Ohio § 3915.07

§ 3915.07.

(A) In the case of policies issued before January 1, 1989, or an earlier date, not before

January 1, 1983, as of which section 3915.071 of the Revised Code becomes operative for such policies, no such policy of life insurance, except as

set forth in division (G) of this section, shall be issued or delivered in this state

unless such policy contains in substance the following provisions or corresponding

provisions which in the opinion of the superintendent of insurance are at least as

favorable to the defaulting or surrendering policyholder: (1) That in the event of default in any premium payment, the company will grant, upon

proper request not later than sixty 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

such due date, of such value as is specified in this section; (2) That upon surrender of the policy within sixty days after the due date of any premium

payment in default after premiums have been paid for at least three full years in

the case of ordinary insurance or five full years in the case of industrial insurance,

the company will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender

value of such amount as is specified in this section; (3) That a specified paid-up nonforfeiture benefit becomes effective as specified in

the policy unless the person entitled to make such election elects another available

option not later than sixty days after the due date of the premium in default; (4) That if the policy has become 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 company will pay, upon

surrender of the policy within thirty days after any policy anniversary, a cash surrender

value of such amount as is specified in this section; (5) 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 and paid-up nonforfeiture benefit

available under the policy on each policy anniversary, either during the first twenty

policy years or during the term of the policy, whichever is shorter, such 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 company

on the policy; (6) A statement that the cash surrender values and paid-up nonforfeiture benefits available

under the policy are not less than the minimum values and benefits required by or

pursuant to any applicable statute of the state in which the policy is delivered;

 an explanation of 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 company on the policy;  if a detailed statement of the

method of computation of the values and benefits shown in the policy is not stated

therein, a statement that such method of computation has been filed with the insurance

supervisory official of the state in which the policy is delivered;  and a statement

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 such values and benefits are consecutively shown in the policy. Any portions of division (A) of this section which are not applicable by reason of

the plan of insurance may, to the extent inapplicable, be omitted from the policy. The company shall reserve the right to defer the payment of any cash surrender value

for a period of six months after demand therefor with surrender of the policy. (B) 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 division

(A) of this section, shall be an amount not less than the excess of the present value,

on such 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 the then present value of the adjusted premiums as defined

in divisions (D), (E)(1), and (2) of this section, corresponding to premiums which

would have fallen due on and after such anniversary, plus the amount of any indebtedness

to the company on the policy.  Any cash surrender value available within thirty 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 division (A) of

this section, shall be an amount not less than the present value, on such anniversary,

of the future guaranteed benefits provided for by the policy, including any existing

paid-up additions, decreased by any indebtedness to the company on the policy. (C) Any paid-up nonforfeiture benefit available under the policy in the event of default

in a premium payment due on any policy anniversary shall have a present value as of

such anniversary at least equal to the cash surrender value then provided for by the

policy or, if none is provided for, the cash surrender value which would have been

required by this section in the absence of the condition that premiums shall have

been paid for at least a specified period. (D) Except as otherwise provided in this division, the adjusted premiums for any policy

shall be calculated on an annual basis and shall be such uniform per cent of the respective

premiums specified in the policy for each policy year, excluding any extra premiums

charged because of impairments or special hazards, that the present value, at the

date of issue of the policy, of all such adjusted premiums is equal to the sum of

the following: (1) The then present value of the future guaranteed benefits provided for by the policy; (2) Two per cent of the amount of insurance, if the insurance is uniform in amount, or

of the equivalent uniform amount, if the amount of insurance varies with duration

of the policy; (3) Forty per cent of the adjusted premium for the first policy year; (4) Twenty-five per cent 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. In applying the percentage specified in divisions (D)(3) and (4) of this section,

no adjusted premium shall be deemed to exceed four per cent of the amount of insurance

or uniform amount equivalent thereto.  The date of issue of a policy for determining such adjusted premiums is the date

as of which the rated age of the insured is determined. In the case of a policy providing an amount of insurance varying with duration of

the policy, the equivalent uniform amount thereof for determining such adjusted premiums

is the uniform amount of insurance provided by an otherwise similar policy, containing

the same endowment benefits 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;  provided, that in the

case of a policy providing a varying amount of insurance issued on the life of a child

under ten, the equivalent uniform amount may be computed as though the amount of insurance

provided by the policy prior to the attainment of age ten were the amount provided

by such policy at age ten. The adjusted premiums for any policy providing term insurance benefits by rider or

supplemental policy provision shall be equal to (a) the adjusted premiums for an otherwise

similar policy issued at the same age without such term insurance benefits, increased,

during the period for which premiums for such term insurance benefits are payable,

by (b) the adjusted premiums for such term insurance, the foregoing items (a) and

(b) being calculated separately and as specified in the preceding paragraphs of this

division except that, for the purposes of divisions (D)(2), (3), and (4) of this section,

the amount of insurance or equivalent uniform amount of insurance used in the calculation

of the adjusted premiums referred to in (b) 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 (a). Except as otherwise provided in divisions (E)(1) and (2) of this section, all adjusted

premiums and present values referred to in this section shall for all policies of

ordinary insurance be calculated on the basis of the commissioners 1941 standard ordinary

mortality table, provided 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 three years younger than the actual age of the insured for policies

issued prior to January 1, 1979, and according to an age not more than six years younger

than the actual age of the insured for policies issued on and after January 1, 1979

and such calculations for all policies of industrial insurance shall be made on the

basis of the 1941 standard industrial mortality table.  All calculations shall be made on the basis of the rate of interest, not exceeding

three and one-half per cent per annum, specified in the policy for calculating cash

surrender values and paid-up nonforfeiture benefits.  In calculating the present value of any paid-up term insurance with accompanying

pure endowment offered as a nonforfeiture benefit, the rates of mortality assumed

may be not more than one hundred thirty per cent of the rates of mortality according

to such applicable table.  For insurance issued on a substandard basis, the calculation of any such adjusted

premiums and present values may be based on any other table of mortality that is specified

by the company and approved by the superintendent of insurance. (E) (1) In the case of ordinary policies issued on or after the operative date of this division

as defined in this division, all adjusted premiums and present values referred to

in this section shall be calculated on the basis of the commissioners 1958 standard

ordinary mortality table and the rate of interest, not exceeding three and one-half

per cent per annum, specified in the policy for calculating cash surrender values

and paid-up nonforfeiture benefits, provided 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 years younger than the actual age of the insured.  Provided that 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.  Provided, further, that for insurance issued on a substandard basis, the calculation

of any such adjusted premiums and present values may be based on such other table

of mortality as may be specified by the company and approved by the superintendent.  The operative date of this division for any company is the earlier of the date specified

in a written notice to the superintendent of the company's election to comply with

the provisions of this division or January 1, 1966. (2) In the case of industrial policies issued on or after the operative date of this

division as defined in this division, all adjusted premiums and present values referred

to in this section shall be calculated on the basis of the commissioners 1961 standard

industrial mortality table and the rate of interest, not exceeding three and one-half

per cent per annum, specified in the policy for calculating cash surrender values

and paid-up nonforfeiture benefits;  provided, that 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 1961 industrial extended term insurance table and provided,

that for insurance issued on a substandard basis, the calculations of any such adjusted

premiums and present values may be based on such other table of mortality as may be

specified by the company and approved by the superintendent.  The operative date of this division for any company is the earlier of the date specified

in a written notice to the superintendent of the company's election to comply with

the provisions of this division or January 1, 1968. (3) In lieu of the rate of interest provided in divisions (E)(1) and (2) of this section,

a company may specify an interest rate not exceeding four per cent for calculating

cash surrender values and paid-up nonforfeiture benefits in any ordinary or industrial

policy issued on or after January 1, 1975, and prior to January 1, 1979, and may specify

an interest rate not exceeding five and one-half per cent for calculating cash surrender

values and paid-up nonforfeiture benefits in any ordinary or industrial policy issued

on or after January 1, 1979. (F) Any cash surrender value and any paid-up nonforfeiture benefit, available under the

policy in the event 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 divisions (B), (C), (D), (E)(1), and (2) of this section

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

be not less than the dividends used to provide such additions.  Notwithstanding division (B) of this section, additional benefits payable: (1) In the event of death or dismemberment by accident or accidental means; (2) In the event of total and permanent disability; (3) As reversionary annuity or deferred reversionary annuity benefits; (4) As term insurance benefits provided by a rider or supplemental policy provisions

to which, if issued as a separate policy, this section would not apply; (5) As term insurance on the life of a child or on the lives of children provided in

a policy on the life of a parent of the child, if such term insurance expires before

the child's age is twenty-six, is uniform in amount after the child's age is one,

and has not become paid-up by reason of the death of a parent of the child; (6) As other policy benefits additional to life insurance and endowment benefits shall

be disregarded, and premiums for all such additional benefits and any extra premiums

to cover impairments or special hazards shall be disregarded, in ascertaining cash

surrender values and nonforfeiture benefits required by this section.  No such additional benefits shall be required to be included in any paid-up nonforfeiture

benefits. (G) This section does not apply to any reinsurance, group insurance, pure endowment,

annuity, or reversionary annuity contract, nor to any term policy of uniform amount,

or renewal thereof, of fifteen years or less expiring before age sixty-six, for which

uniform premiums are payable during the entire term of the policy, nor to any term

policy of decreasing amount on which each adjusted premium, calculated as specified

in divisions (D), (E)(1), and (2) of this section, is less than the adjusted premium

calculated on such fifteen-year term policy issued at the same age and for the same

initial amount of insurance, nor to any policy which is delivered outside this state

through an agent or other representative of the company issuing the policy. (H) Except as provided in division (E)(1) of this section with respect to ordinary policies

and division (E)(2) of this section with respect to industrial policies any company

may, at its option, file with the superintendent a written notice of its election

to issue all or any of its policies pursuant to this section on and after a specified

date.  If such election does not apply to all forms of policies issued on and after such

specified date, such election shall specify the forms of policies to which it applies.  The operative date of this section with respect to such forms of policies is the

date specified in the election pertaining to such forms of policies.  No other statute shall be construed as to prohibit any life insurance company from

classifying its policies and electing to issue specified forms of policies pursuant

to the plan set forth in this section, while using any other legal basis as to reserve

calculations and nonforfeiture values as to others of its policies, nor shall it be

construed to prohibit any life insurance company from adopting other reasonable classifications

of policies or policyholders.