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of the general statutes is repealed and the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