TN Insurance Bulletin (1989-09-01): Return of Premium Rider or Withdrawal Benefits

STATE OF TENNESSEE DEPARTMENT OF COMMERCE AND INSURANCE 500 JAMES ROBERTSON PARKWAY NASHVILLE, TENNESSEE 37219 NED McWHERTER GOVERNOR ELAINE A. McREYNOLDS COMMISSIONER I -.. B U L L E T I N TO: All Life and Insurers Doing Business in Tennessee FR: David J. Kumat~~ Assistant Comm~n;; for Insurance RE: Return of Premium Rider or Withdrawal Benefits DA: September 1, 1989 The amendments to Chapter 0780-1-29 of the Department's regulations, dealing with accident and health policies which provide for return of premium or withdrawal benefits, have been approved by the Attorney General. Attached you will find a copy of the rule amendments as promulgated. Briefly, the amendments: 1. Eliminate the restriction that the benefit could only be added to disability income or hospital indemnity contracts. 2. Eliminate the prohibition against a periodic deferred benefit payable at the end of specified periods (such as 10 years) during the premium paying period. DJK/cmf .·. • RULEMAKING HEARING RULES OF Page l of 4 ?ages THE DEPARTMENT OF COMMERCE AND INSURANCE DIVISION OF INSURANCE CHAPTER 0780-1-29 ACCIDENT AND HEALTH POLICIES PROVIDING RETURN OF PREMIUM OR WITHDRAWAL BENEFITS 0780-1-29-.01 0780-1-29-.02 0780-1-29-.03 0780-1-29-.04_ 0780-1-29-.05 0780-1-29-.06 TABLE OF CONTE~TS Types of Benefits Policy to Which Such Benefits May Be Attached Premiums for Benefits Must Be Separately • Stated Withdrawal and Death Benefits Premium~ Waived and Policy Dividends Additional Premiums for Return of Premium Benefits 0780-1-29-.07 Reserves for Return of Premium Benefits Rule 0780-1-29.01 TYPES OF BENEFIT i~ amended by dele~ing the following language from the end of the first sentence in said rule and the letter (a) from paragraph (a) of said rule: the following benefits, in addition to disability income or hospital indemnity income benefits: idends Additional Premiums for Return of Premium Benefits 0780-1-29-.07 Reserves for Return of Premium Benefits Rule 0780-1-29.01 TYPES OF BENEFIT i~ amended by dele~ing the following language from the end of the first sentence in said rule and the letter (a) from paragraph (a) of said rule: the following benefits, in addition to disability income or hospital indemnity income benefits: (a) and, is also amended by deleting the following language, being the last sentence of Subparagraph (a) of said rule and, subparag~aph (b) of said rule: Such an additional benefit is permitted only under policies which provide benefits limited to disability income or hospital indemnity income. (b) A deferred benefit payable periodically at the end of specified periods (such as 10 years) during the premium- paying period is not permitted. so that as amended the rule shall read: 0780-1-29-.01 TYPES OF BENEFIT. This rule applies to individual accident and health policies providing a deferred benefit payable at the ex?iration date of the policy or after a specified date(s) based upon an amount equal to all or a stated portion, not less ~han 807., of the total . r-•· . :-: -- ..... . ... -- -r-- -·--·-·-~-·----- -:-.-- ------ • .. ~ -- -._,;._ ... _, Page 2 of ~ ?ages premiums paid on the policy, reduced by all or a specified portion, not less than 207., of the total claims paid under the policy. 0780-1-29-.03 PREMIUMS FOR BENEFITS MUST BE SEPARATELY STATED is amended by changing the citation of Section 0780- 1-29-.01(a) to Section 0780-l-29-.0l, so that as amended the rule shall read: 0780-l-29-.03 PREMIUMS FOR BENEFITS MUST BE SEPARATELY STATED. The additional premium for the benefit defined in 0780- 1-29-.01 must be separately stated either in the policy or rider attached thereto. Statutory Authority: T.C.A. Section 56-1-701 and Section 56-26-114 ded by changing the citation of Section 0780- 1-29-.01(a) to Section 0780-l-29-.0l, so that as amended the rule shall read: 0780-l-29-.03 PREMIUMS FOR BENEFITS MUST BE SEPARATELY STATED. The additional premium for the benefit defined in 0780- 1-29-.01 must be separately stated either in the policy or rider attached thereto. Statutory Authority: T.C.A. Section 56-1-701 and Section 56-26-114. (The remainder o£ the rule is omitted.) Signature of the agency officer or officers directly responsible for~proposing and/or drafting these rules. sistant Chief Counsel for Insurance I certify that this an accurate and complete copy of the rulemaking hearing rules lawfully promulgated by the Department of Commerce and Insurance on .the 22-nd day of February, 1989. Further, I certify that these rules are prop rly presented for filing, ~notice of rulemaking hearing having been published in the November, 1988 issue of the Tennessee Administrative Register, and such rulemaking hearing having been conducted pursuant thereto on the 30th day of November, 1988. J~ G. Davis ~istant Ch~ef Counsel for Insurance ~ 1. "-- "'- / --· ...... --·---·--- I • Page 3 of 4 Pages .' S· u b s c r i b e A,. and s w o r n t: o b e f o r e me t h i s t: he J t·~· ,.i c /) I I , l 9 ... X';....;..? ________ . • , I Notary/t'ubiic /'~J!cl _My Commission expires on the ;(,:} -day of ';.?/}:I,...(,!~ A../ 1 9 q '1' ~~~~~~~~~-----------' -·-·---- day of All rulemaking hearing rules provided herein have been examined by the Attorney General and Report:er of the Stat:e of Tennessee and are approved as to legalit:y pursuant: t:o t:he provisions of the Administ:rative Procedures Act, Tennessee Code Annot:at:ed, Title 4, Chapter 5. ~~ Charles W. Burson Attorney General and Reporter ... . ~. 1 9 q '1' ~~~~~~~~~-----------' -·-·---- day of All rulemaking hearing rules provided herein have been examined by the Attorney General and Report:er of the Stat:e of Tennessee and are approved as to legalit:y pursuant: t:o t:he provisions of the Administ:rative Procedures Act, Tennessee Code Annot:at:ed, Title 4, Chapter 5. ~~ Charles W. Burson Attorney General and Reporter ... . ~. ' · • Page 4 of 4 Pages The rulemaking hearing rules set out herein were properly filed in the Administra~~ Procedu~sion the Department of State on the day of , 19 ~ Ge~nry Cro~~lt"' ' 0 { Secretary o~ State .i!..'L :· .~ c :.;.-.ii'/ l __ ~ ii~iS :. .... ~ ·-· - .. ~ . .:;u ""'< . •. · -' --- · ·, .. ..:;. · . .J .:.= ~= of . . ... , ,.lo . • ...