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23-81-212. Calculation of cash surrender value in event of default.
Arkansas Code — all titles (historical 2020) · legal_authorities
23-81-212. Calculation of cash surrender value in event of default.
(a) In addition to all other applicable sections of this subchapter, this section shall apply to all policies issued on or after January 1, 1985.
(b) 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 (0.2%) 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:
(1) The greater of zero (0) and the basic cash value specified in subsection (c) of this section; and
(2) The present value of any existing paid-up additions, less the amount of any indebtedness to the company under the policy.
(c)(1) The basic cash value shall be equal to the present value, on the 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 defined in subsection (d) of this section, corresponding to premiums which would have fallen due on and after the anniversary.
(2) However, the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in § 23-81-204, shall be the same as are the effects specified in that section on the cash surrender values defined therein.
(d) 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 § 23-81-209. Except as is required by su
Source: Arkansas Code — historical release 78 (November 6, 2020) · 23-81-212
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. A text match is a research starting point; applicability is not established.
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Stable record: arkansas_code:legal_authorities:23-81-212
Source file: gov.ar.code.title.23.odt
Pages: Not recorded – Not recorded
Passage SHA-256: 767f7d5803a6ca9370cd78ecfb49dd0e541f503935c807353d45a6b2f40ed214
Source location: content.xml paragraph 49145
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23-81-212. Calculation of cash surrender value in event of default.
(a) In addition to all other applicable sections of this subchapter, this section shall apply to all policies issued on or after January 1, 1985.
(b) 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 (0.2%) 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:
(1) The greater of zero (0) and the basic cash value specified in subsection (c) of this section; and
(2) The present value of any existing paid-up additions, less the amount of any indebtedness to the company under the policy.
(c)(1) The basic cash value shall be equal to the present value, on the 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 defined in subsection (d) of this section, corresponding to premiums which would have fallen due on and after the anniversary.
(2) However, the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in § 23-81-204, shall be the same as are the effects specified in that section on the cash surrender values defined therein.
(d) 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 § 23-81-209. Except as is required by subsection (e) of this section, the percentage must be:
(1) The same percentage for each policy year between the second policy anniversary and the later of the fifth policy anniversary and 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 (0.2%) 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; and
(2) Such that no percentage after the later of the two (2) policy anniversaries specified in subdivision (d)(1) of this section, and no percentage may apply to fewer than five (5) consecutive policy years.
(e) However, no basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, as defined in § 23-81-209, were substituted for the nonforfeiture factors in the calculation of the basic cash value.
(f)(1) All adjusted premiums and present values referred to in this section 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 sections of this subchapter.
(2) The cash surrender values referred to in this section shall include any endowment benefits provided for by the policy.
(g)(1) 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 §§ 23-81-203 — 23-81-205, 23-81-209, and 23-81-211.
(2) The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those listed in § 23-81-211(d) shall conform with the principles of this section.
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Arkansas Code — all titles (historical 2020) · legal_authorities
23-81-203. Nonforfeiture provisions.
(a) In the case of policies issued on and after the operative date as defined in § 23-81-213(a), no policy of life insurance, except as stated in § 23-81-202, shall be delivered or issued for delivery in this state unless it shall contain in substance the following provisions, or corresponding provisions which in the opinion of the Insurance Commissioner are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements specified in this section and are essentially in compliance with § 23-81-212:
(1) In the event 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, of such amount as may be specified. In lieu of the stipulated paid-up nonforfeiture benefit, the insurer may substitute, upon proper request not later than sixty (60) days after the due date of the premium in default, 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;
(2) 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, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as may be specified;
(3) A specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entit
Source: Arkansas Code — historical release 78 (November 6, 2020) · 23-81-203
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 23-81-203. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
23-81-204. Cash surrender value.
(a) Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary, whether or not required by § 23-81-203, shall be an amount not less than the excess, if any, of the present value, on the anniversary, of the future guaranteed benefits which would have been provided for by the policy, including any existing paid-up additions, if there had been no default, over the sum of:
(1) The then-present value of the adjusted premiums as defined in §§ 23-81-206 — 23-81-209 corresponding to premiums which would have fallen due on and after the anniversary; and
(2) The amount of any indebtedness to the insurer on the policy.
(b) However, for any policy issued on or after the operative date of § 23-81-207 as defined therein, which provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value as defined in the section 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 the section for a policy which provides only the benefits otherwise provided by the rider or supplemental policy provision.
(c) For any family policy issued on or after the operative date of § 23-81-207 as defined therein, 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 subsection (a) of this section shall be an amount not less than the sum of the cash surrender value as defined in the section for an otherwise similar policy issued at the
Source: Arkansas Code — historical release 78 (November 6, 2020) · 23-81-204
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 23-81-204. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
23-81-205. Certain paid-up benefits.
Any paid-up nonforfeiture benefit available under the policy in the event 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 for by the policy or, if none is provided for, that cash surrender value which would have been required by this subchapter in the absence of the condition that premiums shall have been paid for at least a specified period.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 23-81-205
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 23-81-205. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
23-81-209. Calculation of adjusted premiums and present values — All policies issued on or after operative date of § 23-81-213(d).
(a)(1) This section shall apply to all policies issued on or after the operative date of § 23-81-213(d) as defined therein.
(2) Except as provided in subsection (g) of this section, the adjusted premiums for any policy shall be calculated on an annual basis and shall be the uniform percentage of the respective premiums specified in the policy for each policy year, excluding:
(A) Amounts payable as extra premiums to cover impairments or special hazards; and
(B) 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:
(i) The then-present value of the future guaranteed benefits provided for by the policy;
(ii) 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
(iii) One hundred twenty-five percent (125%) of the nonforfeiture net level premium as defined in this section.
(3) However, in applying the percentage specified in subdivision (a)(2)(B)(iii) of this section, no nonforfeiture net level premium shall be 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.
(4) The date of issue of a policy for the purpose of this subchapter shall be the date as of which the rate age of the insured is determin
Source: Arkansas Code — historical release 78 (November 6, 2020) · 23-81-209
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 23-81-209. This identifies an authority to review, not proof of applicability.