In addition to those matters set out in §21.2206 of this title (relating to General Rules and Prohibitions), the standards set out in paragraphs (1)-(4) of this subsection shall apply to a basic illustration. (1) Format. A basic illustration shall conform with the following requirements: (A) the assumed dates of payment receipt and benefit pay out within a policy year shall be clearly identified; (B) the assumed payments on which the illustrated benefits and values are based shall be identified as premium outlay or contract premium, as applicable. For policies that do not require a specific contract premium, the illustrated payments shall be identified as premium outlay; (C) guaranteed death benefits and values available upon surrender, if any, for the illustrated premium outlay or contract premium shall be shown and clearly labeled guaranteed; (D) the guaranteed elements,
if any, shall be shown before corresponding non-guaranteed elements and shall be specifically referred to on any page of an illustration that shows or describes only the non-guaranteed elements (e.g., "see page one for guaranteed elements"). (2) Narrative summary. Excluding a cover page, a basic illustration shall begin with a narrative summary which shall include: (A) a brief description of the policy being illustrated, including a statement that it is a life insurance policy; (B) a brief description of the premium outlay or contract premium, as applicable, for the policy. For a policy that does not require payment of a specific contract premium, the illustration shall show the premium outlay that must be paid to guarantee coverage for the term of the contract, subject to maximum premiums allowable to qualify as a life insurance policy under the applicable provisions of the Internal Revenue Code; (C) a
brief description of any policy features, riders or options, guaranteed or non-guaranteed, shown in the basic illustration and the impact they may have on the benefits and values of the policy; (D) identification and a brief definition of column headings and key terms used in the illustration; and (E) A statement which: (i) identifies those benefits and values which are not guaranteed; (ii) identifies the assumptions upon which the illustration is based; (iii) discloses that the assumptions are not likely to continue unchanged for the years shown and that the assumptions are subject to change by the insurer; (iv) discloses that actual results may be more or less favorable; and (v) identifies generally the factors which may affect future policy performance, such as death claims, investment earnings and overhead costs.
(3) Numeric summary. Following the narrative summary, a basic illustration shall include a numeric summary of the death benefits and values and the premium outlay and contract premium, as applicable. (A) For a policy that provides for a contract premium, the guaranteed death benefits and values shall be based on the contract premium. This summary shall be shown for at least policy years five, 10 and 20 and at age 70, if applicable. For multiple life policies the summary shall show policy years five, 10, 20 and 30. The summaries required in this subparagraph shall be presented on the three bases set out in clauses (i)-(iii) of this subparagraph, as follows: (i) policy guarantees; (ii) insurer's illustrated scale; and (iii) insurer's illustrated scale used but with the non-guaranteed elements reduced as set out in subclauses (I)-(III) as follows: (I) dividends at
50% of the dividends contained in the illustrated scale used; (II) non-guaranteed credited interest at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used; and (III) all non-guaranteed charges, including but not limited to, term insurance charges, mortality and expense charges, at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used. (B) In addition, if coverage would cease prior to policy maturity or age 100, the year in which coverage ceases shall be identified for each of the three bases set out in subparagraph (A) of this paragraph. (C) A statement substantially similar to the following shall be included on the same page as the numeric summary and signed by the applicant, or other owner in the case of illustration provided at the time of delivery, and the insurance producer or other authorized
representative or agent: "A copy of this illustration has been provided to the applicant/policy owner." (4) Tabular detail. Life insurance policy illustrations shall include, as applicable, the tabular detail set out in subparagraphs (A)-(C) of this paragraph. (A) A basic illustration shall include the following for at least each policy year from one to ten and for every fifth policy year thereafter ending at age 100, policy maturity or final expiration; and except for term insurance beyond the 20th year, for any year in which the premium outlay and contract premium, if applicable, is to change: (i) The premium outlay and mode the applicant plans to pay and the contract premium, as applicable; (ii) The corresponding guaranteed death benefit, as provided in the policy; and (iii) The corresponding guaranteed value available upon surrender, as provided in the policy.
(B) For a policy that provides for a contract premium, the guaranteed death benefit and value available upon surrender shall correspond to the contract premium. (C) Non-guaranteed elements may be shown if described in the contract. In the case of an illustration for a policy on which the insurer intends to credit terminal dividends, they may be shown if the insurer's current practice is to pay terminal dividends. If any non-guaranteed elements are shown, they must be shown at the same durations as the corresponding guaranteed elements, if any. If no guaranteed benefit or value is available at any duration for which a non-guaranteed benefit or value is shown, a zero shall be displayed in the guaranteed column.
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