation, or if there is no readily available market, then as provided under the terms of the contract or the rules or other written agreement applicable to such separate account, provided, that unless otherwise approved by the commissioner, the portion, if any, of the assets of such separate account equal to the company's reserve liability with regard to the guaranteed benefits and funds referred to in subdivision (iii) hereof, shall be valued in accordance with the rules otherwise applicable to the company's assets; (v) amounts allocated to a separate account in the exercise of the power granted by this section shall be owned by the company, and the company shall not be, nor hold itself out to be, a trustee with respect to such amounts. If, and to the extent so provided under the applicable contracts, that portion of the assets of any such separate account equal to the reserves and other contract liabilities with respect to such account shall not be chargeable with liabilities arising out of any other business the company may conduct; (vi) no sale, exchange or other transfer of assets may be made by a company between any of its separate accounts or between any other investment account and one or more of its separate accounts unless, in case of a transfer into a separate account, such transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made, and unless such transfer, whether into or from a separate account, is made (1) by a transfer of cash, or (2) by a transfer of securities having a readily determinable market value, provided that such transfer of securities is approved by the commissioner. The commissioner may approve other transfers among such accounts if, in his opinion, such transfers would not be inequitable; (vii) to the extent such company deems it necessary to comply with any applicable federal or state laws, such company, with respect to any separate account, including without limitation any separate account which is a management investment account or a unit investment trust, may provide for persons having an interest therein appropriate voting and other rights and special procedures for the conduct or the business of such account, including without limitation special rights and procedures relating to investment policy, investment advisory services, selection of independent public accountants, and the selection of a committee, the members of which need not be otherwise affiliated with such company, to manage the business of such account. The provisions of this subsection shall apply notwithstanding any inconsistent provision in the charter of any such domestic life insurance company or in the general statutes.
(b) Any contract providing benefits payable in variable amounts delivered or issued for delivery in this state shall contain a statement of the essential features of the procedures to be followed by the insurance company in determining the dollar amount of such variable benefits. Any such contract under which the benefits vary to reflect investment experience, including a group contract and any certificate in evidence of variable benefits issued thereunder, shall state that such dollar amount will so vary and shall contain on its first page a statement to the effect that the benefits thereunder are on a variable basis.
(c) Except to the extent permitted under section 38a-459, no domestic, foreign or alien insurance company or fraternal benefit society shall deliver or issue for delivery in this state any such contracts or annuities until the Insurance Commissioner licenses it to do so. Such annuities or other contracts and the sale thereof, and such insurance companies, shall be subject to the exclusive regulatory authority of the Insurance Commissioner and shall not be subject to The Connecticut Securities Act.
(d) Except for sections 38a-78 and 38a-440 in the case of a variable annuity contract and section 38a-78 in the case of a variable life insurance policy and except as otherwise provided herein, all pertinent provisions of sections 38a-61, 38a-77, 38a-78, 38a-81, 38a-82, 38a-284, 38a-287, 38a-430 to 38a-454, inclusive, and 38a-458 and, with respect to fraternal benefit societies, sections 38a-595 to 38a-626, inclusive, 38a-631 to 38a- 640, inclusive, and 38a-800, shall apply to separate accounts and contracts relating thereto. The reserve liability for variable contracts shall be established in accordance with actuarial procedures that recognize the variable nature of the benefits provided and any mortality guarantees.
(e) The commissioner shall have power to enforce the provisions of this section, and may adopt, in accordance with the provisions of chapter 54, such regulations as he deems necessary for that purpose, covering, but not limited to, the form of life insurance or annuity contracts providing for benefits payable in fixed or variable amounts by domestic life insurance companies or domestic fraternal benefit societies operating on a legal reserve basis; separation of the assets of contract accounts; accounting of the income, gains and losses of contract accounts; distribution of the proceeds of accounts; sale, exchange or transfer of assets between accounts; guaranteed benefits; investment and reinvestment of contract or account assets, loans or investments; reserve liabilities; valuation of account assets; voting and other rights and special procedures affecting accounts, including investment policy, advisory services and the management, generally, of accounts.
(1967, P.A. 529, S. 1; 1971, P.A. 509; P.A. 75-25, S. 1, 2; P.A. 77-614, S. 163, 610; P.A. 78-312, S. 7; P.A. 80-482, S. 297, 348; P.A. 83-208, S. 2, 3; P.A. 93-239, S. 13; P.A. 96-227, S. 8.)
History: 1971 act rewrote provisions in greater detail, clearly distinguishing between insurance, annuities, etc. payable in fixed amounts and those paid in variable amounts; P.A. 75-25 added Subsec. (e); P.A. 77-614 placed insurance commissioner within the department of business regulation and made insurance department a division within that department, effective January 1, 1979; P.A. 78-312 expanded exception to limit applicability with respect to Secs. 38-130d and 38- 130e in Subsec. (d); P.A. 80-482 restored insurance commissioner and division to prior independent status and abolished the department of business regulation; P.A. 83-208 amended Subsec. (a) to specifically provide that a domestic life insurance company may provide life or period-certain annuities, or may accumulate funds pursuant to any funding agreement under Sec. 38-33a; Sec. 38-154a transferred to Sec. 38a-433 in 1991; in 1993 obsolete references to repealed Secs. 38a-94 to 38a-101, inclusive, and 38a-966 to 38a-970, inclusive, were deleted editorially from Subsec. (d); P.A. 93-239 made technical corrections for statutory consistency and substituted "sections 38a-102 to 38a-102h, inclusive" for "section 38a-95"; P.A. 96-227 amended Subsec. (c) to replace "other insurance company" with "foreign or alien insurance company or fraternal benefit society".

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Sec. 38a-434. (Formerly Sec. 38-155). Insurance against accident and disease. Any domestic insurance company empowered to make contracts contingent upon life may issue policies or certificates insuring persons against loss of life or personal injury resulting from any cause and against loss of time resulting from disease, which policies or certificates shall state on their face the agreement with the persons receiving the same, and, when executed in accordance with the charter and bylaws of such company, shall be binding upon the company.
(1949 Rev., S. 6145.)
History: Sec. 38-155 transferred to Sec. 38a-434 in 1991.

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Sec. 38a-435. (Formerly Sec. 38-147a). Regulations re replacement of or borrowing on life insurance products, policies or contracts. The Insurance Commissioner may make regulations governing the sale or offer of sale of life insurance products, including annuities, when such sale or offer involves the replacement of existing policies or contracts or the borrowing on or lapsing of such existing policies or contracts. Such regulations may prescribe (a) the form in which such offer or proposal should be made; (b) the form of notice to the insurance companies involved; (c) the questions to be contained in application forms for life insurance products pertaining to existing insurance; and (d) the form of notice to the purchaser. The commissioner may suspend or revoke the license of any insurance producer violating any such regulation.
(1963, P.A. 554; P.A. 77-614, S. 163, 610; P.A. 80-482, S. 296, 348; P.A. 94-39, S. 3; P.A. 96-193, S. 12, 36.)
History: P.A. 77-614 placed insurance commissioner within the department of business regulation and made insurance department a division within that department, effective January 1, 1979; P.A. 80-482 restored insurance commissioner and division to prior independent status and abolished the department of business regulation; Sec. 38-147a transferred to Sec. 38a-435 in 1991; P.A. 94-39 made references to life insurance products including annuities and added reference to "life insurance contracts"; P.A. 96-193 substituted "producer" for "agent or broker", effective June 3, 1996.

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Sec. 38a-436. (Formerly Sec. 38-157a). Notice of voidability of individual insurance contracts. Procedure. Time limit. Every individual life insurance policy delivered or issued for delivery to any person in this state shall have printed thereon or attached thereto a notice stating, in substance, that the policy may be returned by the applicant for cancellation by delivering or mailing the policy to the insurer or to the insurance agent through whom it was effected, at any time within ten days after receipt of the policy by the applicant, and that upon the delivery or mailing the policy shall be void ab initio.
(P.A. 75-546; P.A. 90-243, S. 62.)
History: P.A. 90-243 made technical changes for statutory consistency; Sec. 38-157a transferred to Sec. 38a-436 in 1991.

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Sec. 38a-437. (Formerly Sec. 38-158). Copy of application to be furnished. (a) Each person within this state holding a policy of insurance issued by a life insurance company doing business in this state shall be furnished by the company with a copy of the application upon which the policy was issued, upon demand made for such copy by the policyholder, or by any person upon whose life the policy was issued.
(b) If the company fails for thirty days from the time of the demand to furnish to the person making the demand a copy of the application, the company shall be forever barred from setting up, by way of defense to any suit on the policy of insurance, any error, incorrectness, fraud or misrepresentation of that person, or any mistake therein; and the application shall thereafter be taken and held, so far as the application may affect any claim under the policy, or any fund secured thereby, to be in all respects true and correct.
(1949 Rev., S. 6148; P.A. 90-243, S. 63.)
History: P.A. 90-243 divided the section into Subsecs. and made technical changes for statutory consistency; Sec. 38- 158 transferred to Sec. 38a-437 in 1991.

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Sec. 38a-438. (Formerly Sec. 38a-130b). Short title: Standard Nonforfeiture Law. Sections 38a-438 to 38a-440, inclusive, shall be known as the "Standard Nonforfeiture Law".
(P.A. 78-312, S. 1 P.A. 91-175, S. 3.)
History: Sec. 38-130b transferred to Sec. 38a-438 in 1991; P.A. 91-175 deleted the reference to the Standard Valuation Law.
See Secs. 38a-77 and 38a-78 re Standard Valuation Law.

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Sec. 38a-439. (Formerly Sec. 38-130c). Minimum nonforfeiture benefits for life insurance policyholders who default in premium payments. Cash surrender value. (a) In the case of policies issued on and after the effective date specified in accordance with the provisions of subsection (g) of section 38-130c of the general statutes, revision of 1958, revised to 1981, no policy of life insurance, except as stated in subsection (i) of this section, shall be delivered or issued for delivery in this state unless it contains in substance the following provisions, or corresponding provisions which in the opinion of the commissioner are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements hereinafter specified and are substantially in compliance with subsection (h) of this section: (1) A statement that, in the event of default in any premium payment, the company will grant, upon request by the policyholder made in accordance with the policy not later than sixty days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of the due date, of such amount as may be hereinafter specified. In lieu of the stipulated paid-up nonforfeiture benefit, the company may substitute, upon request by the policyholder made in accordance with the policy 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; (2) a statement that, upon surrender of the policy within sixty days after the due date of any premium payment in default after premiums have been paid for at least three full years in the case of ordinary insurance or five full years in the case of industrial insurance, the company will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as may be hereinafter specified; (3) a statement that a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than sixty days after the due date of the premium in default; (4) a statement that, if the policy shall have become paid-up by completion of all premium payments or if it is continued under any paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance or the fifth policy anniversary in the case of industrial insurance, the company will pay, upon surrender of the policy within thirty days after any policy anniversary, a cash surrender value of such amount as may be hereinafter specified; (5) in the case of policies which, on a basis guaranteed in the policy, provide for unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate, and method used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy; in the case of all other policies, a statement of the mortality table and interest rate used in calculating the cash surrender values and the mortality table and interest rate used in calculating the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary either during the first twenty policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the company on the policy; (6) a statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to the insurance law of the state in which the policy is delivered; an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the company on the policy; if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated therein, a statement that such method of computation has been filed with the supervisory official of the state in which the policy is delivered; and a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which such values and benefits are consecutively shown in the policy. Any of the foregoing provisions or portions thereof not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy. The company shall reserve the right to defer the payment of any cash surrender value for a period of six months after demand therefor with surrender of the policy.
(b) Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary, whether or not required by subsection (a) of this section, shall be an amount not less than the excess, if any, of the present value, on such anniversary, of the future guaranteed benefits which would have been provided for by the policy, including any existing paid-up additions, if there had been no default, over the sum of: (1) The then present value of the adjusted premiums as defined in subsections (d) and (e) of this section, corresponding to premiums which would have become due on and after such anniversary, and (2) the amount of any indebtedness to the company on the policy; provided that for any policy issued on or after the compliance date established by subdivision (11) of subsection (e) of this section, which provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value shall be an amount not less than the sum of such value for an otherwise similar policy issued at the same age without such rider or supplemental policy provision and for a policy which provides only the benefits otherwise provided by such rider or supplemental policy provision; provided, further, that for any family policy issued on or after the compliance date established by subdivision (11) of subsection (e) of this section, which defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse attains the age of seventy- one, the cash surrender value shall be an amount not less than the sum of such value for an otherwise similar policy issued at the same age without such term insurance on the life of the spouse and for a policy which provides only the benefits otherwise provided by such term insurance on the life of the spouse. Any cash surrender value available within thirty days after any policy anniversary under any policy paid-up by completion of all premium payments or any policy continued under any paid-up nonforfeiture benefit, whether or not required by subsection (a) of this section, shall be an amount not less than the present value, on such anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the company on the policy.
(c) Any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due on any policy anniversary shall be such that its present value as of such anniversary shall be at least equal to the cash surrender value then provided for by the policy or, if none is provided for, that cash surrender value which would have been required by this section in the absence of the condition that premiums shall have been paid for at least a specified period.
(d) (1) Except as provided in subdivision (3) of this subsection, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding any extra premiums charged because of impairments or special hazards, that the present value, at the date of issue of the policy, of all such adjusted premiums shall be equal to the sum of: (A) The then present value of the future guaranteed benefits provided for by the policy; (B) two per cent of the amount of insurance, if the insurance be uniform in amount, or of the equivalent uniform amount, as hereinafter defined, if the amount of insurance varies with duration of the policy; (C) forty per cent of the adjusted premium for the first policy year; (D) twenty-five per cent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less. In applying the percentages specified in subparagraphs (C) and (D) above, no adjusted premium shall be deemed to exceed four per cent of the amount of insurance or uniform amount equivalent thereto. The date of issue of a policy for the purpose of this subsection shall be the date on which the rated age of the insured is determined; (2) in the case of a policy providing an amount of insurance varying with duration of the policy, the equivalent uniform amount thereof for the purpose of this subsection shall be deemed to be the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the date of issue as the benefits under the policy, provided in the case of a policy providing a varying amount of insurance issued on the life of a child under age ten, the equivalent uniform amount may be computed as though the amount of insurance provided by the policy prior to the attainment of age ten was the amount provided by such policy at age ten; (3) the adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provision shall be equal to: (A) The adjusted premiums for an otherwise similar policy issued at the same age without such term insurance benefits, increased, during the period for which premiums for such term insurance benefits are payable, by (B) the adjusted premiums for such term insurance, the foregoing items (A) and (B) being calculated separately and as specified in subdivisions (1) and (2) of this subsection except that, for the purposes of subparagraphs (B), (C) and (D) of subdivision (1) of this subsection, the amount of insurance or equivalent uniform amount of insurance used in the calculation of the adjusted premiums referred to in subparagraph (B) of this subdivision shall be equal to the excess of the corresponding amount determined for the entire policy over the amount used in the calculation of the adjusted premiums in subparagraph (A) of this subdivision; (4) in the case of ordinary policies, all adjusted premiums and present values referred to in this section shall be calculated on the bases of the Commissioners' 1958 Standard Ordinary Mortality Table and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits provided such rate of interest shall not exceed five and one-half per cent per annum and provided, for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than six years younger than the actual age of the insured; provided in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners' 1958 Extended Term Insurance Table; and provided further, for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the commissioner; (5) in the case of industrial policies, all adjusted premiums and present values referred to in this section shall be calculated on the basis of the Commissioners' 1961 Standard Industrial Mortality Table and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits provided such rate of interest shall not exceed five and one-half per cent per annum; provided, in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners' 1961 Industrial Extended Term Insurance Table; and provided further, for insurance issued on a substandard basis, the calculations of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the commissioner; and (6) the provisions of this subsection shall not apply to any policy issued on or after the compliance date applicable to the issuing company as determined by subdivision (11) of subsection (e) of this section.
(e) The provisions of this subsection shall apply to all policies issued on or after the compliance date established by subdivision (11) of this subsection. (1) Except as provided in subdivision (7) of this subsection, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of: (A) The then present value of the future guaranteed benefits provided for by the policy; (B) one per cent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years; and (C) one hundred twenty-five per cent of the nonforfeiture net level premium as hereinafter defined, provided that in applying the percentage specified in subparagraph (C), no nonforfeiture net level premium shall be deemed to exceed four per cent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years. The date of issue of a policy for the purpose of this subsection shall be the date as of which the rated age of the insured is determined; (2) the nonforfeiture net level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits divided by the present value, at such date of issue, of an annuity of one per annum payable on the date of issue of the policy and on each anniversary of such policy on which a premium becomes due; (3) in the case of policies which, on a basis guaranteed in the policy, provide for unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of any such change in the benefits or premiums the future adjusted premiums, nonforfeiture net level premiums and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change; (4) except as otherwise provided in subdivision (7) of this subsection, the recalculated future adjusted premiums for any such policy shall be the uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all such future adjusted premiums shall be equal to the excess of (A) the sum of: (i) The then present value of the future guaranteed benefits provided for by the policy and (ii) the additional expense allowance, if any, over (B) the then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy; (5) the additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of (A) one per cent of the excess, if positive, of the average amount of insurance at the beginning of each of the first ten policy years subsequent to the change over the average amount of insurance prior to the change at the beginning of each of the first ten policy years subsequent to the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and (B) one hundred twenty-five per cent of the increase, if positive, in the nonforfeiture net level premium; (6) the recalculated nonforfeiture net level premium shall be equal to the amount obtained by dividing (A) by (B) where (A) equals the sum of (i) the nonforfeiture net level premium applicable prior to the change, multiplied by the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium would have become due had the change not occurred, and (ii) the present value of the increase in future guaranteed benefits provided for by the policy, and (B) equals the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium becomes due; (7) notwithstanding any other provisions of this subsection, in the case of a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, such policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, adjusted premiums and present values for such substandard policy may be calculated as if it were issued to provide such higher uniform amounts of insurance on the standard basis; (8) all adjusted premiums and present values referred to in this section shall be calculated: (A) For all policies of ordinary insurance, on the basis of the Commissioners' 1980 Standard Ordinary Mortality Table or at the election of the company, for any one or more specified plans of life insurance, on the basis of the Commissioners' 1980 Standard Ordinary Mortality Table with ten-year select mortality factors; (B) for all policies of industrial insurance, on the basis of the Commissioners' 1961 Standard Industrial Mortality Table; (C) for all policies issued in a particular calendar year, on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this subsection, for policies issued in that calendar year, provided, that: (i) At the option of the company, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this subsection, for policies issued in the immediately preceding calendar year; (ii) under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by subsection (a) of this section, shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of such paid- up nonforfeiture benefit and paid-up dividend additions, if any; (iii) a company may calculate the amount of any guaranteed paid-up nonforfeiture benefit including any paid-up additions under the policy on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values; (iv) in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners' 1980 Extended Term Insurance Table for policies of ordinary insurance and not more than the Commissioners' 1961 Industrial Extended Term Insurance Table for policies of industrial insurance; (v) for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on appropriate modifications of the aforementioned tables; (vi) any ordinary mortality tables, adopted after 1980 by the National Association of Insurance Commissioners that are approved by regulations adopted by the commissioner in accordance with the provisions of chapter 54 for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners' 1980 Standard Ordinary Mortality Table with or without ten-year select mortality factors or the Commissioners' 1980 Extended Term Insurance Table; (vii) any industrial mortality tables, adopted after 1980 by the National Association of Insurance Commissioners that are approved by regulations adopted in accordance with the provisions of chapter 54 by the commissioner for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners' 1961 Standard Industrial Mortality Table or the Commissioners' 1961 Industrial Extended Term Insurance Table; (9) the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be equal to one hundred twenty- five per cent of the calendar year statutory valuation interest rate for such policy as defined in the standard valuation law, rounded to the nearest one quarter of one per cent; (10) notwithstanding any provision of the general statutes to the contrary, any refiling of nonforfeiture values or their methods of computation for any previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provisions of that policy form; (11) on or after October 1, 1981, but prior to January 1, 1989, any company may file with the commissioner a written notice of its election to comply with the provisions of this subsection on or after a specified date and the provisions of this subsection shall apply to such company on or after such specified date. The provisions of this subsection shall apply to policies issued by any company on or after January 1, 1989.
(f) In the case of any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurance company based on then estimates of future experience, or in the case of any plan of life insurance which is of such nature that minimum values cannot be determined by the methods described in subsections (a) to (e), inclusive, then: (1) The commissioner must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insureds as are the minimum benefits otherwise required by subsections (a) to (e), inclusive; (2) the commissioner must be satisfied that the benefits and the pattern of premiums of that plan are not such as to mislead prospective policyholders or insureds; (3) the cash surrender values and paid-up nonforfeiture benefits provided by such plan must not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this section, as determined by regulations adopted by the commissioner in accordance with the provisions of chapter 54.
(g) Any cash surrender value and any paid-up nonforfeiture benefit, available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary, shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in subsections (b), (c), (d), and (e) of this section may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall be not less than the amounts used to provide such additions. Notwithstanding the provisions of subsection (b) of this section, additional benefits payable: (1) In the event of death or dismemberment by accident or accidental means; (2) in the event of total and permanent disability; (3) as reversionary annuity or deferred reversionary annuity benefits; (4) as term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this section would not apply; (5) as term insurance on the life of a child or on the lives of children provided in a policy on the life of a parent of the child, if such term insurance expires before the child's age is twenty-six, is uniform in amount after the child's age is one, and has not become paid-up by reason of the death of a parent of the child; and (6) as other policy benefits additional to life insurance and endowment benefits, and premiums for all such additional benefits, shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this section and no such additional benefits shall be required to be included in any paid-up nonforfeiture benefits.
(h) This subsection shall apply to all policies issued on or after January 1, 1985. Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary shall be in an amount which does not differ by more than two-tenths of one per cent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years, from the sum of the greater of zero and the basic cash value hereinafter specified and the present value of any existing paid-up additions less the amount of any indebtedness to the company under the policy. The basic cash value shall be equal to the present value, on such anniversary, of the future guaranteed benefits which would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the company, if there had been no default, less the then present value of the nonforfeiture factors, as hereinafter defined, corresponding to premiums which would have become due on and after such anniversary; provided, that the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in subsection (b) or (d) of this section, whichever is applicable, shall be the same as are the effects specified in subsection (b) or (d) of this section, whichever is applicable, on the cash surrender values defined in the applicable subsection. The nonforfeiture factor for each policy year shall be an amount equal to a percentage of the adjusted premium for the policy year, as defined in subsection (e) of this section. Except as is required by this subsection, such percentage shall be the same percentage for each policy year between the second policy anniversary and the later of (1) the fifth policy anniversary and (2) the first policy anniversary at which there is available under the policy, a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least two-tenths of one per cent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years; and shall be such that no percentage after the later of the two policy anniversaries specified in this subsection may apply to fewer than five consecutive policy years; provided, that no basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, as defined in subsection (d) or (e) of this section, whichever is applicable, were substituted for the nonforfeiture factors in the calculation of the basic cash value. All adjusted premiums and present values referred to in this subsection shall, for a particular policy, be calculated on the same mortality and interest bases as are used in demonstrating the policy's compliance with the subsections of this section. The cash surrender values referred to in this subsection shall include any endowment benefits provided for by the policy. Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment shall be determined in a manner consistent with those specified for determining the analogous minimum amounts in subsections (a), (b), (c), (e) and (g) of this section. The amount of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those enumerated in subdivisions (1) to (6), inclusive, of subsection (g) of this section, shall conform with the principles of this subsection.
(i) This section shall not apply to any reinsurance, group insurance, pure endowment, annuity or reversionary annuity contract, or to any term policy of uniform amount which provides for no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of twenty years or less expiring before age seventy-one, for which uniform premiums are payable during the entire term of the policy, or to any term policy of decreasing amount, which provides for no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium, calculated as specified in subsections (d) and (e) of this section, is less than the adjusted premium so calculated, on a term policy of uniform amount, or renewal thereof, which provides for no guaranteed nonforfeiture or endowment benefits issued at the same age and for the same initial amount of insurance and for a term of twenty years or less expiring before age seventy-one, for which uniform premiums are payable during the entire term of the policy, or to any policy, which provides no guaranteed nonforfeiture or endowment benefits, for which no cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the beginning of any policy year, calculated as specified in subsections (b), (c), (d) and (e) of this section, exceeds two and one-half per cent of the amount of insurance at the beginning of the same policy year or to any policy which shall be delivered outside this state through an agent or other representative of the company issuing the policy. For purposes of determining the applicability of this section, the age at expiration for a joint term life insurance policy shall be the age at expiration of the oldest life.
(j) The provisions of sections 38a-77 and 38a-433 shall apply to ordinary and industrial policies issued by a company before the date of its election to comply with section 38a-130c of the general statutes, revision of 1958, revised to 1981, or January 1, 1981, whichever occurred first. The provisions of section 38-130c of the general statutes, revision of 1958, revised to 1981, shall apply to policies issued by a company on and after the date of such election or on and after January 1, 1981, whichever occurred first, and before October 1, 1981.
(P.A. 78-312, S. 2; P.A. 81-170, S. 1; P.A. 90-243, S. 55.)
History: P.A. 81-170 permitted a life insurance company to substitute an actuarially equivalent alternative nonforfeiture benefit upon request of a defaulting policyholder, provided that certain life insurance policies shall contain a statement of the mortality table, interest rate and method used in determining cash surrender values and nonforfeiture benefits, established a new formula for calculating cash surrender values and specified the interest rate and mortality tables used in calculating adjusted premiums and present value for various policies; P.A. 90-243 made technical changes in Subsec. (a); Sec. 38- 130c transferred to Sec. 38a-439 in 1991.
See Secs. 38a-77 and 38a-78 re Standard Valuation Law.

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Sec. 38a-440. (Formerly Sec. 38-130d). Minimum nonforfeiture benefits for annuity contract holders upon cessation of payment of considerations under a contract. (a) This section shall not apply to any reinsurance, group annuity purchased under a retirement plan or plan of deferred compensation established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408 of the Internal Revenue Code, as now or hereafter amended, premium deposit fund, variable annuity, investment annuity, immediate annuity, any deferred annuity contract after annuity payments have commenced, or reversionary annuity, nor to any contract which shall be delivered outside this state through an agent or other representative of the company issuing the contract.
(b) In the case of contracts issued on or after the effective date specified in accordance with the provisions of subsection (k) of this section, no contract of annuity, except as stated in subsection (a) of this section, shall be delivered or issued for delivery in this state unless it contains in substance the following provisions, or corresponding provisions which in the opinion of the commissioner are at least as favorable to the contractholder, upon cessation of payment of considerations under the contract: (1) That upon cessation of payment of considerations under a contract, the company will grant a paid-up annuity benefit on a plan stipulated in the contract of such value as is specified in subsections (d), (e), (f), (g) and (i) of this section; (2) if a contract provides for a lump sum settlement at maturity, or at any other time, that upon surrender of the contract at or prior to the commencement of any annuity payments, the company will pay in lieu of any paid-up annuity benefit a cash surrender benefit of such amount as is specified in subsections (d), (e), (g) and (i) of this section. The company shall reserve the right to defer the payment of such cash surrender benefit for a period of six months after demand therefor with surrender of the contract; (3) a statement of the mortality table, if any, and interest rates used in calculating any minimum paid-up annuity, cash surrender or death benefits that are guaranteed under the contract, together with sufficient information to determine the amounts of such benefits; and (4) a statement that any paid-up annuity, cash surrender or death benefits which may be available under the contract are not less than the minimum benefits required by the statutes of the state in which the contract is delivered and an explanation of the manner in which such benefits are altered by the existence of any additional amounts credited by the company to the contract, any indebtedness to the company on the contract or any prior withdrawals from or partial surrenders of the contract. Notwithstanding the requirements of this subsection, any deferred annuity contract may provide that if no considerations have been received under a contract for a period of two full years and the portion of the paid-up annuity benefit at maturity on the plan stipulated in the contract arising from considerations paid prior to such period would be less than twenty dollars monthly, the company may at its option terminate such contract by payment in cash of the then present value of such portion of the paid-up annuity benefit, calculated on the basis of the mortality table, if any, and interest rate specified in the contract for determining the paid-up annuity benefit, and by such payment shall be relieved of any further obligation under such contract.
(c) The minimum values as specified in subsections (d), (e), (f), (g) and (i) of this section of any paid-up annuity, cash surrender or death benefits available under an annuity contract shall be based upon minimum nonforfeiture amounts as defined in this subsection: (1) With respect to contracts providing for flexible considerations, the minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be equal to an accumulation up to such time at a rate of interest of three per cent per annum of percentages of the net considerations, as hereinafter defined, paid prior to such time, decreased by the sum of (A) any prior withdrawals from or partial surrenders of the contract accumulated at a rate of interest of three per cent per annum, and (B) the amount of any indebtedness to the company on the contract, including interest due and accrued; and increased by any existing additional amounts credited by the company to the contract. The net considerations for a given contract year used to define the minimum nonforfeiture amount shall be an amount not less than zero and shall be equal to the corresponding gross considerations credited to the contract during that contract year less an annual contract charge of thirty dollars and less a collection charge of one dollar and twenty-five cents per consideration credited to the contract during that contract year. The percentages of net considerations shall be sixty-five per cent of the net consideration for the first contract year and eighty-seven and one-half per cent of the net considerations for the second and later contract years, except the percentage shall be sixty-five per cent of the portion of the total net consideration for any renewal contract year which exceeds by not more than two times the sum of those portions of the net considerations in all prior contract years for which the percentage was sixty-five per cent; (2) with respect to contracts providing for fixed scheduled considerations, minimum nonforfeiture amounts shall be calculated on the assumption that considerations are paid annually in advance and shall be defined as for contracts with flexible considerations which are paid annually with two exceptions: (A) The portion of the net consideration for the first contract year to be accumulated shall be the sum of sixty-five per cent of the net consideration for the first contract year plus twenty-two and one-half per cent of the excess of the net consideration for the first contract year over the lesser of the net considerations for the second and third contract years; (B) the annual contract charge shall be the lesser of (i) thirty dollars or (ii) ten per cent of the gross annual consideration. (3) With respect to contracts providing for a single consideration, minimum nonforfeiture amounts shall be defined as for contracts with flexible considerations except that the percentage of net consideration used to determine the minimum nonforfeiture amount shall be equal to ninety per cent and the net consideration shall be the gross consideration less a contract charge of seventy-five dollars.
(d) Any paid-up annuity benefit available under a contract shall be such that its present value on the date annuity payments are to commence is at least equal to the minimum nonforfeiture amount on that date. Such present value shall be computed using the mortality table, if any, and the interest rate specified in the contract for determining the minimum paid-up annuity benefits guaranteed in the contract.
(e) For contracts which provide cash surrender benefits, such cash surrender benefits available prior to maturity shall not be less than the present value as of the date of surrender of that portion of the maturity value of the paid-up annuity benefit which would be provided under the contract at maturity arising from considerations paid prior to the time of cash surrender reduced by the amount appropriate to reflect any prior withdrawals from or partial surrenders of the contract, such present value being calculated on the basis of an interest rate not more than one per cent higher than the interest rate specified in the contract for accumulating the net considerations to determine such maturity value, decreased by the amount of any indebtedness to the company on the contract, including interest due and accrued, and increased by any existing additional amounts credited by the company to the contract. In no event shall any cash surrender benefit be less than the minimum nonforfeiture amount at that time. The death benefit under such contracts shall be at least equal to the cash surrender benefit.
(f) For contracts which do not provide cash surrender benefits, the present value of any paid-up annuity benefit available as a nonforfeiture option at any time prior to maturity shall not be less than the present value of that portion of the maturity value of the paid-up annuity benefit, provided under the contract arising from consideration paid prior to the time the contract is surrendered in exchange for, or changed to, a deferred paid-up annuity, such present value being calculated for the period prior to the maturity date on the basis of the interest rate specified in the contract for accumulating the net considerations to determine such maturity value, and increased by any existing additional amounts credited by the company to the contract. For contracts which do not provide any death benefits prior to the commencement of any annuity payments, such present values shall be calculated on the basis of such interest rate and the mortality table specified in the contract for determining the maturity value of the paid-up annuity benefit. In no event shall the present value of a paid-up annuity benefit be less than the minimum nonforfeiture amount at that time.
(g) For the purpose of determining the benefits calculated under subsections (e) and (f) of this section, in the case of annuity contracts under which an election may be made to have annuity payments commence at optional maturity dates, the maturity date shall be deemed to be the latest date for which election shall be permitted by the contract, but shall not be deemed to be later than the anniversary of the contract next following the annuitant's seventieth birthday or the tenth anniversary of the contract, whichever is later.
(h) Any contract which does not provide cash surrender benefits or does not provide death benefits at least equal to the minimum nonforfeiture amount prior to the commencement of any annuity payments shall include a statement in a prominent place in the contract that such benefits are not provided.
(i) Any paid-up annuity, cash surrender or death benefits available at any time, other than on the contract anniversary under any contract with fixed scheduled considerations, shall be calculated with allowance for the lapse of time and the payment of any scheduled considerations beyond the beginning of the contract year in which cessation of payment of considerations under the contract occurs.
(j) For any contract which provides, within the same contract by rider or supplemental contract provision, both annuity benefits and life insurance benefits that are in excess of the greater of cash surrender benefits or a return of the gross considerations with interest, the minimum nonforfeiture benefits shall be equal to the sum of the minimum nonforfeiture benefits for the annuity portion and the minimum nonforfeiture benefits, if any, for the life insurance portion computed as if each portion were a separate contract. Notwithstanding the provisions of subsections (d), (e), (f), (g) and (i) of this section, additional benefits payable (1) in the event of total and permanent disability, (2) as reversionary annuity or deferred reversionary annuity benefits, or (3) as other policy benefits additional to life insurance, endowment and annuity benefits, and considerations for all such additional benefits, shall be disregarded in ascertaining the minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits that may be required by this section. The inclusion of such additional benefits shall not be required in any paid-up benefits, unless such additional benefits separately would require minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits.
(k) On or after October 1, 1978, but prior to January 1, 1981, any company may file with the commissioner a written notice of its election to comply with the provisions of this section after a specified date and the provisions of this section shall apply to annuity contracts issued by such company on or after such specified date. On or after January 1, 1981, the provisions of this section shall apply to annuity contracts issued by any company.
(P.A. 78-312, S. 3.)
History: Sec. 38-130d transferred to Sec. 38a-440 in 1991.
See Secs. 38a-77 and 38a-78 re Standard Valuation Law.

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Sec. 38a-441. (Formerly Sec. 38-159c). Notice to insured when life insurance policy paid up. Any insurance company doing the business of life insurance in this state which writes an individual life insurance policy delivered or issued for delivery in this state shall provide notice when such policy is fully paid up. Such notice shall be in writing and shall be sent or delivered by the insurer to the owner of the policy at the last-known address of the owner during the year in which the date such final payment is received by the insurer occurs, or within thirty-one days of such date if later. Each five years thereafter, written notice shall be so sent or delivered to the owner of the policy providing notice of the current status of such policy. The provisions of this section shall not apply to the purchase of a single premium life insurance policy, a universal life insurance policy, or to the purchase of paid-up additions under a participating life insurance policy.
(P.A. 87-164.)
History: Sec. 38-159c transferred to Sec. 38a-441 in 1991.

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Sec. 38a-442. (Formerly Sec. 38-156). Dating back of policies prohibited. No policy of life insurance shall be issued or delivered in this state if it purports to be issued or to take effect as of a date more than six months before the application for the insurance was made if thereby the applicant would rate at an age younger than at the date when the application was made according to his age at nearest birthday.
(1949 Rev., S. 6146; 1951, S. 2829d.)
History: Sec. 38-156 transferred to Sec. 38a-442 in 1991.

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Sec. 38a-443. (Formerly Sec. 38-147). Premium notes. A company may take premium notes, or give credit for part of its premiums, in accordance with its usual course of business.
(1949 Rev., S. 6173.)
History: Sec. 38-147 transferred to Sec. 38a-443 in 1991.
Annotation to former section 38-147:
Cited. 74 C. 353.

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Sec. 38a-444. (Formerly Sec. 38-147b). Life insurance policy loans. Interest rate allowable. (a) For purposes of this section: (1) "Policy" means all contracts of life insurance which provide for policy loans, certificates insuring persons against loss of life issued by a fraternal benefit society and annuity contracts which provide for such loans; (2) "policy loan" means a loan to a policyholder, under the provisions of an insurance contract, that is secured by the cash surrender value or collateral assignment of the related policy or contract. "Policy loan" includes: (A) Cash loans, including loans resulting from early payment benefits or accelerated payment benefits, on contracts when the terms of the contract specify that such payments are policy loans secured by the policy, and (B) automatic premium loans, which are loans made in accordance with policy provisions whereby delinquent premium payments are automatically paid from the cash value at the end of the established grace period for premium payments; (3) "policyholder" includes the owner of the policy or the person designated to pay premiums as shown in the records of the life insurer; (4) "published monthly average" means: (A) Moody's Corporate Bond Yield Average-Monthly Average Corporates as published by Moody's Investors Service, Inc. or any successor thereto; or (B) in the event that Moody's Corporate Bond Yield Average-Monthly Average Corporates is no longer published, a substantially similar average, established by the Insurance Commissioner in regulations the commissioner may adopt in accordance with the provisions of chapter 54; (5) the rate of interest permitted under this section on policy loans includes the rate of interest charged on reinstatement of policy loans for the period during and after any lapse of a policy.
(b) Policies issued on or after October 1, 1981, shall provide for loan interest rates as follows: (1) A provision permitting a maximum interest rate of not more than eight per cent per annum; or (2) a provision permitting an adjustable maximum interest rate established from time to time by the life insurer as permitted by this section.
(c) The rate of interest charged on a policy loan made under subdivision (2) of subsection (b) of this section shall not exceed the higher of the following: (1) The published monthly average for the calendar month ending two months before the date on which the rate is determined; or (2) the rate used to compute the cash surrender values under the policy during the applicable period plus one per cent per annum.
(d) If the maximum rate of interest is determined pursuant to subdivision (2) of subsection (b) of this section, the policy shall contain a provision specifying the frequency at which the rate is to be determined.
(e) The maximum rate for each policy shall be determined at regular intervals at least once every twelve months, but not more frequently than once every three months. At the intervals specified in the policy: (1) The rate charged may be increased whenever the rate is one-half of one per cent or more per annum less than the maximum rate determined under subsection (c) of this section; (2) the rate charged shall be reduced whenever the rate is one-half of one per cent or more per annum greater than the maximum rate determined under subsection (c) of this section.
(f) The life insurer shall: (1) Notify the policyholder at the time a cash loan is made of the initial rate of interest on the loan; (2) notify the policyholder with respect to premium loans of the initial rate of interest on the loan as soon as is reasonably practicable after making the initial loan. Notice of the rate of interest need not be given to the policyholder when a further premium loan is added, except as provided in subdivision (3) of this subsection; (3) forward to the policyholder with an outstanding loan, reasonable advance notice of any increase in the rate; and (4) include in the notices required by this subsection, the substance of the provisions of subsections (b) and (d) of this section.
(g) No policy shall terminate in a policy year as the sole result of a change in the interest rate during that policy year. The life insurer shall maintain coverage during that policy year until the time at which it would otherwise have terminated if there had been no change.
(h) The provisions of this section shall not apply to any insurance contract issued before October 1, 1981, unless the policyholder agrees in writing to the applicability of such provisions.
(i) The provisions of sections 37-4, 37-5 and 37-6 shall not affect any loan made under subdivision (2) of subsection (b) of this section.
(P.A. 81-51; P.A. 00-30, S. 12, 14.)
History: Sec. 38-147b transferred to Sec. 38a-444 in 1991; P.A. 00-30 amended Subdiv. (a)(2) to redefine "policy loan", and made technical changes in Subdiv. (a)(3) for purposes of gender neutrality, effective January 1, 2001.
See Secs. 38a-595 to 38a-626, inclusive, 38a-631 to 38a-640, inclusive, and 38a-800 re fraternal benefit societies.

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Sec. 38a-445. (Formerly Sec. 38-160). Deferring the granting of loans and surrender values. No policy of life or endowment insurance shall be issued or delivered in this state unless it contains a provision that the company may, at its option, defer the granting of any loan other than to pay premiums on policies in the company, and may, at its option, defer the granting of any surrender value for a period which shall be stated in such provision and which shall be not less than sixty days from the date of the application for such loan or surrender value; provided a foreign or alien insurance company may issue in this state any policy containing provisions required by the laws of its own state or country respecting the deferring of loans or granting surrender values, and a domestic insurance company may issue in other states policies which contain provisions relating to the deferring of loans or granting surrender values required by the laws of such states.
(1949 Rev., S. 6169; P.A. 90-243, S. 64.)
History: P.A. 90-243 substituted "foreign" for "nonresident" insurance companies and "alien" for "foreign" insurance companies; Sec. 38-160 transferred to Sec. 38a-445 in 1991.

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Sec. 38a-446. (Formerly Sec. 38-149). Discrimination in favor of individuals prohibited. No life insurance company doing business in this state shall make or permit any distinction or discrimination in favor of individuals between insurants of the same class and expectation of life in the amount or payment of premiums or rates charged for policies of life or endowment insurance, or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the contracts it makes; nor shall any such company or any producer or other person make any contract of insurance or agreement as to such contract other than is plainly expressed in the policy issued thereon.
(1949 Rev., S. 6139; P.A. 96-193, S. 13, 36.)
History: Sec. 38-149 transferred to Sec. 38a-446 in 1991; P.A. 96-193 substituted "producer" for "agent, subagent, broker", effective June 3, 1996.
See Sec. 38a-488 re prohibition against discrimination between individuals of same class with respect to premiums or rates charged.
See Sec. 38a-816 re unfair practices.
See Sec. 38a-825 re prohibition against premium rebate or other special favor.

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Sec. 38a-447. (Formerly Sec. 38-150). Discrimination against persons on the basis of race prohibited. No life insurance company doing business in this state may: (1) Make any distinction or discrimination between persons on the basis of race, as to the premiums or rates charged for policies upon the lives of such persons; (2) demand or require greater premiums from persons of one race than such as are at that time required by that company from persons of another race of the same age, sex, general condition of health and hope of longevity; or (3) make or require any rebate, diminution or discount on the basis of race upon the sum to be paid on any policy in case of the death of any person insured, nor insert in the policy any condition, nor make any stipulation whereby such person insured shall bind himself, his heirs, executors, administrators or assigns to accept any sum less than the full value or amount of such policy, in case of a claim accruing thereon by reason of the death of such person insured, other than such as are imposed upon all persons in similar cases; and each such stipulation or condition so made or inserted shall be void.
(1949 Rev., S. 6140; P.A. 90-243, S. 170.)
History: P.A. 90-243 divided the section into Subsecs., substituted "may" for "shall" and deleted references to specific groups and inserted a general prohibition against discrimination; Sec. 38-150 transferred to Sec. 38a-447 in 1991.

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Secs. 38a-448 and 38a-449. (Formerly Secs. 38-151 and 38-152). Affidavit of examining physician. Sections 38a-448 and 38a-449 are repealed.
(1949 Rev., S. 6141, 6142; P.A. 92-60, S. 28.)

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Sec. 38a-450. (Formerly Sec. 38-159). Certain corporations and associations may be made beneficiaries. Any life insurance company doing business within the state may issue policies of insurance predicated upon the life or lives of any person or persons, payable at maturity to any educational, ecclesiastical, benevolent, charitable or eleemosynary corporation which can legally take and receive testamentary legacies, irrespective of a financial interest on the part of such corporation in the life of the person or persons insured.
(1949 Rev., S. 6149.)
History: Sec. 38-159 transferred to Sec. 38a-450 in 1991.

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Sec. 38a-451. (Formerly Sec. 38-159a). Trustee as beneficiary of policy. (a) Unless prohibited by the policy there may be designated, as beneficiary of any policy issued by any life insurance company, the trustee of a trust to be created in and by the last will of the insured or in and by an inter vivos trust. Such designation may direct payment to such trustee as may qualify and be appointed for such trust. Upon the death of the insured and the qualification of the trustee of such testamentary or inter vivos trust, such life insurance company shall pay to such trustee the proceeds of the policy and other sums, if any, due the beneficiary thereunder. If (1) the insured dies intestate, or (2) no inter vivos trust is created or no such trust is created in the will of the insured duly admitted to probate, or (3) if such trust is so created but no trustee thereof qualifies as such within one year after the death of the insured or if the inter vivos trust has been terminated, such life insurance company shall pay such proceeds and other sums, if any, to such contingent beneficiary, if any, as may have been designated for that one of such contingencies (1), (2) or (3) as has occurred, and, if none was so designated, to the executors or administrators of the insured.
(b) This section shall apply to all such designations of beneficiary by an insured dying after June 15, 1965, whether or not a trustee shall be identified by name in the policy.
(February, 1965, P.A. 230, S. 1, 2.)
History: Sec. 38-159a transferred to Sec. 38a-451 in 1991.

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Sec. 38a-452. (Formerly Sec. 38-159b). Payment of interest on life insurance death benefits. (a) In the event an action to recover the proceeds due under a life insurance policy or annuity contract is commenced and results in a judgment against the insurer, interest thereon shall be paid from the date of the death of an insured or annuitant in connection with a death claim on a life insurance policy or annuity contract and from the date of maturity of an endowment contract to the date the verdict is rendered or the report or decision is made, computed under the provisions of subsection (b) of this section.
(b) In the event no action has been commenced, interest upon the principal sum paid to the beneficiary or policyholder respectively shall be computed daily at the rate of interest currently paid by the insurer on proceeds left under the interest settlement option, commencing no later than ten days after the date of the death of an insured or annuitant in connection with a death claim on a life insurance policy or annuity contract and commencing no later than ten days after the date of maturity of an endowment contract to the date of payment and shall be added to and be a part of the total sum paid.
(c) The provisions of this section shall not apply to policies or contracts issued prior to October 1, 1976, which contain specific provisions to the contrary.
(P.A. 76-60, S. 1−3.)
History: Sec. 38-159b transferred to Sec. 38a-452 in 1991.

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Sec. 38a-453. (Formerly Sec. 38-161). Rights of creditors of insured against beneficiary. (a) The beneficiary of any life insurance policy, being a person other than the insured, whether named as beneficiary in the original policy or subsequently named as beneficiary in accordance with the terms of the policy, shall be entitled to the proceeds of the policy as against the representatives or creditors of the insured, unless the policy was procured or the designation of a beneficiary was made with intent, express or implied, to defraud creditors.
(b) If any such policy was procured or any such designation made with the intent, express or implied, to defraud creditors, the proceeds thereof shall become a part of the estate of the insured, and the executor or administrator of the estate shall collect the insurance and use the proceeds thereof so far as it is required for the expenses of administration and the payment of debts and pay over the balance, if any, to the beneficiary of the policy. If any premiums paid on the insurance policy were paid with the intent, express or implied, to defraud creditors, the amount of the premiums so paid, with interest thereon, shall become a part of the estate and shall be dealt with as above provided.
(c) The company issuing the policy shall be discharged of all liability thereunder by payment of the proceeds in accordance with the terms of the policy unless, before such payment, the company has received written notice, from a creditor, executor or administrator of the insured, that the policy was procured or premiums were paid thereon with intent to defraud creditors. That notice may be disregarded by the company unless proper legal proceedings to enforce the claim are begun within three months from the giving of the notice.
(d) This section shall apply to any policy of insurance issued before July 1, 1933, but not to policies which matured by the death of the insured before July 1, 1933.
(1949 Rev., S. 6150; P.A. 90-243, S. 65.)
History: P.A. 90-243 divided the section into Subsecs. and made technical changes for statutory consistency; Sec. 38- 161 transferred to Sec. 38a-453 in 1991.
Annotations to former section 38-161:
Where husband assigned insurance on his life as security for bank loan, joinder by wife in assignment did not defeat her right as beneficiary to excess of proceeds above debt to bank. 120 C. 306.
Cited. 39 CS 470, 475.
Annotations to present section:
Cited. 229 C. 459, 462.
Subsec. (c):
Cited. 229 C. 459, 462, 464, 465.

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Sec. 38a-454. (Formerly Sec. 38-162). Proceeds of insurance policies and annuities may be held in trust. Any domestic life insurance company shall have power to hold the proceeds of any policy issued by it under a trust or other agreement upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as have been agreed to in writing by such company and the policyholder. Such insurance company shall not be required to segregate funds so held but may hold them as a part of its general corporate assets. Similar terms, restrictions and exemptions, for the benefit of any payee other than the purchaser, may be included by any such company in any annuity contract or any agreement issued in connection therewith or supplemental thereto. When any foreign or alien life insurance company doing business in Connecticut holds the proceeds of a life insurance policy or annuity contract under any trust or other agreement consistent with its charter or the laws of its domicile, beneficiaries of such trust or other agreement shall be entitled to exemptions from claims of creditors as hereinbefore provided to the same extent as if the trust or other agreement were entered into with a domestic life insurance company.
(1949 Rev., S. 6151; P.A. 90-243, S. 66.)
History: P.A. 90-243 substituted "foreign" for "nonresident" and "alien" for "foreign" insurance companies; Sec. 38- 162 transferred to Sec. 38a-454 in 1991.

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Sec. 38a-455. Assignment of incidents of ownership under group life policy. Any person whose life is insured under any policy of group life insurance is permitted to make an assignment of all or any part of his incidents of ownership in such insurance, including, without limitation, any right to designate a beneficiary or beneficiaries thereunder and any right to have an individual policy issued upon termination either of employment or of said policy of group insurance, if applicable, provided the insurer or group policyholder may prohibit or restrict such assignment by appropriate policy provisions. Such an assignment, subject to the terms of the policy or agreement between the group policyholder and the insurer, is valid for the purpose of vesting in the assignee, in accordance with any provisions included therein as to the time at which it is to be effective, all rights, benefits and incidents of ownership conferred under the policy and shall entitle the insurer to deal with the assignee as the owner of such rights, benefits and incidents of ownership, provided the insurer shall not be affected by any assignment until he has received written notice thereof.
(P.A. 90-243, S. 147.)

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Sec. 38a-456. Notice of cancellation or discontinuation of group life insurance coverage. (a) Any individual, partnership, corporation or unincorporated association providing group life insurance coverage for its employees shall furnish each insured employee, upon cancellation or discontinuation of such life insurance, notice of the cancellation or discontinuation of such insurance. The notice shall be mailed or delivered to the insured employee not less than fifteen days next preceding the effective date of cancellation or discontinuation. Any individual or any such entity which fails to provide timely notice shall be fined not more than one thousand dollars for each violation. The Labor Commissioner shall have the authority to assess all such fines. This section shall apply to any such individual, partnership, corporation or unincorporated association which substitutes one policy providing such group life insurance coverage for another such policy with no interruption in coverage.
(b) If any individual or any such entity fails to furnish notice pursuant to subsection (a) of this section, the individual or entity shall be liable for benefits to the same extent as the insurer would have been liable if coverage had not been cancelled or discontinued.
(P.A. 90-243, S. 148; May 25 Sp. Sess. P.A. 94-1, S. 104, 130.)
History: May 25 Sp. Sess. P.A. 94-1 amended Subsec. (a) by making technical change, effective July 1, 1994.

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Sec. 38a-457. Accelerated benefits of life insurance policies. (a) As used in this section:
(1) "Accelerated benefits" means benefits payable under a life insurance policy sold in this state: (A) During the lifetime of the insured, in a lump sum or in periodic payments, as specified in the policy, provided upon the occurrence of a qualifying event, as defined in subparagraph (C) of subdivision (3) of this subsection, no such benefits shall be payable in periodic payments, (B) upon the occurrence of a qualifying event, as defined in the policy, and certified by a physician who is licensed under the laws of a state or territory of the United States, or such other foreign or domestic jurisdiction as the Insurance Commissioner may approve and (C) which reduce the death benefits otherwise payable under the life insurance policy.
(2) "Insurance policy" or "policy" means an insurance policy or certificate or rider or endorsement thereto.
(3) "Qualifying event" means (A) a medically determinable condition suffered by the insured which can be expected to result in death in a relatively short period of time, such as twelve months and may include, but is not limited to, coronary artery disease, myocardial infarction, stroke, kidney failure or liver disease or (B) a medical condition which would, in the absence of extensive or extraordinary medical treatment, result in death in a relatively short period of time, such as twelve months, or (C) a medically determinable condition suffered by the insured which has caused the insured to be confined for at least six months in an institution which provides necessary care or treatment of an injury, illness or loss of functional capacity rendered by a certified or licensed health care provider in a setting other than an acute care hospital, and it has been medically determined that such insured is expected to remain confined in such institution until death.
(b) On and after October 1, 1990, any life insurance company or fraternal benefits society doing business in this state may issue accelerated benefits life insurance policies, as described in this section, and certificates, riders or endorsements to existing life insurance policies which provide accelerated benefits, as described in this section.
(c) An accelerated benefits life insurance policy shall not include a policy providing for disability income protection coverage or long-term care coverage, as defined in sections 38a-501 and 38a-528.
(d) (1) Death benefits may not be reduced more than the amount of the accelerated benefits paid plus any applicable actuarial discount appropriate to the policy design for policies without additional premium payments. When an accelerated benefit is paid, the amount paid may be considered as (A) a pro rata reduction in cash value or death benefits, or both, or (B) a lien against the death benefit of the contract and the access to the cash value shall be restricted to any excess of the cash value over the sum of other outstanding loans and the lien.
(2) The accidental death benefit, if any, in the policy shall not be affected by the payment of the accelerated benefit.
(e) All accelerated benefits policies shall comply with the following disclosure requirements:
(1) The face of every accelerated benefits policy shall contain: (A) A description of coverage which uses the terminology "accelerated" and (B) the following statement: "Benefits as specified under this policy will be reduced upon receipt of an accelerated benefit."
(2) Disclosure is required, at the time of application and at the time the accelerated benefits payment request is submitted, of the potential tax implications of receiving this payout. The disclosure statement shall indicate that the receipt of accelerated benefits may be taxable and that the insured should seek assistance from their personal tax advisor. Such disclosure shall be prominently displayed on the first page of the policy.
(3) Prior to or concurrent with the application, the applicant shall be given a written disclosure including, but not limited to, a brief description of the accelerated benefit, the effect of the payment of an accelerated benefit on the policy's cash value, death benefit, premium, policy loans and policy liens, and definitions of the conditions or occurrences triggering payment of the accelerated benefits. In the event of direct mail solicitation, the disclosure shall be made upon acceptance of the application.
(4) The insurer shall disclose in its solicitation any separate identifiable premium for the accelerated benefit. Those insurers indicating that this accelerated benefit is offered without additional premium shall furnish a written explanation to the Insurance Commissioner when filing the product.
(5) Prior to or concurrent with the request for accelerated death benefits, the applicant shall be given an illustration demonstrating the effect of the payment of an accelerated benefit on the policy's cash value, death benefit, premium, policy loans and policy liens.
(f) The insurer shall file with the Insurance Department the information concerning the manner by which the actuarial discount and mortality charge, if any, is calculated for the accelerated benefit. The commissioner, if he determines that such discount or mortality charge is excessive, shall hold a hearing to determine such reasonable charges.
(g) Any life insurance policy or any certificate, rider or endorsement thereto, which provides accelerated benefits pursuant to the occurrence of a qualifying event, as defined in subparagraph (C) of subdivision (3) of subsection (a) of this section, shall contain the following statement printed in a conspicuous and readily discernible manner: "This policy is not a long-term care policy as defined in sections 38a-501 and 38a-528 of the Connecticut General Statutes."
(h) The Insurance Commissioner may adopt, in accordance with chapter 54, such regulations as he deems necessary for the purpose of this section, including the authority to establish the minimum or maximum benefit, if any, payable under an accelerated benefit policy. Prior to the effective date of any such regulations, any such policy may be filed with the commissioner and, at his discretion, may be approved.
(P.A. 90-200, S. 1; P.A. 92-60, S. 18.)
History: P.A. 92-60 made technical corrections for statutory consistency.

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Sec. 38a-458. Life insurance policies providing long-term care benefits. Regulations. (a) On and after June 16, 1989, any life insurance company doing business in this state may issue life insurance policies or certificates, or riders or endorsements thereto, which provide, within the terms and conditions of the policy or certificate, long- term care benefits as described in section 38a-501, provided such company is licensed for both life and health insurance in this state. The Insurance Commissioner may adopt regulations, in accordance with chapter 54, to implement the provisions of this section. Prior to the effective date of such regulations, any such policy, certificate, rider or endorsement may be filed with the commissioner and may be approved at the commissioner's discretion.
(b) Long-term care benefits provided pursuant to this section shall not be subject to the requirements of subsection (b) of section 38a-501 or subsection (b) of section 38a-528.
(c) No insurance agent shall sell any such policy, certificate, rider or endorsement unless the agent is licensed to sell both life and health insurance in this state.
(d) A life insurance policy with long-term care benefits issued pursuant to this section may include a rider that provides long-term care benefits that become payable upon exhaustion of benefits under the life insurance policy. The elimination period limitations shall apply only to the life insurance policy to which the rider is attached. Such rider shall not contain an additional elimination period and may calculate the waiver of premium from the time benefits are payable under such rider.
(P.A. 89-236, S. 2, 3; P.A. 92-60, S. 19; P.A. 00-34, S. 1.)
History: P.A. 92-60 made technical corrections for statutory consistency; P.A. 00-34 made technical changes in Subsecs. (a) and (c), and added Subsec. (d) re optional rider that may be added to life insurance policy with long-term care benefits that provides such benefits that become payable upon exhaustion of benefits under the life insurance policy, and that elimination period limitations shall apply only to the life insurance policy to which the rider is attached, and that such rider contain no additional elimination period and may calculate the waiver of premium from time benefits are payable under the rider.

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Sec. 38a-458a. Option for certain insurers to combine long-term care coverage with certain life, endowment or annuity coverages. Notwithstanding the provisions of sections 38a-430, 38a-481 and 38a-501, or any regulation adopted pursuant to said sections, an insurer licensed for both life and health insurance in this state may combine the following coverages, by rider or otherwise, within a single-premium policy or contract: (1) Life or endowment insurance or annuity, survivorship annuity or pure endowment insurance; and (2) long-term care insurance.
(P.A. 00-34, S. 2.)

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Sec. 38a-459. (Formerly Sec. 38-33a). Funding agreements by domestic life insurance companies. Establishment of companies' obligations. Segregation of moneys. (a) Notwithstanding any inconsistent provision in its charter, any domestic life insurance company may enter into written agreements (1) to fund benefits under any employee benefit plan as defined in the Employee Retirement Income Security Act of 1974, as amended from time to time, or any similar plan maintained in a foreign country, (2) to fund the activities of any organization exempt from taxation under Section 501(c) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, or of any similar organization in any foreign country, (3) to fund any program of the government of the United States, the government of any state, foreign country or political subdivision thereof, or any agency or instrumentality thereof, (4) to fund any agreement providing for periodic payments in satisfaction of a claim, or (5) to fund any program of an institution which has assets in excess of twenty-five million dollars. Under such agreements, the company's obligations may be established by reference to (A) amounts deposited with the company and allocated to such company's general account or to one or more separate accounts in accordance with subsection (b) or (c) of this section or pursuant to section 38a-433, or (B) an asset portfolio that is not owned or possessed by such company. The issuance or delivery of a funding agreement in this state shall constitute doing an insurance business in this state.
(b) After adoption of a resolution by its board of directors and certification thereof to the Insurance Commissioner, any amounts which are paid to or held by such company in accordance with the terms of such written agreements may be allocated to one or more separate accounts. In connection with such separate accounts any such company may issue, subject to the terms of such written agreement, individual or group policies or contracts with benefits payable in fixed or variable amounts. The income, if any, and gains or losses, realized or unrealized, on each such account may be credited to or charged against the amount allocated to such account in accordance with such agreement, without regard to the other income, gains or losses of the company. Notwithstanding any inconsistent provision in its charter or in any section of the general statutes, the amounts allocated to such accounts and accumulations thereon may be invested and reinvested in any class of loans and investments specified in such agreement, and such loans and investments shall not be included in applying the limitations provided in sections 38a-102 to 38a-102h, inclusive. Amounts allocated by an insurance company to separate accounts in the exercise of the power granted by this section shall be owned by the company, and the company shall not be, or hold itself out to be, a trustee in respect to such amounts, except that such amounts shall not be chargeable with liabilities arising out of any other business the company may conduct.
(c) Reserves for fixed retirement benefits, or other benefits incidental thereto, in the course of payment, may be maintained in a separate account with the approval of the Insurance Commissioner and under such conditions as he may prescribe, except that any such reserves which are attributable to contributions by a self-employed individual on his own behalf, or to contributions subject to Section 403(b) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, shall not be maintained in a separate account.
(1959, P.A. 317, S. 1; February, 1965, P.A. 515, S. 1; 1967, P.A. 530, S. 1; 1969, P.A. 465; P.A. 77-614, S. 163, 610; P.A. 80-482, S. 273, 348; P.A. 83-208, S. 1, 3; P.A. 85-125; P.A. 89-211, S. 43; P.A. 93-239, S. 14; P.A. 97-108, S. 2.)
History: 1965 act authorized issuance of policies with benefits payable in both fixed and variable amounts and amended provisions where necessary to distinguish between the two types; 1967 act deleted exemption to provisions for "amounts contributed by a participant who is entitled to retirement benefits, or benefits incidental thereto, under such a pension, retirement or profit-sharing plan" in Subsec. (b); 1969 act deleted proviso in Subsec. (a) which required that plan must cover twenty-five or more individuals at time of agreement if benefits are to be payable in variable amounts and specified that separate accounts are not chargeable with liabilities arising from company's other business and entirely replaced Subsec. (b) which had exempted amounts applied to purchase of fixed retirement benefits and other incidental benefits from provisions of section; P.A. 77-614 placed insurance commissioner within the department of business regulation and made insurance department a division within that department, effective January 1, 1979; P.A. 80-482 restored insurance commissioner and division to prior independent status and abolished the department of business regulation; P.A. 83-208 amended Subsec. (a) to provide that any domestic life insurance company may enter into written agreements to fund benefits under any employee benefit plan, fund the activities of tax-exempt organizations, or fund any governmental program, deleting less specific provisions; P.A. 85-125 divided former Subsec. (a) into Subsecs. (a) and (b), relettering Subsec. (c) accordingly, authorized insurance companies to fund agreements providing for periodic payments in satisfying a claim and to fund programs of institutions having assets of more than twenty-five million dollars, allowed companies to allocate funds from agreements to their general accounts and stated that issuance or delivery of agreements in this state constitutes doing an insurance business; P.A. 89-211 clarified references to the Internal Revenue Code of 1986; Sec. 38- 33a transferred to Sec. 38a-459 in 1991; P.A. 93-239 made technical corrections for statutory consistency and substituted "sections 38a-102 to 38a-102h, inclusive" for "section 38a-95"; P.A. 97-108 amended Subsec. (a) to add Subparas. (A) and (B) re establishing a company's obligations and to make technical changes.

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Sec. 38a-460. Accumulation fund arrangements. Definition. (a) Any domestic life insurance company may provide accumulation fund arrangements in connection with the making of any life insurance contract or annuity contract, including any contract that makes life insurance or annuities available on an optional basis, and such company may insure the balance accumulated under such accumulation fund arrangements by promising a rate of return on such arrangements in fixed or variable amounts or in any combination of fixed and variable amounts. As used in this section and in section 38a- 92a, "accumulation fund arrangement" means an arrangement under which amounts are allowed to accumulate at the rate or rates credited by a life insurance company and under which accumulated amounts may be applied in the future to the purchase of life insurance coverage or annuitized benefits or may be distributed through one or more cash payments.
(b) Under such accumulation fund arrangements, the company's obligations may be established by reference to (1) amounts deposited with the company and allocated to its general account or one or more of its separate accounts pursuant to section 38a- 433, or (2) an asset portfolio that is not owned or possessed by the insurance company.
(P.A. 97-108, S. 1.)

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Secs. 38a-461 to 38a-463. Reserved for future use.

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PART II
BURIAL CONTRACTS