§431:10D-501 Purpose and scope. (a) The purpose of this part is to:
(1) Regulate the activities of insurers and producers with respect to the replacement of existing life insurance and annuities; and
(2) Protect the interests of life insurance and annuity purchasers by establishing minimum standards of conduct to be observed in replacement or financed purchase transactions that will:
(A) Assure that purchasers receive information with which a decision can be made in the purchasers' best interests;
(B) Reduce the opportunity for misrepresentation and incomplete disclosure; and
(C) Establish penalties for failure to comply with requirements of this part.
(b) Unless otherwise specifically included, this part shall not apply to transactions involving:
(1) Credit life insurance;
(2) Group life insurance or group annuities where there is no direct solicitation of individuals by an insurance producer. Direct solicitation shall not include any group meeting held by an insurance producer solely for the purpose of educating or enrolling individuals when initiated by an individual member of the group assisting with the selection of investment options offered by a single annuity provider in connection with enrolling the individuals. Group life insurance or group annuity certificates marketed through direct-response solicitation shall be subject to section 431:10D-507;
(3) Group life insurance used to fund prearranged funeral contracts;
(4) An application to the existing insurer that issued the existing policy or contract when a contractual change or a conversion privilege is being exercised; or, when the existing policy or contract is being replaced by the same insurer pursuant to a program filed with and approved by the commissioner; or, when a term conversion privilege is exercised among corporate affiliates;
(5) Proposed life insurance that is to replace life insurance under a binding or conditional receipt issued by the same company;
(6) Policies or contracts used to fund:
(A) An employee pension or welfare benefit plan that is covered by the Employee Retirement and Income Security Act (ERISA);
(B) A plan described by sections 401(a), 401(k) or 403(b) of the Internal Revenue Code of 1986, as amended, where the plan, for purposes of ERISA, is established or maintained by an employer;
(C) A governmental or church plan defined in section 414 of the Internal Revenue Code of 1986, as amended, a governmental or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax exempt organization under section 457 of the Internal Revenue Code of 1986, as amended; or
(D) A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor;
provided that, notwithstanding the exemptions listed in subparagraphs (A) to (D), this part shall apply to policies or contracts used to fund any plan or arrangement that is funded solely by contributions an employee elects to make, whether on a pre-tax or after-tax basis, and where the insurance company has been notified that plan participants may choose from among two or more annuity providers or policy providers and there is a direct solicitation of an individual employee by an insurance producer for the purchase of a contract or policy. As used in this subsection, direct solicitation shall not include any group meeting held by an insurance producer solely for the purpose of educating individuals about the plan or arrangement or enrolling individuals in the plan or arrangement or, when initiated by an individual employee assisting with the selection of investment options offered by a single annuity provider in connection with enrolling that individual employee;
(7) Where new coverage is provided under a life insurance policy or contract and the cost is borne wholly by the insured's employer or by an association of which the insured is a member;
(8) Existing life insurance that is a non-convertible term life insurance policy that will expire in five years or less and cannot be renewed;
(9) Immediate annuities that are purchased with proceeds from an existing contract; provided that immediate annuities purchased with proceeds from an existing policy are not exempted from the requirements of this part; and
(10) Structured settlements.
(c) Registered contracts shall be exempt from the requirements of sections 431:10D-505(a)(2) and 431:10D-506(2) with respect to the provision of illustrations or policy summaries; however, premium or contract contribution amounts and identification of the appropriate prospectus or offering circular shall be required instead. [L 2000, c 252, pt of §3; am L 2008, c 155, §4]
Section: Previous 431-10d-406 431-10d-407 431-10d-408 431-10d-409 431-10d-410 431-10d-411 431-10d-412 431-10d-501 431-10d-502 431-10d-503 431-10d-504 431-10d-505 431-10d-506 431-10d-507 431-10d-508 NextLast modified: October 27, 2016