Senate Bill No. 988
               Senate Bill No. 988

               PUBLIC ACT NO. 97-34


AN  ACT CONCERNING THE POLICY LIMITS APPLICABLE TO
SAVINGS BANK LIFE INSURANCE.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section  1.  Subsection (e) of section 36a-285
of  the  general  statutes  is  repealed  and  the
following is substituted in lieu thereof:
    (e)  [(1)  An  insurance bank may not obligate
itself to  pay  more  than  one  hundred  thousand
dollars  in  the event of the death of one person.
The  amount  of  such  policy  limits   shall   be
exclusive  of:  (A)  Dividends, profits or premium
refunds or paid-up insurance purchased  with  such
dividends  or profits; and (B) such amounts as may
be payable under:  (i)  An  agreement  to  pay  an
amount  equal  to a cash surrender value in excess
of the face amount of the  policy;  (ii)  a  group
policy as defined by the Insurance Commissioner in
accordance  with  section  38a-431,  provided   no
insurance  bank  may  obligate  itself to pay more
than two hundred thousand dollars in the event  of
the  death  of one person insured under such group
policy;  (iii)  a  policy   issued   pursuant   to
conversion  privileges  of a group policy; (iv) an
agreement to waive certain future premiums under a
policy  issued  on  the  life of a minor or on the
life of a spouse of the payor upon  the  death  of
the   payor  of  such  premiums;  (v)  an  annuity
contract embodying an agreement  to  refund,  upon
the  death  of  the  holder, to his estate or to a
specific payee, a sum not exceeding  the  premiums
paid  thereon  with  compound  interest. Except as
provided in subparagraphs  (A)  and  (B)  of  this
subdivision,  no  insurance  bank  shall issue any
policy  or  policies  of  life  insurance  to  any
applicant,  if  the  insurance so issued, together
with  life  insurance  policies  issued  by  other
insurance   banks   and   The  Savings  Bank  Life
Insurance Company in force on  the  life  of  such
applicant,   would   exceed   the  maximum  amount
permitted by this subsection to be issued  by  one
insurance  bank. No insurance bank shall write any
annuity  contract  for  any  applicant   if   such
contract,  together with annuity contracts written
by other insurance banks and The Savings Bank Life
Insurance  Company  for such applicant, would bind
such banks and the company to pay in any one  year
more than twenty thousand dollars, provided larger
payments may be made outside of  life  contingency
options.  Before  any  such  annuity  contract  is
executed,  the  prospective   purchaser   of   the
contract  shall  be  given  written  notice by the
insurance  bank   which   clearly   explains   the
provisions of this subsection.
    (2)]  (1)  No  policy  of  life  or  endowment
insurance  issued  by  any  insurance  bank  shall
become  forfeit or void for nonpayment of premiums
after six months' premiums have been paid thereon;
and,  in  case  of  default  in the payment of any
subsequent  premium,  then,  without  any  further
stipulation  or  act, such policy shall be binding
upon such bank  at  the  option  of  the  insured,
either  (A)  for  the  cash surrender value, which
shall be equal to the  reserve  less  a  surrender
charge  of  not more than one per cent of the face
amount of the policy, and which shall be increased
by   the   value  of  any  dividend  additions  or
dividends then  standing  to  the  credit  of  the
policy,  and  which  shall  be  decreased  by  any
indebtedness; or (B) for  the  amount  of  paid-up
insurance  which  the  cash  surrender  value,  as
defined in subparagraph (A), will  purchase  as  a
net  single  premium  for  the  life  or endowment
insurance, as the case may  be,  provided  by  the
policy;  or  (C)  for  an  amount  of paid-up term
insurance  which  the  cash  surrender  value,  as
defined  in  subparagraph  (A), will purchase as a
net single premium, but  if  such  cash  value  is
greater  than the net single premium for such term
insurance to the original date of maturity of  the
policy,  the  excess  shall  be used to purchase a
paid-up pure endowment maturing  at  the  original
date  of maturity of the policy. If no election is
made, the option  contained  in  subparagraph  (C)
shall  be deemed to be elected by such insured. If
the  policy  provides  for  both   insurance   and
annuity,  the provisions of this subdivision shall
apply only to that part of  the  policy  providing
insurance.  Said  provisions  shall  not  apply to
annuity  or  pure  endowment  contracts,  with  or
without  return  of  premiums  or  of premiums and
interest,  whether  simple  or  compound,  or   to
survivorship  annuity  contracts  or  survivorship
insurance contracts, but each policy providing for
a  deferred  annuity  on  the  life of the insured
alone shall, unless paid for by a single  premium,
provide  that,  in  the event of the nonpayment of
any premium after six months' premiums  have  been
paid,   the  annuity  shall  automatically  become
converted  into  a  paid-up   annuity   for   such
proportion  of  the original annuity as the period
for which premiums have been  paid  bears  to  the
total period for which premiums are required to be
paid under the policy.
    [(3)]  (2)  Policies and annuity contracts may
be signed on behalf of an insurance bank  by  such
officer or employee thereof as the governing board
may, from time to time, determine.
    Sec.  2.  This  act shall take effect from its
passage.

Approved May 6, 1997