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304.15-400 Prohibited policy plans.
(1)
No life insurer shall hereafter deliver or issue for delivery in this state:
(a) As part of or in combination with any life insurance, endowment or
annuity contract, any agreement or plan, additional to the rights,
dividends, and benefits arising out of any such contract, which provides
for the accumulation of profits over a period of years and for payment of
all or any part of such accumulated profits only to members or
policyholders of a designated group or class who continue as members or
policyholders until the end of a specified or ascertainable period of years.
(b) Any "registered" policy; that is, any policy purporting to be "registered" or
otherwise specially recorded, with any agency of the state of Kentucky or
of any other state, or with any bank, trust company, escrow company, or
other institution other than the insurer; or purporting that any reserves,
assets or deposits are held, or will be so held, for the special benefit or
protection of the holder of such policy, by or through any such agency or
institution.
(c) Any policy or contract under which any part of the premium or of funds or
values arising from the policy or contract or from investment of reserves,
or from mortality savings, lapses or surrenders, in excess of the normal
reserves or amounts required to pay death, endowment, and nonforfeiture
benefits in respective amounts as specified in or pursuant to the policy or
contract, are on a basis not involving insurance or life contingency
features:
1.
To be placed in special funds or segregated accounts or special
designated places or
2.
To be invested in specially designated investments or types thereof,
and the funds or earnings thereon to be divided among the holders
of such policies or contracts, or their beneficiaries or assignees.
This provision does not apply as to any contract authorized under KRS
304.15-390.
(d) Any policy providing benefits or values for surviving or continuing
policyholders contingent upon the lapse or termination of the policies of
other policyholders, whether by death or otherwise.
(e) Any policy containing or referring to one or more of the following
provisions or statements:
1.
Investment returns or profit sharing, other than as a participation in
the divisible surplus of the insurer under a regular participation
provision as provided for in KRS 304.15-100.
2.
Special treatment in the determination of any dividend that may be
paid as to such policy.
3.
Reference to premiums as "deposits."
4.
Relating policyholder interest or returns to those of stockholders.
5.
That the policyholder as a member of a select group will be entitled
to extra benefits or extra dividends not available to policyholders
generally.
(2)
This section shall not be deemed to prohibit the provision, payment, allowance
or apportionment of regular annual dividends or "savings" under regular
participating forms of policies or contracts.
Effective:June 18, 1970
History: Created 1970 Ky. Acts ch. 301, subtit. 15, sec. 40, effective June 18,
1970.
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