Oregon Department of Consumer and Business Services, Insurance Regulation

Rule Rule 836-051-0540
General Rules and Prohibitions


(1)

An illustration used in the sale of a life insurance policy shall satisfy the applicable requirements of OAR 836-051-0500 (Purpose; Authority) to 836-051-0600 (Trade Practice Regulation), be clearly labeled “life insurance illustration” and contain the following basic information:

(a)

Name of insurer;

(b)

Name and business address of the insurance producer, if any;

(c)

Name, age and sex of proposed insured, except when a composite illustration is permitted under OAR 836-051-0500 (Purpose; Authority) to 836-051-0600 (Trade Practice Regulation);

(d)

Underwriting or rating classification upon which the illustration is based;

(e)

Generic name of policy, the insurer product name, if different, and form number;

(f)

Initial death benefit; and

(g)

Dividend option election or application of non-guaranteed elements, if applicable.

(2)

When using an illustration in the sale of a life insurance policy, neither an insurer nor its insurance producer shall:

(a)

Represent the policy as anything other than a life insurance policy;

(b)

Use or describe non-guaranteed elements in a manner that is misleading or has the capacity or tendency to mislead;

(c)

State or imply that the payment or amount of non-guaranteed elements is guaranteed;

(d)

Use an illustration that does not comply with the requirements of OAR 836-051-0500 (Purpose; Authority) to 836-051-0600 (Trade Practice Regulation);

(e)

Use an illustration that at any policy duration depicts policy performance more favorable to the policy owner than that produced by the illustrated scale of the insurer whose policy is being illustrated;

(f)

Provide an applicant with an incomplete illustration;

(g)

Represent in any way that premium payments will not be required for each year of the policy in order to maintain the illustrated death benefits, unless that is the fact;

(h)

Use the term “vanish” or “vanishing premium,” or a similar term that implies the policy becomes paid up, to describe a plan for using non-guaranteed elements to pay a portion of future premiums;

(i)

Except for policies that can never develop nonforfeiture values, use an illustration that is “lapse-supported”; or

(j)

Use an illustration that is not “self-supporting.”

(3)

If an interest rate used to determine the illustrated non-guaranteed elements is shown, it shall not be greater than the earned interest rate underlying the disciplined current scale.
Source

Last accessed
Jun. 8, 2021