(a) A supplemental illustration may be provided if it meets all of the following requirements:

(1) It is appended to, accompanied by, or preceded by a basic illustration that complies with this chapter.

Terms Used In California Insurance Code 10509.957

  • Basic illustration: means a ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements. See California Insurance Code 10509.953
  • Contract: A legal written agreement that becomes binding when signed.
  • Contract premium: means the gross premium that is required to be paid under a fixed premium policy, including the premium for a rider for which benefits are shown in the illustration. See California Insurance Code 10509.953
  • Guaranteed elements: means the premiums, benefits, values, credits or charges under a policy of life insurance that are guaranteed and determined at issue. See California Insurance Code 10509.953
  • Illustration: means a presentation or depiction that includes nonguaranteed elements of a policy of life insurance over a period of years and that is one of the three types defined below:

    California Insurance Code 10509.953

  • Policy owner: means the owner named in the policy or the certificate holder in the case of a group policy. See California Insurance Code 10509.953
  • Premium outlay: means the amount of premium assumed to be paid by the policy owner or other premium payer out-of-pocket. See California Insurance Code 10509.953
  • Supplemental illustration: means an illustration furnished in addition to a basic illustration that meets the applicable requirements of this regulation, and that may be presented in a format differing from the basic illustration, but may only depict a scale of nonguaranteed elements that is permitted in a basic illustration. See California Insurance Code 10509.953

(2) The nonguaranteed elements shown are not more favorable to the policy owner than the corresponding elements based on the scale used in the basic illustration.

(3) It contains the same statement as required of a basic illustration under subdivision (d) of Section 10509.956 that nonguaranteed elements are not guaranteed.

(4) For a policy that has a contract premium, the contract premium underlying the supplemental illustration is equal to the contract premium shown in the basic illustration. For policies that do not require a contract premium, the premium outlay underlying the supplemental illustration shall be equal to the premium outlay shown in the basic illustration.

(b) The supplemental illustration shall include a notice referring to the basic illustration for guaranteed elements and other important information.

(c) If cost indices are required by Chapter 5.6 (commencing with Section 10509.970), they may be provided by means of a supplemental illustration or included in the basic illustration. Those indices shall be based on nonguaranteed elements calculated according to the standards required in this chapter.

(Added by Stats. 1996, Ch. 1106, Sec. 1. Effective January 1, 1997. Section operative July 1, 1997, pursuant to Section 10509.965.)

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