2010 Wyoming Statutes
Title 26 - Insurance Code
Chapter 16 - Life Insurance And Annuity Contracts

CHAPTER 16 - LIFE INSURANCE AND ANNUITY CONTRACTS

 

ARTICLE 1 - POLICY AND CONTRACT PROVISIONS

 

26-16-101. Scope and applicability of chapter.

 

This chapter, except W.S. 26-16-118 and 26-16-120, applies only to contracts of life insurance and annuities, other than reinsurance, group life insurance and group annuities.

 

26-16-102. Standard provisions required.

 

 

(a) No life insurance policy, other than group and pure endowments with or without return of premiums or of premiums and interest, shall be delivered or issued for delivery in this state unless it contains provisions conforming in substance to each of the applicable provisions specified in W.S. 26-16-103 through 26-16-114. This section does not apply to annuity contracts nor to any provisions of a life insurance policy, or contract supplemental thereto, relating to disability benefits or to additional benefits in case of death by accident or accidental means.

 

(b) Any of the provisions or portions thereof not applicable to single premium or term policies, to that extent, shall not be incorporated in the policy.

 

26-16-103. Grace period.

 

A grace period of thirty (30) days, or, at the insurer's option, of one (1) month of not less than thirty (30) days, or of four (4) weeks in the case of industrial life insurance policies the premiums for which are payable more frequently than monthly, shall be allowed within which the payment of any premium after the first may be made. The policy shall continue in full force during the grace period, which shall be counted from the premium due date specified in the policy. The insurer may impose an interest charge not to exceed six percent (6%) per annum for the number of days of grace elapsing before the payment of the premium, and, whether or not the interest charge is imposed, if a claim arises under the policy during the grace period the amount of any premium due or overdue, together with interest and any deferred installment of the annual premium, may be deducted from the policy proceeds.

 

26-16-104. Incontestability.

 

The policy, exclusive of provisions relating to disability benefits or to additional benefits in case of death by accident or accidental means, is incontestable, except for nonpayment of premiums, after it is in force during the insured's lifetime for a period of two (2) years from its date of issue.

 

26-16-105. Policy and application constitutes entire contract; statements deemed representations.

 

The policy, or the policy and the application therefor if a copy of the application is endorsed upon or attached to the policy when issued, constitutes the entire contract between the parties and statements contained in the application, in the absence of fraud, are representations and not warranties.

 

26-16-106. Misstatement of age.

 

If the age of the insured or of any other person whose age is considered in determining the premium or benefit is misstated, any amount payable or benefit accruing under the policy shall be in an amount as the premium would purchase at the correct age.

 

26-16-107. Dividends.

 

 

(a) In participating policies, beginning not later than the end of the third policy year, the insurer shall annually ascertain and apportion the divisible surplus, if any, that will accrue on the policy anniversary or other dividend date specified in the policy, provided the policy is in force and all premiums to that date are paid. Except as otherwise provided in this section, any dividend payable, at the option of the party entitled to elect the option, shall be either payable in cash or applied to any of the other dividend options provided by the policy. If any other dividend options are provided, the policy shall further state which option is automatically effective if the party does not elect some other option. If the policy specifies a period within which the other dividend option may be elected, the period shall be not less than thirty (30) days following the date on which the dividend is due and payable. The annually apportioned dividend is payable in cash within the meaning of the cash option specified in this subsection even though the policy provides that payment of the dividend is to be deferred for a specified period, provided the period does not exceed six (6) years from the date of apportionment and that interest will be added to the dividend at a specified rate.

 

(b) Renewable term policies of ten (10) years or less may provide that:

 

(i) The surplus accrued to the policies shall be determined and apportioned each year after the second policy year and accumulated during each renewal period;

 

(ii) At the end of the renewal period, on the insured's renewal of the policy, the insurer shall apply the accumulated surplus as an annuity for the next succeeding renewal term in reducing premiums.

 

(c) In participating industrial life insurance policies, instead of the provision required in subsection (a) of this section, there shall be a provision that beginning not later than the end of the fifth policy year, the policy shall participate annually in the divisible surplus, if any, in the manner set forth in the policy.

 

(d) This section does not apply to insurance issued in consideration of lapsed or surrendered policies.

 

26-16-108. Policy loans.

 

 

(a) As used in this section:

 

(i) "Policy" includes certificates issued by a fraternal benefit society and annuity contracts which provide for policy loans;

 

(ii) "Policyholder" includes the owner of the policy or the person designated to pay premiums as shown on the records of the life insurer;

 

(iii) "Policy loan" includes any premium loan made under a policy to pay one (1) or more premiums not paid to the life insurer when due;

 

(iv) "Published monthly average" means:

 

(A) Moody's Corporate Bond Yield Average-Monthly Average Corporates as published by Moody's Investors Service, Inc. or any successor; or

 

(B) If the Moody's Corporate Bond Yield Average-Monthly Average Corporates is no longer published, a substantially similar average established by regulation of the commissioner.

 

(v) "The rate of interest on policy loans" authorized under this section includes the interest rate charged on reinstatement of policy loans for the period during and after any lapse of a policy.

 

(b) After three (3) full years premiums are paid and after the policy has a cash surrender value and while no premium is in default beyond the grace period, the insurer will advance, on proper assignment or pledge of the policy and on the sole security of the policy, at a specified rate of interest, an amount equal to or at the option of the entitled party less than the policy's loan value. The policy loan value shall be at least equal to the cash surrender value at the end of the then current policy year, provided that the insurer may deduct from the loan value or from the loan proceeds, any existing indebtedness not already deducted in determining the cash surrender value including any interest then accrued but not due, any unpaid balance of the premium for the current policy year and interest on the loan to the end of the current policy year.

 

(c) The policy may also provide that:

 

(i) If interest on any indebtedness is not paid when due, it shall be added to the existing indebtedness and shall bear interest at the same rate; and

 

(ii) If the total indebtedness on the policy, including interest due or accrued, equals or exceeds the amount of the policy loan value, the policy terminates and is void after notice is mailed by the insurer within at least thirty (30) days to the last address of record with the insurer of the insured or other policy owner and of any assignee of record at the insurer's home office.

 

(d) The policy shall reserve the insurer's right to defer the granting of a loan, other than for the payment of any premium to the insurer, for six (6) months after application. The provision shall also contain a table indicating in writing the loan values each year during the first twenty (20) years of the policy or during the term of the policy, whichever is shorter.

 

(e) The policy, at the insurer's option, may provide for automatic premium loan.

 

(f) This section does not apply to:

 

(i) Term policies;

 

(ii) Term insurance benefits provided by rider or supplemental policy provisions; or

 

(iii) Industrial life insurance policies.

 

(g) Policies issued on or after July 1, 1983 shall provide for policy loan interest rates as follows:

 

(i) A provision permitting a maximum interest rate of not more than eight percent (8%) per year; or

 

(ii) A provision permitting an adjustable maximum interest rate established from time to time by the life insurer as authorized by law.

 

(h) The rate of interest charged on a policy loan made under paragraph (g)(ii) of this section shall not exceed the higher of the published monthly average for the calendar month ending two (2) months prior to the date on which the rate is determined or the rate used to compute the cash surrender values under the policy during the applicable period plus one percent (1%) per year.

 

(j) The policy shall contain a provision stating the frequency at which the rate is to be determined for that policy. The maximum rate for each policy shall be determined at regular intervals at least once every twelve (12) months but not more than once every three (3) months. At the intervals specified in the policy:

 

(i) The rate charged may be increased if the increase determined under subsection (h) of this section increases the rate by one-half percent (1/2%) or more per year; and

 

(ii) The rate charged shall be reduced if the reduction determined under subsection (h) of this section decreases the rate by one-half percent (1/2%) or more per year.

 

(k) The life insurer shall:

 

(i) Notify the policyholder of the initial rate of interest on the loan at the time a cash loan is made;

 

(ii) Notify the policyholder of the initial rate of interest on a premium loan as soon as reasonably practical after making the initial loan. No notice is required if an additional premium loan is added except as provided in paragraph (iii) of this subsection;

 

(iii) Provide policyholders having loans reasonable advance notice of any rate increase; and

 

(iv) Include in notices to policyholders required by this subsection the substance of the pertinent provisions of subsections (g) and (j) of this section.

 

(m) The loan value of the policy shall be determined in accordance with W.S. 26-16-202(a)(vi). No policy shall terminate in a policy year as the sole result of a change in the interest rate during that policy year. The life insurer shall maintain coverage during that policy year until the time at which it would otherwise have terminated if there had been no interest rate change during that policy year.

 

(n) The substance of the pertinent provisions of subsections (g) and (j) of this section shall be stated within the policies to which they apply.

 

(o) No other provision of law shall apply to policy loan interest rates unless made specifically applicable to such rates.

 

26-16-109. Table of installments required.

 

In case the policy provides that the proceeds are payable in installments which are determinable at issue of the policy, there shall be a table showing the amounts of the guaranteed installments.

 

26-16-110. Reinstatement of policies.

 

 

(a) Unless the policy has been surrendered for its cash surrender value, or its cash surrender value has been exhausted, or the paid-up term insurance, if any, has expired, the policy will be reinstated at any time within three (3) years, or two (2) years in the case of industrial life insurance policies, from the date of premium default upon:

 

(i) Written application therefor;

 

(ii) The production of evidence of insurability satisfactory to the insurer;

 

(iii) The payment of all premiums in arrears;

 

(iv) The payment or reinstatement of any other indebtedness to the insurer upon the policy; and

 

(v) The payment of interest at a rate not exceeding six percent (6%) per annum compounded annually on all payments required for reinstatement.

 

26-16-111. Time and place of payment of premiums.

 

The time and place of payment of premiums shall be specified.

 

26-16-112. Payment of claims.

 

If the benefits under the policy are payable because of the death of the insured, settlement shall be made upon receipt of proof of death and, at the insurer's option, surrender of the policy or proof of the interest of the claimant, or both. Benefits shall be paid within the time requirements of W.S. 26-15-124 and shall include interest accrued from the date of death until date of payment. The interest rate shall be not less than the rate of interest payable on death proceeds left on deposit with the insurer. For purposes of this section, date of payment shall include the date of the postmark stamped on an envelope properly addressed and postage prepaid, containing the payment. The provisions of this section requiring the payment of interest shall not apply to variable contracts which provide for insurance or annuity benefits which may vary according to the investment experience of any separate account or accounts maintained by the insurer as to such contract.

 

26-16-113. Beneficiaries of industrial life insurance policies.

 

 

(a) An industrial life insurance policy shall have the name of the beneficiary designated thereon, or in the application or other form if attached to the policy, with a reservation of the right to designate or change the beneficiary after the issuance of the policy, unless the beneficiary is irrevocably designated.

 

(b) The policy may also provide that:

 

(i) No designation or change of beneficiary is binding on the insurer until endorsed on the policy by the insurer;

 

(ii) The insurer may refuse to endorse the name of any proposed beneficiary who does not appear to the insurer to have an insurable interest in the insured's life;

 

(iii) If the beneficiary designated in the policy does not make a claim under the policy or does not surrender the policy with proof of death within the period stated in the policy, which shall not be less than thirty (30) days after the insured's death, or if the beneficiary is the estate of the insured, or is a minor, or dies before the insured, or is not legally competent to give a valid release, the insurer may make any payment thereunder to the insured's executor or administrator, or to any relative of the insured by blood or legal adoption or connection by marriage, or to any person appearing to the insurer to be equitably entitled thereto because of having been named beneficiary or having incurred expense for the insured's maintenance, medical attention or burial.

 

(c) The policy may also include a provision similar to that in paragraph (b)(iii) of this section applicable to any other payment due under the policy.

 

26-16-114. Title on policy.

 

There shall be a title on the policy briefly describing the policy.

 

26-16-115. Excluded or restricted coverage under incontestability clause.

 

A clause in any life insurance policy providing that the policy is incontestable after a specified period precludes only a contest of the policy's validity and does not preclude the assertion at any time of defenses based upon provisions in the policy which exclude or restrict coverage, whether or not the restrictions or exclusions are excepted in the clause.

 

26-16-116. Annuity and pure endowment contracts; standard provisions.

 

 

(a) No annuity or pure endowment contract, other than reversionary, survivorship or group annuities and except as stated in this section, shall be delivered or issued for delivery in this state unless it contains provisions conforming in substance to each of the provisions specified in W.S. 26-16-117. Any of the provisions not applicable to single premium annuities or single premium pure endowment contracts, to that extent, shall not be incorporated in the policy.

 

(b) This section does not apply to contracts for deferred annuities included in or upon the lives of beneficiaries under life insurance policies.

 

26-16-117. Annuity and pure endowment contracts; provisions to be contained.

 

 

(a) Any annuity or pure endowment contract, other than a reversionary, survivorship or group annuity, shall contain provisions as specified in this section.

 

(b) There shall be a grace period of one (1) month, but not less than thirty (30) days, within which any stipulated payment to the insurer falling due after the first may be made, subject at the option of the insurer to an interest charge thereon at a rate to be specified in the contract but not exceeding six percent (6%) per annum for the number of days of grace elapsing before the payment. The contract shall continue in full force during the grace period. If a claim arises under the contract because of death prior to expiration of the grace period before the overdue payment to the insurer or the deferred payments of the current contract year, if any, are made, the amount of the payments, with interest on any overdue payments, may be deducted from any amount payable under the contract in settlement.

 

(c) If any statements, other than those relating to age, sex and identity, are required as a condition to issuing an annuity or pure endowment contract, and subject to subsection (e) of this section the contract is incontestable after it is in force during the lifetime of the person or of each of the persons as to whom the statements are required, for a period of two (2) years from its date of issue, except for nonpayment of stipulated payments to the insurer. At the insurer's option the contract may also except any provisions relative to benefits in case of disability and any provisions which grant insurance specifically against death by accident or accidental means.

 

(d) The contract constitutes the entire contract between the parties, or if a copy of the application is endorsed upon or attached to the contract when issued, the contract and the application therefor constitute the entire contract between the parties.

 

(e) If the age or sex of any person upon whose life the contract is made is misstated, the amount payable or benefits accruing under the contract shall be in an amount as the stipulated payment to the insurer would purchase according to the correct age or sex. If the insurer overpays because of any such misstatement, the amount of overpayment with interest at the rate to be specified in the contract, but not exceeding six percent (6%) per annum, may be charged against the current or next succeeding payment the insurer makes under the contract.

 

(f) In a participating contract the insurer shall annually ascertain and apportion any divisible surplus accruing on the contract.

 

(g) The contract may be reinstated at any time within one (1) year from the default in making stipulated payments to the insurer, unless the cash surrender value has been paid. Any overdue stipulated payments and any indebtedness to the insurer on the contract shall be paid or reinstated with interest thereon at a rate to be specified in the contract but not exceeding six percent (6%) per annum payable annually. In applicable cases the insurer may also require evidence of insurability to its satisfaction.

 

26-16-118. Standard provisions for reversionary annuities.

 

 

(a) Except as otherwise provided in this section, no contract for a reversionary annuity shall be delivered or issued for delivery in this state unless it contains in substance:

 

(i) The provisions specified in W.S. 26-16-117, except that under W.S. 26-16-117 the insurer, at its option, may provide for an equitable reduction of the amount of the annuity payments in settlement of an overdue payment instead of providing for deduction of the payments from an amount payable upon settlement under the contract; and

 

(ii) A provision that the contract may be reinstated at any time within three (3) years from the date of default in making stipulated payments to the insurer, upon production of evidence of insurability satisfactory to the insurer, and upon condition that all overdue payments and any indebtedness to the insurer because of the contract be paid, or, within the limits permitted by the then cash values of the contract, reinstated with interest as to both payments and indebtedness at a rate to be specified in the contract but not exceeding six percent (6%) per annum compounded annually.

 

(b) This section does not apply to group annuities or to annuities included in life insurance policies, and any of those provisions not applicable to single premium annuities, to that extent, shall not be incorporated in the policies.

 

26-16-119. Provisions limiting liability in life insurance policies prohibited; exceptions.

 

(a) No life insurance policy shall be delivered or issued for delivery in this state if it contains any provision:

 

(i) Limiting the time within which an action at law or in equity may be commenced on the policy to less than three (3) years after the cause of action has accrued;

 

(ii) Which excludes or restricts liability for death caused in a certain specified manner or occurring while the insured has a specified status, except that a policy may contain provisions excluding or restricting coverage as specified therein in case of death under any of the following circumstances:

 

(A) Death as a result, directly or indirectly, of war, declared or undeclared, or of any act or hazard of a war or action;

 

(B) Death as a result of aviation or any air travel or flight;

 

(C) Death as a result of a specified hazardous occupation. Service in the military, naval or air forces or in civilian forces auxiliary thereto shall not be a specified hazardous occupation under this subparagraph;

 

(D) Death while the insured is a resident outside [the] continental United States and Canada; or

 

(E) Death within two (2) years from the date of issue of the policy as a result of suicide, while sane or insane.

 

(b) A policy which contains any exclusion or restriction pursuant to subsection (a) of this section shall also provide that in case of death under the circumstances to which the exclusion or restriction applies, the insurer shall pay an amount not less than a reserve determined according to the commissioners' reserve valuation method upon the basis of the mortality table and interest rate specified in the policy for the calculation of nonforfeiture benefits, or if the policy does not provide for such benefits, computed according to a mortality table and interest rate determined by the insurer and specified in the policy, with adjustment for indebtedness or dividend credit.

 

(c) This section does not apply to group life insurance, disability insurance, reinsurance or annuities, or to any provision in a life insurance policy or contract supplemental thereto relating to disability benefits or to additional benefits in case of death by accident or accidental means.

 

(d) Nothing in this section prohibits any provision which in the commissioner's opinion is more favorable to the policyholder than a provision permitted by this section.

 

26-16-120. Prohibited provisions generally in life insurance policies and industrial life insurance policies.

 

 

(a) No life insurance policy, other than industrial insurance, shall be issued or delivered in this state, or be issued by any domestic insurer, if it contains any provision:

 

(i) By which the policy purports to be issued or to take effect more than one (1) year before the original application for the insurance is made, if thereby the insured would rate at an age more than one (1) year younger than his insuring age at date when application is made;

 

(ii) For any mode of settlement at maturity of the policy of less value than the amount insured under the policy, plus dividend additions, if any, less any indebtedness to the insurer on or secured by the policy and less any premium that, by the terms of the policy, may be deducted. This paragraph does not apply to any nonforfeiture provisions which employ the cash value less indebtedness, if any, to purchase automatic paid-up or extended insurance, nor does it apply to graded death benefits in juvenile policies at ages one (1) to sixteen (16) years.

 

(b) No industrial life insurance policy shall contain any provision:

 

(i) By which the insurer may deny liability under the policy for the reason that the insured previously obtained other insurance from the same insurer;

 

(ii) Giving the insurer the right to declare the policy void because the insured:

 

(A) Has had any disease or ailment, whether specified or not, or because the insured has received institutional, hospital, medical or surgical treatment or attention, except a provision which gives the insurer the right to declare the policy void if the insured, within two (2) years prior to the issuance of the policy, received institutional, hospital, medical or surgical treatment or attention and if the insured or claimant under the policy fails to show that the condition occasioning that treatment or attention was not of a serious nature or was not material to the risk;

 

(B) Has been rejected for insurance, unless the right is conditioned upon the insurer showing that knowledge of the rejection would have led to the insurer's refusal to make the contract.

 

ARTICLE 2 - STANDARD NONFORFEITURE LAW

 

26-16-201. Short title; policy issue date.

 

 

(a) This article is known as the Standard Nonforfeiture Law for Life Insurance.

 

(b) For the purpose of this article the date of issue of a policy is the date on which the insured's rated age is determined.

 

26-16-202. Policy provisions.

 

 

(a) No life insurance policy, except as stated in W.S. 26-16-212, shall be delivered or issued for delivery in this state unless it contains provisions conforming in substance to each of the following provisions, or corresponding provisions which the commissioner determines are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements specified in this subsection and are essentially in compliance with W.S. 26-16-210:

 

(i) In case of default in any premium payment the insurer will grant, upon proper request not later than sixty (60) days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of the due date, in an amount as is specified in this article. Instead of the stipulated paid-up nonforfeiture benefit, the insurer, upon proper request not later than sixty (60) days after the due date of the premium in default, may substitute an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits;

 

(ii) Upon surrender of the policy within sixty (60) days after the due date of any premium payment in default after premiums have been paid for at least three (3) full years in the case of ordinary insurance or five (5) full years in the case of industrial insurance, the insurer will pay, instead of any paid-up nonforfeiture benefit, a cash surrender value in an amount as is specified in this article;

 

(iii) A specified paid-up nonforfeiture benefit is effective as specified in the policy unless the person entitled to make the election elects another available option not later than sixty (60) days after the due date of the premium in default;

 

(iv) If the policy is paid-up by completion of all premium payments or if it is continued under any paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance or the fifth policy anniversary in the case of industrial insurance, the insurer, upon surrender of the policy within thirty (30) days after any policy anniversary, will pay a cash surrender value in an amount as is specified in this article;

 

(v) In the case of policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate and method of use in calculating cash surrender values and the paid-up nonforfeiture benefits under the policy. All other policies shall contain a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary either during the first twenty (20) policy years or during the term of the policy, whichever is shorter, those values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on the policy;

 

(vi) A statement:

 

(A) That the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to the insurance law of the state in which the policy is delivered;

 

(B) Explaining the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the insurer on the policy;

 

(C) That the method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered, if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated in the policy; and

 

(D) Of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which the values and benefits are consecutively shown in the policy.

 

(b) Any provision or part thereof set forth in paragraphs (a)(i) through (vi) of this section, not applicable by reason of the insurance plan, to the extent inapplicable, may be omitted from the policy.

 

26-16-203. Cash surrender values.

 

 

(a) The insurer may reserve the right to defer the payment of any cash surrender value for a period of six (6) months after demand therefor with surrender of the policy.

 

(b) Cash surrender value shall be as follows:

 

(i) Any cash surrender value available under the policy in case of default in a premium payment due on any policy anniversary, whether or not required by W.S. 26-16-202, shall be an amount not less than the excess, if any, of the present value, on the anniversary of the future guaranteed benefits, including any existing paid-up additions, which would have been provided for by the policy if there had been no default, over the sum of:

 

(A) The then present value of the adjusted premiums as defined in W.S. 26-16-205 through 26-16-209 corresponding to premiums which would have fallen due on and after the anniversary; and

 

(B) The amount of any indebtedness to the insurer on the policy.

 

(ii) For any policy issued on or after the operative date of W.S. 26-16-209, which provides supplemental life insurance or annuity benefits at the insured's option and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value referred to in paragraph (i) of this subsection shall be an amount not less than the sum of the cash surrender value as defined in that paragraph for an otherwise similar policy issued at the same age without the rider or supplemental policy provision and the cash surrender value as defined in that paragraph for a policy which provides only the benefits otherwise provided by the rider or supplemental policy provision;

 

(iii) For any family policy issued on or after the operative date of W.S. 26-16-209, which defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse's age seventy-one (71), the cash surrender value referred to in paragraph (i) of this subsection shall be an amount not less than the sum of the cash surrender value as defined in that paragraph for an otherwise similar policy issued at the same age without the term insurance on the life of the spouse and the cash surrender value as defined in the paragraph for a policy which provides only the benefits otherwise provided by the term insurance on the life of the spouse;

 

(iv) Any cash surrender value available within thirty (30) days after any policy anniversary under any policy paid-up by completion of all premium payments or any policy continued under any paid-up nonforfeiture benefit, whether or not required by W.S. 26-16-202(a), shall be an amount not less than the present value, on the anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the insurer on the policy.

 

26-16-204. Paid-up nonforfeiture benefits.

 

Any paid-up nonforfeiture benefit available under the policy in case of default in a premium payment due on any policy anniversary shall be such that its present value as of the anniversary shall be at least equal to the cash surrender value then provided by the policy or, if none is provided, that cash surrender value which would have been required by this article in the absence of the condition that premiums be paid for at least a specified period.

 

26-16-205. Section applicability; adjusted premiums.

 

 

(a) This section does not apply to policies issued on or after the operative date of W.S. 26-16-209.

 

(b) Except as provided in W.S. 26-16-207, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the premiums specified in the policy for each policy year, excluding any extra premiums charged because of impairment or special hazards, that the present value, at the date of issue of the policy, of all the adjusted premiums shall be equal to the sum of:

 

(i) The then present value of the future guaranteed benefits provided by the policy;

 

(ii) Two percent (2%) of the amount of insurance, if the insurance is uniform in amount, or of the equivalent uniform amount, as otherwise defined in this article, if the amount of insurance varies with duration of the policy;

 

(iii) Forty percent (40%) of the adjusted premium for the first policy year;

 

(iv) Twenty-five percent (25%) of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less, except that in applying the percentages specified in paragraph (iii) of this subsection and this paragraph, no adjusted premium is deemed to exceed four percent (4%) of the amount of insurance or uniform amount equivalent thereto.

 

26-16-206. Varying amount of insurance based on policy duration; uniform equivalent.

 

 

(a) In the case of a policy providing an amount of insurance varying with duration of the policy, the equivalent uniform amount thereof for the purpose of W.S. 26-16-205 is the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the date of issue as the benefits under the policy.

 

(b) In the case of a policy providing a varying amount of insurance issued on the life of a child under age ten (10) the equivalent uniform amount may be computed as though the amount of insurance provided by the policy prior to the attainment of age ten (10) were the amount provided by the policy at age ten (10).

 

26-16-207. Adjustment of premiums for benefits provided by rider or supplemental policy provision.

 

 

(a) The adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provision shall be equal to:

 

(i) The adjusted premiums for an otherwise similar policy issued at the same age without the term insurance benefits, increased, during the period for which premiums for the term insurance benefits are payable, by;

 

(ii) The adjusted premiums for the term insurance. Paragraphs (a)(i) and (ii) of this section shall be calculated separately and as specified in W.S. 26-16-205 and 26-16-206, except that for the purposes of W.S. 26-16-205(b)(ii), (iii) and (iv), the amount of insurance or equivalent uniform amount of insurance used in the calculation of the adjusted premiums referred to in this paragraph shall be equal to the excess of the corresponding amount determined for the entire policy over the amount used in the calculation of the adjusted premiums in paragraph (a)(i) of this section.

 

26-16-208. Section applicability; calculation of certain adjusted premiums.

 

 

(a) This section does not apply to ordinary policies issued on or after the operative date of W.S. 26-16-209. All adjusted premiums and present values referred to in this article, for all policies of ordinary insurance, shall be calculated on the basis of the commissioners' 1958 standard ordinary mortality table, except that for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than six (6) years younger than the insured's actual age.

 

(b) Calculations for all policies of industrial insurance shall be made on the basis of the commissioners' 1961 standard industrial mortality table.

 

(c) All calculations shall be made on the basis of the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits. The rate of interest shall not exceed three and one-half percent (3 1/2%) per annum, except that a rate of interest not exceeding four percent (4%) per annum may be used for policies issued on or after July 1, 1975 and prior to May 20, 1981 and a rate of interest not exceeding five and one-half percent (5 1/2%) per annum may be used for policies issued on or after May 20, 1981.

 

(d) In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the commissioners' 1958 extended term insurance table in the case of ordinary insurance, and the commissioners' 1961 industrial extended term insurance table in the case of industrial policies.

 

(e) For insurance issued on a substandard basis, the calculation of any adjusted premiums and present values may be based on any mortality table the insurer specifies and the commissioner approves.

 

26-16-209. Section applicability; premium adjustment for any policy; annual calculation; exception.

 

 

(a) This section applies to policies issued on or after the operative date in subsection (n) of this section.

 

(b) Except as provided in subsection (h) of this section, the adjusted premiums for any policy shall be calculated on an annual basis and shall be the uniform percentage of the premiums specified in the policy for each policy year, excluding:

 

(i) Amounts payable as extra premiums to cover impairments or special hazards; and

 

(ii) Any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of:

 

(A) The then present value of the future guaranteed benefits provided by the policy;

 

(B) One percent (1%) of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years; and

 

(C) One hundred twenty-five percent (125%) of the nonforfeiture net level premium as otherwise defined in this section; and

 

(D) In applying the percentage specified in subparagraph (C) of this paragraph no nonforfeiture net level premium is deemed to exceed four percent (4%) of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years.

 

(c) The nonforfeiture net level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided by the policy divided by the present value, at the date of issue of the policy, of an annuity of one (1) per annum payable on the date of issue of the policy and on each policy anniversary on which a premium falls due.

 

(d) For policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of policy issue. At the time of any such change in the benefits or premiums the future adjusted premiums, nonforfeiture net level premiums and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change.

 

(e) Except as provided in subsection (h) of this section the recalculated future adjusted premiums for any such policy shall be the uniform percentage of the future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all the future adjusted premiums shall be equal to the excess of: The sum of the then present value of the then future guaranteed benefits provided for by the policy and the additional expense allowance, if any, over the then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy.

 

(f) The additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of:

 

(i) One percent (1%) of the excess, if positive, of the average amount of insurance at the beginning of each of the first ten (10) policy years after the change over the average amount of insurance prior to the change at the beginning of each of the first ten (10) policy years after the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and

 

(ii) One hundred twenty-five percent (125%) of the increase, if positive, in the nonforfeiture net level premium.

 

(g) The recalculated nonforfeiture net level premium shall be equal to the result obtained by dividing (i) by (ii) where:

 

(i) Equals the sum of:

 

(A) The nonforfeiture net level premium applicable prior to the change times the present value of an annuity of one (1) per annum payable on each anniversary of the policy on or after the date of the change on which a premium would have fallen due had the change not occurred; and

 

(B) The present value of the increase in future guaranteed benefits provided for by the policy; and

 

(ii) Equals the present value of an annuity of one (1) per annum payable on each policy anniversary on or after the date of change on which a premium falls due.

 

(h) Notwithstanding any provision of this section, for a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, the policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, adjusted premiums and present values may be calculated as if the policy were issued to provide the higher uniform amounts of insurance on the standard basis.

 

(j) All adjusted premiums and present values referred to in this article shall be calculated for all policies of ordinary insurance on the basis of the commissioners' 1980 standard ordinary mortality table or, at the election of the company for any one (1) or more specified life insurance plans, the commissioners' 1980 standard ordinary mortality table with ten-year select mortality factors; for all industrial insurance policies on the basis of the commissioners' 1961 standard industrial mortality table; and for all policies issued in a particular calendar year on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this section for policies issued in that calendar year, except that:

 

(i) At the insurer's option, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this subsection, for policies issued in the immediately preceding calendar year;

 

(ii) Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by W.S. 26-16-202(a), shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of the paid-up nonforfeiture benefit and paid-up dividend additions, if any;

 

(iii) A company may calculate the amount of any guaranteed paid-up nonforfeiture benefit including any paid-up additions under the policy on the basis of an interest rate not lower than that specified in the policy for calculating cash surrender values;

 

(iv) In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed shall not be more than those shown in the commissioners' 1980 extended term insurance table for policies of ordinary insurance and not more than the commissioners' 1961 industrial extended term insurance table for policies of industrial insurance;

 

(v) For insurance issued on a substandard basis, the calculation of the adjusted premiums and present values may be based on appropriate modifications of the tables specified in this subsection;

 

(vi) Any ordinary mortality tables the National Association of Insurance Commissioners adopts after 1980, that are approved by regulation the commissioner promulgates, for use in determining the minimum nonforfeiture standard, may be substituted for the commissioners' 1980 standard ordinary mortality table with or without ten-year select mortality factors or for the commissioners' 1980 extended term insurance table;

 

(vii) Any industrial mortality tables the National Association of Insurance Commissioners adopts after 1980, that are approved by regulation the commissioner promulgates, for use in determining the minimum nonforfeiture standard, may be substituted for the commissioners' 1961 standard industrial mortality table or the commissioners' 1961 industrial extended term insurance table.

 

(k) The nonforfeiture interest rate per annum for any policy issued in a particular calendar year is equal to one hundred twenty-five percent (125%) of the calendar year statutory valuation interest rate for such policy as defined in the standard valuation law rounded to the nearer one-fourth percent (1/4%).

 

(m) Notwithstanding any other provision in this code to the contrary, any refiling or nonforfeiture values or their methods of computation for any previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provisions of that policy form.

 

(n) After the effective date of this section, any insurer may file with the commissioner a written notice of its election to comply with this section after a specified date before January 1, 1989, and the date specified is the operative date of this section for the insurer, except that if an insurer does not make the election, the operative date of this section for the insurer is January 1, 1989. Before that date the election may be made on a product-by-product basis.

 

26-16-210. Determination of specified life insurance plan premiums and benefits.

 

 

(a) For any life insurance plan which provides for future premium determination, the amounts of which are to be determined by the insurer based on the then estimates of future experience, or for any life insurance plan which is of such a nature that minimum values cannot be determined by the methods described in W.S. 26-16-202 through 26-16-209, the commissioner shall be satisfied that:

 

(i) The benefits provided under the plan are substantially as favorable to policyholders and insureds as the minimum benefits otherwise required by W.S. 26-16-202 through 26-16-209;

 

(ii) The benefits and the pattern of premiums of that plan are not such as to mislead prospective policyholders or insureds.

 

(b) The cash surrender values and paid-up nonforfeiture benefits provided by the plan shall not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this article for life insurance, as determined by regulations the commissioner promulgates.

 

(c)(i) This subsection, in addition to all other applicable subsections of this section, applies to all policies issued on or after January 1, 1986. Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary shall be in an amount which does not differ by more than two-tenths of one percent (.2%) of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years, from the sum of (A) the greater of zero and the basic cash value as specified in this subsection and (B) the present value of any existing paid-up additions less the amount of any indebtedness to the insurer under the policy;

 

(ii) The basic cash value shall be equal to the present value, on such anniversary, of the future guaranteed benefits which would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the insurer, if there had been no default, less the then present value of the nonforfeiture factors, as specified in paragraph (iii) of this subsection, corresponding to premiums which would have fallen due on and after such anniversary. However, the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in W.S. 26-16-203 or 26-16-207, whichever is applicable, shall be the same as are the effects specified in W.S. 26-16-203 or 26-16-207, whichever is applicable on the cash surrender values defined in that subsection;

 

(iii) The nonforfeiture factor for each policy year shall be an amount equal to a percentage of the adjusted premium for the policy year, as defined in W.S. 26-16-205, 26-16-206 and 26-16-207 or in W.S. 26-16-209, whichever is applicable. Except as is required by subparagraph (A) of this paragraph, such percentage:

 

(A) Must be the same percentage for each policy year between the second policy anniversary and the later of (1) the fifth policy anniversary and (2) the first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least two-tenths of one percent (.2%) of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years; and

 

(B) Must be such that no percentage after the later of the two (2) policy anniversaries specified in subparagraph (A) of this paragraph may apply to fewer than five (5) consecutive policy years.

 

(iv) No basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, as defined in W.S. 26-16-205, 26-16-206 and 26-16-207 or in W.S. 26-16-209, whichever is applicable, were substituted for the nonforfeiture factors in the calculation of the basic cash value;

 

(v) All adjusted premiums and present values referred to in this subsection, for a particular policy, shall be calculated on the same mortality and interest bases as are used in demonstrating the policy's compliance with the other subsections of this section. The cash surrender values referred to in this subsection shall include any endowment benefits provided for by the policy;

 

(vi) Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment shall be determined in manners consistent with the manners specified for determining the analogous minimum amounts in W.S. 26-16-202, 26-16-203, 26-16-204, 26-16-209, and 26-16-211. The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those listed as paragraphs (i) through (vi) of this subsection shall conform with the principals of this section.

 

26-16-211. Calculating cash surrender and paid-up nonforfeiture benefits for premium default other than on policy anniversary.

 

 

(a) Any cash surrender value and any paid-up nonforfeiture benefit, available under the policy in case of default in a premium payment due at any time other than on the policy anniversary, shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in W.S. 26-16-203(b) through 26-16-209 may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall not be less than the amounts used to provide the additions. Notwithstanding W.S. 26-16-203(b), the following additional benefits payable shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this article and are not required to be included in any paid-up nonforfeiture benefits:

 

(i) In case of death or dismemberment by accident or accidental means;

 

(ii) In case of total and permanent disability;

 

(iii) As reversionary annuity or deferred reversionary annuity benefits;

 

(iv) As term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this section would not apply;

 

(v) As term insurance on the life of a child provided in a policy on the life of a parent of the child, if the term insurance expires before the child's age is twenty-six (26), is uniform in amount after the child's age is one (1) and is not paid-up because of the death of a parent of the child; and

 

(vi) As other policy benefits additional to life insurance and endowment benefits, and premiums for all the additional benefits.

 

26-16-212. Applicability of article.

 

 

(a) This article does not apply to any:

 

(i) Reinsurance;

 

(ii) Group insurance;

 

(iii) Pure endowment;

 

(iv) Annuity or reversionary annuity contract;

 

(v) Term policy of uniform amount which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of twenty (20) years or less expiring before age seventy-one (71), for which uniform premiums are payable during the entire term of the policy;

 

(vi) Term policy of decreasing amount which provides no guaranteed nonforfeiture or endowment benefits and on which each adjusted premium, calculated as specified in W.S. 26-16-205 through 26-16-209, is less than the adjusted premium so calculated, on a term policy of uniform amount, or renewal thereof, which provides no guaranteed nonforfeiture or endowment benefits, issued at the same age, for the same initial amount of insurance, and for a term of twenty (20) years or less expiring before age seventy-one (71), for which uniform premiums are payable during the entire term of the policy;

 

(vii) Policy which provides no guaranteed nonforfeiture or endowment benefits and for which no cash surrender value or present value of paid-up nonforfeiture benefit at the beginning of the policy year and calculated as specified in W.S. 26-16-203(b) through 26-16-209, exceed two and one-half percent (2 1/2%) of the amount of insurance at the beginning of the policy year. For purposes of paragraph (vi) of this subsection and this paragraph, the age at expiration of a joint term life insurance policy is the age at expiration of the oldest life; or

 

(viii) Policy which is delivered outside this state through an agent or other representative of the insurer issuing the policy.

 

ARTICLE 3 - NONFORFEITURE BENEFITS ON OLD POLICIES

 

26-16-301. Nonforfeiture benefits on old policies.

 

 

(a) In the case of policies referred to in W.S. 26-16-102 and issued prior to the operative date of article 2 of this chapter, there shall be a provision which, in case of default in premium payments after premiums are paid for three (3) years, shall secure to the policy owner, as a nonforfeiture benefit, a stipulated form of insurance, the net value of which is at least equal to the minimum life insurance reserve at the date of the default on the policy and on any dividend addition thereto, as required by article 2 of chapter 6 of this code, less a sum not more than two and one-half percent (2 1/2%) of the amount insured by the policy and of any existing dividend additions thereto, and less any existing indebtedness to the insurer on or secured by the policy.

 

(b) The net value specified in subsection (a) of this section shall be determined on the basis of a mortality table and rate of interest stated in the policy and acceptable for the valuation of the policy pursuant to the standard valuation law, except that if the mortality table is a more modern table than the American experience table of mortality, a mortality rate not more than one hundred thirty percent (130%) of the mortality rate according to the more modern table may be used in calculating any extended insurance, with accompanying pure endowment, if any, offered as a nonforfeiture benefit. If the mortality table used as the basis of determining the net value is the commissioners' 1958 standard ordinary mortality table, the mortality rates to be assumed in calculating any extended insurance, with accompanying pure endowment, if any, shall not be more than those shown in the commissioners' 1958 extended term insurance table.

 

(c) The provision specified in subsection (a) of this section shall:

 

(i) Stipulate that the policy may be surrendered to the insurer at its home office within one (1) month from date of default, for a specified cash value equal to the sum which would otherwise be available for the purchase of insurance as specified in subsection (a) of this section, and may stipulate that the insurer may defer payment for not more than six (6) months after the application therefor is made;

 

(ii) Contain a table showing the options available under the policy each year upon default in premium payments during the first twenty (20) years of the policy, or during the term of the policy whichever is shorter;

 

(iii) Not be required in term insurances of twenty (20) years or less or in industrial life insurance policies.

 

ARTICLE 4 - STANDARD NONFORFEITURE LAW FOR INDIVIDUAL DEFERRED ANNUITIES

 

26-16-401. Short title.

 

This article is known as the "Standard Nonforfeiture Law For Individual Deferred Annuities".

 

26-16-402. Applicability of article.

 

 

(a) This article does not apply to any:

 

(i) Reinsurance;

 

(ii) Group annuity purchased under a retirement plan or plan of deferred compensation established or maintained by an employer, an employee organization, or both, other than a plan providing individual retirement accounts or annuities under Section 408 of the Internal Revenue Code;

 

(iii) Premium deposit fund;

 

(iv) Variable annuity;

 

(v) Investment annuity;

 

(vi) Immediate annuity;

 

(vii) Deferred annuity contract after annuity payments have commenced;

 

(viii) Reversionary annuity; or

 

(ix) Contract which is delivered outside this state through an agent or other representative of the company issuing the contract.

 

26-16-403. Contract provisions.

 

(a) In the case of contracts issued on or after the operative date of this article as defined in W.S. 26-16-411, no annuity contract, except as stated in W.S. 26-16-402, shall be delivered or issued for delivery in this state unless it contains in substance the following provisions, or corresponding provisions which the commissioner determines are at least as favorable to the contract holder, upon cessation of payment of considerations under the contract or upon the written request of the contract owner:

 

(i) The company shall grant a paid-up annuity benefit on a plan stipulated in the contract of a value as is specified in W.S. 26-16-405 through 26-16-409;

 

(ii) If a contract provides for a lump sum settlement at maturity, or at any other time, that upon surrender of the contract at or prior to the commencement of any annuity payments, the company shall pay instead of any paid-up annuity benefit a cash surrender benefit in an amount as is specified in W.S. 26-16-405, 26-16-406, 26-16-408 and 26-16-409, provided the company may reserve the right to defer the payment of the cash surrender benefit for a period not to exceed six (6) months after demand therefore with surrender of the contract and after making written request and receiving the written approval of the commissioner. The request shall address the necessity and equitability to all policyholders of the deferral;

 

(iii) A statement of the mortality table and interest rates used in calculating any minimum paid-up annuity, cash surrender or death benefits that are guaranteed under the contract, together with sufficient information to determine the amounts of those benefits;

 

(iv) A statement that any paid-up annuity, cash surrender or death benefits available under the contract are not less than the minimum benefits required by any statute of the state in which the contract is delivered and an explanation of the manner in which the benefits are altered by the existence of any additional amounts the company credits to the contract, any indebtedness to the company on the contract or any prior withdrawals from or partial surrenders of the contract;

 

(v) Any contract which does not provide cash surrender benefits or does not provide death benefits at least equal to the minimum nonforfeiture amount prior to the commencement of any annuity payments shall include a statement in a prominent place in the contract that those benefits are not provided;

 

(vi) Notwithstanding the requirements of this section, any deferred annuity contract may provide that if no considerations are received under a contract for a period of two (2) full years and the portion of the paid-up annuity benefit at maturity on the plan stipulated in the contract arising from considerations paid prior to the period would be less than twenty dollars ($20.00) monthly, the company, at its option, may terminate the contract by payment in cash of the then present value of the portion of the paid-up annuity benefit, calculated on the basis of the mortality table and interest rate specified in the contract for determining the paid-up annuity benefit, and by that payment is relieved of any further obligation under the contract.

 

26-16-404. Minimum nonforfeiture amounts upon which certain minimum values are to be based.

 

(a) The minimum values as specified in W.S. 26-16-405 through 26-16-409 of any paid-up annuity, cash surrender or death benefits available under an annuity contract shall be based upon minimum nonforfeiture amounts as defined in subsections (b) through (f) of this section.

 

(b) The minimum nonforfeiture amounts shall be governed by the following:

 

(i) The minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be equal to an accumulation up to that time at rates of interest as provided in subsection (e) of this section of the net considerations paid prior to that time decreased by the sum of any prior withdrawals from or partial surrenders of the contract accumulated at rates of interest provided in subsection (e) of this section, an annual contract charge of fifty dollars ($50.00), accumulated at rates of interest as provided in subsection (e) of this section, and any premium tax paid by the company for the contract, accumulated at rates of interest as provided in subsection (e) of this section, and the amount of any indebtedness to the company on the contract, including interest due and accrued. The net considerations for a given contract year used to define the minimum nonforfeiture amount shall be an amount equal to eighty-seven and one-half percent (87 %) of the gross considerations credited to the contract during that contract year;

 

(ii) For contracts issued on or after July 1, 2003, and before July 1, 2007, the provisions of paragraph (i) of this subsection apply, except that the minimum nonforfeiture amount shall be based upon a rate of interest of one and one-half percent (1.5%) per annum.

 

(c) Repealed By Laws 2006, Chapter 6, 2.

 

(d) Repealed By Laws 2006, Chapter 6, 2.

 

(e) The interest rate used in determining minimum nonforfeiture amounts shall be an annual rate of interest determined as follows:

 

(i) The lesser of three percent (3%) per annum and the following, which shall be specified in the contract if the interest rate will be reset:

 

(A) The five (5) year constant maturity treasury rate reported by the federal reserve as of a date, or average over a period, rounded to the nearest one-twentieth of one percent (.05%), specified in the contract no longer than fifteen (15) months prior to the contract issue date or redetermination date under paragraph (iii) of this subsection;

 

(B) Reduced by one hundred twenty-five (125) basis points.

 

(ii) Notwithstanding paragraph (i) of this subsection, the resulting interest rate shall not be less than one percent (1%);

 

(iii) The interest rate shall apply for an initial period and may be redetermined for additional periods. The redetermination date, basis and period, if any, shall be stated in the contract. The basis is the date or average over a specified period that produces the value of the five (5) year constant maturity treasury rate to be used at each redetermination date.

 

(f) During the period or term that a contract provides substantive participation in an equity indexed benefit, it may increase the reduction described in subparagraph (e)(i)(B) of this section by up to an additional one hundred (100) basis points to reflect the value of the equity index benefit. The present value at the contract issue date, and at each redetermination date thereafter, of the additional reduction shall not exceed the market value of the benefit. The commissioner may require a demonstration that the present value of the additional reduction does not exceed the market value of the benefit. Lacking such a demonstration that is acceptable to the commissioner, the commissioner may disallow or limit the additional reduction.

 

(g) The commissioner may adopt rules to implement the provisions of subsection (f) of this section and to provide for further adjustments to the calculation of minimum nonforfeiture amounts for contracts that provide substantive participation in an equity index benefit and for other contracts that the commissioner determines are justified.

 

26-16-405. Present value of paid-up annuity benefits.

 

Any paid-up annuity benefit available under a contract shall be such that its present value on the date annuity payments are to commence is at least equal to the minimum nonforfeiture amount on that date. The present value shall be computed using the mortality table and the interest rate specified in the contract for determining the minimum paid-up annuity benefits guaranteed in the contract.

 

26-16-406. Calculating cash surrender benefits available prior to contract maturity.

 

 

(a) For contracts which provide cash surrender benefits, cash surrender benefits available prior to maturity shall not be less than an amount determined as follows:

 

(i) Determine the present value as of the date of surrender of that portion of the maturity value of the paid-up annuity benefit which would be provided under the contract at maturity, arising from considerations paid prior to the time of cash surrender;

 

(ii) The amount determined in paragraph (i) of this subsection shall be reduced by the amount appropriate to reflect any prior withdrawals from or partial surrenders of the contract with the present value being calculated on the basis of an interest rate not more than one percent (1%) higher than the interest rate specified in the contract for accumulating the net considerations to determine the maturity value;

 

(iii) The amount determined in paragraph (ii) of this subsection shall be decreased by the amount of any indebtedness to the company on the contract, including interest due and accrued; and

 

(iv) The amount determined in paragraph (iii) of this subsection shall be increased by any existing additional amounts credited by the company to the contract. In no case shall any cash surrender benefit be less than the minimum nonforfeiture amount at that time. The death benefit under the contracts shall be at least equal to the cash surrender benefit.

 

26-16-407. Minimum paid-up annuity benefit available as a nonforfeiture option.

 

For contracts which do not provide cash surrender benefits, the present value of any paid-up annuity benefit available as a nonforfeiture option at any time prior to maturity shall not be less than the present value of that portion of the maturity value of the paid-up annuity benefit provided under the contract arising from considerations paid prior to the time the contract is surrendered in exchange for, or changed to, a deferred paid-up annuity, with the present value being calculated for the period prior to the maturity date on the basis of the interest rate specified in the contract for accumulating the net considerations to determine the maturity value, and increased by any existing additional amounts credited by the company to the contract. For contracts which do not provide any death benefits prior to the commencement of any annuity payments, the present values shall be calculated on the basis of the interest rate and the mortality table specified in the contract for determining the maturity value of the paid-up annuity benefit. The present value of a paid-up annuity benefit shall not be less than the minimum nonforfeiture amount at that time.

 

26-16-408. Annuity contract optional maturity dates.

 

For the purpose of determining the benefits calculated under W.S. 26-16-406 and 26-16-407 in the case of annuity contracts under which an election may be made to have annuity payments commence at optional maturity dates, the maturity date is the latest date for which election is permitted by the contract, but not later than the anniversary of the contract immediately following the annuitant's seventieth birthday or the tenth anniversary of the contract, whichever is later.

 

26-16-409. Calculating benefits under contracts with fixed schedule considerations.

 

Any paid-up annuity, cash surrender or death benefits available at any time, other than on the contract anniversary, under any contract with fixed scheduled considerations, shall be calculated with allowance for the lapse of time and the payment of any scheduled considerations beyond the beginning of the contract year in which cessation of payment of considerations under the contract occurs.

 

26-16-410. Calculating minimum annuity and life insurance nonforfeiture benefits when included by rider or supplemental contract provision.

 

For any contract which provides therein, by rider or supplemental contract provision, both annuity benefits and life insurance benefits that exceed the greater of cash surrender benefits or a return of the gross considerations with interest, the minimum nonforfeiture benefits shall be equal to the sum of the minimum nonforfeiture benefits for the annuity portion and the minimum nonforfeiture benefits, if any, for the life insurance portion computed as if each portion were a separate contract. Notwithstanding W.S. 26-16-405 through 26-16-409 additional benefits payable in case of total and permanent disability, as reversionary annuity or deferred reversionary annuity benefits or as other policy benefits additional to life insurance, endowment and annuity benefits, and considerations for all those additional benefits, shall be disregarded in ascertaining the minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits required by this article. The inclusion of the additional benefits is not required in any paid-up benefits, unless the additional benefits separately would require minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits.

 

26-16-411. Operative date of article.

 

(a) After May 20, 1981, any company may file with the commissioner a written notice of its election to comply with this article after a specified date before May 20, 1983. After filing the notice, then upon the specified date, which is the operative date of this article for that company, this article is operative with respect to annuity contracts thereafter issued by that company. If a company does not make an election, the operative date of this article for that company is May 20, 1983.

 

(b) Beginning July 1, 2006, any company may elect to apply the provisions of this article on a contract form by contract form basis to all annuity contracts thereafter issued.

 

(c) On or after July 1, 2007, this article is operative with respect to all annuity contracts thereafter issued.

 

ARTICLE 5 - MISCELLANEOUS PROVISIONS

 

26-16-501. Incontestability and limitation of liability after reinstatement.

 

 

(a) A reinstated life insurance policy or annuity contract may be contested because of fraud or misrepresentation of facts material to the reinstatement only for the same period following reinstatement and with the same conditions and exceptions as the policy provides for contestability after original issuance.

 

(b) If any life insurance policy or annuity contract is reinstated, the reinstated policy or contract may exclude or restrict liability to the same extent that the liability could have been or was excluded or restricted when the policy or contract was originally issued. The exclusion or restriction is effective from the date of reinstatement.

 

26-16-502. Allocation to separate accounts to provide for life insurance or annuities; regulation of variable contracts.

 

 

(a) A domestic life insurer may establish one (1) or more separate accounts and may allocate to those accounts amounts, including without limitation proceeds applied under optional modes of settlement or under dividend options, to provide for life insurance or annuities and benefits incidental thereto, payable in fixed or variable amounts or both, subject to the following:

 

(i) The income and any gains and losses from assets allocated to a separate account shall be credited to or charged against the account, without regard to the insurer's other income, gains or losses;

 

(ii) Except as may be provided with respect to reserves for guaranteed benefits and funds referred to in paragraph (iii) of this subsection, amounts allocated to any separate account and accumulations thereon may be invested and reinvested without regard to any requirements or limitations prescribed by the laws of this state governing the investments of life insurance companies, and the investments in the separate accounts shall not be considered in applying the investment limitations otherwise applicable to the insurer's investments;

 

(iii) Except with the commissioner's approval and under conditions he prescribes as to investments and other matters, which conditions shall recognize the guaranteed nature of the benefits provided, reserves for benefits guaranteed as to dollar amount and duration and funds guaranteed as to principal amount or stated rate of interest shall not be maintained in a separate account;

 

(iv) Unless the commissioner otherwise approves:

 

(A) Assets allocated to a separate account shall be valued at their market value on the date of valuation, or if there is no readily available market, then as provided under the terms of the contract or the rules or other written agreement applicable to the separate account;

 

(B) The portion, if any, of the assets of the separate account which are equal to the insurer's reserve liability with regard to the guaranteed benefits and funds referred to in paragraph (iii) of this subsection shall be valued in accordance with the rules otherwise applicable to the insurer's assets.

 

(v) The insurer shall own amounts allocated to a separate account under this section and shall not be nor hold itself out to be a trustee with respect to those amounts;

 

(vi) If and to the extent provided under the applicable contracts, that portion of the assets of any separate account equal to the reserves and other contract liabilities with respect to the account are not chargeable with liabilities arising out of any other business the insurer conducts;

 

(vii) No insurer shall sell, exchange or otherwise transfer its assets between any of its separate accounts, or between any other investment account and one (1) or more of its separate accounts unless:

 

(A) In case of a transfer into a separate account, the transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made;

 

(B) The transfer, whether into or from a separate account, is made by a transfer of cash or by a transfer of securities having a readily determinable market value; and

 

(C) The commissioner approves the transfer of securities, provided the commissioner may approve other transfers among the accounts if, in his opinion, the transfers are not inequitable.

 

(viii) To the extent deemed necessary to comply with any applicable federal or state laws, the insurer, with respect to any separate account, including without limitation any separate account which is a management investment company or a unit investment trust, may provide for persons having an interest therein appropriate voting and other rights and special procedures for the conduct of the business of the account, including special rights and procedures relating to investment policy, investment advisory services, selection of independent public accountants and the selection of a committee, the members of which need not be otherwise affiliated with the insurer, to manage the business of the account.

 

(b) Any contract providing benefits payable in variable amounts delivered or issued for delivery in this state shall contain a statement of the essential features of the procedures the insurer is to follow in determining the dollar amount of the variable benefits. The contract under which the benefits vary to reflect investment experience, including a group contract and any certificate in evidence of variable benefits issued thereunder, shall state that the dollar amount will vary and shall contain on its first page a statement to the effect that the benefits thereunder are on a variable basis.

 

(c) No insurer shall deliver or issue for delivery within this state variable contracts unless it is licensed to do a life insurance or annuity business in this state, and the commissioner is satisfied that its condition or method of operation in connection with the issuance of the contracts will not render its operation hazardous to the public or its policyholders in this state. In this connection, the commissioner shall consider among other things:

 

(i) The insurer's history and financial condition;

 

(ii) The character, responsibility and fitness of the insurer's officers and directors; and

 

(iii) The law and regulation under which the insurer is authorized in the state of domicile to issue variable contracts. The state of entry of an alien insurer is its place of domicile for this purpose. If the insurer is a subsidiary of an admitted life insurer, or affiliated with that insurer through common management or ownership, it may be deemed by the commissioner to have met the provisions of this subsection if either it or the parent or the affiliated insurer meets the requirements thereof.

 

(d) Notwithstanding any other provision of law, the commissioner has sole authority to:

 

(i) Regulate the issuance and sale of variable contracts; and

 

(ii) Issue reasonable rules and regulations appropriate to carry out the purposes of this section.

 

(e) Except for W.S. 26-16-117(a), (b) and (g), 26-16-118 and article 2 of this chapter in the case of a variable annuity contract and W.S. 26-16-103, 26-16-108 through 26-16-110, 26-16-201 through 26-16-212 and 26-17-111 in the case of a variable life insurance contract and except as otherwise provided in this section, all pertinent provisions of this code apply to separate accounts and contracts relating thereto. Any individual variable life insurance contract delivered or issued for delivery in this state shall contain grace, reinstatement and nonforfeiture provisions appropriate to the contract. Any individual variable annuity contract delivered or issued for delivery in this state shall contain grace and reinstatement provisions appropriate to the contract. Any group variable life insurance contract delivered or issued for delivery in this state shall contain a grace provision appropriate to the contract. The reserve liability for variable contracts shall be established in accordance with actuarial procedures that recognize the variable nature of the benefits provided and any mortality guarantees.

 

26-16-503. Insurer issuing participating and nonparticipating policies; records.

 

 

(a) Any life insurer issuing both participating and nonparticipating policies shall maintain any accounting records necessary for it to determine dividends to participating policyholders on an equitable basis.

 

(b) In the accounting records the insurer shall make a reasonable allocation as between participating and nonparticipating policies of the expenses of the general operations or functions as are jointly shared. Any allocation of expense as between categories shall be made upon a reasonable basis, to the end that each category shall bear a just portion of joint expense involved in the administration of the business of that category.

 

(c) No policy shall provide for and no life insurer or representative shall knowingly offer or promise payment, credit, or distribution of participating "dividends", "earnings", "profits" or "savings", by whatever name called, to participating policies out of the profits, earnings or savings on nonparticipating policies. This provision does not restrict the generality of W.S. 26-13-110.

 

26-16-504. Policy plans prohibited.

 

 

(a) No life insurer shall deliver or issue for delivery in this state:

 

(i) 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 the contract, which provides for the accumulation of profits over a period of years and for payment of any of the 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;

 

(ii) Any policy purporting to be "registered" or otherwise specially recorded with any agency of the state of Wyoming, 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 for the special benefit or protection of the holder of the policy by or through the agency or institution;

 

(iii) 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, mortality savings, lapses or surrenders, in excess of the normal reserves or amounts required to pay death, endowment and nonforfeiture benefits in amounts as specified in or pursuant to the policy or contract, are on a basis not involving insurance or life contingency features to be placed in special funds, segregated accounts or specially designated places or to be invested in specially designated investments or types thereof, and the funds or earnings thereon to be divided among the holders of the policies or contracts, or their beneficiaries or assignees;

 

(iv) Any policy providing for the segregation of policyholders into mathematical groups and providing benefits for a surviving policyholder arising out of the death of another policyholder of the group, or under any other similar plan;

 

(v) Any policy providing benefits or values for surviving or continuing policyholders contingent upon the lapse or termination, for any reason, of the policies of other policyholders;

 

(vi) Any policy containing or referring to:

 

(A) Investment returns or profit-sharing, other than as a participation in the insurer's divisible surplus under a regular participation provision as provided for in W.S. 26-16-107;

 

(B) Special treatment in the determination of any dividend that may be paid as to the policy;

 

(C) Premiums as "deposits";

 

(D) Policyholder interest or returns to those of stockholders;

 

(E) The policyholder as a member of a select group who is entitled to extra benefits or extra dividends not available to policyholders generally;

 

(F) Any label, name or description of the policy as a "founders", "charter" or "coupon" policy, or name of similar connotation.

 

(vii) Any policy which in addition to basic life insurance benefits provides for or is combined with a series of coupons, or with a passbook or other device generally associated with securities investments, or with savings, banking or investment institutions.

 

(b) This section does not prohibit the provision, payment, allowance or apportionment of dividends or "savings" under regular participating forms of policies or contracts.