Section 500.863. Information required to be delivered to policy applicant.

The requirements of this rule shall be deemed to have been satisfied by the delivery to the applicant of a prospectus included   in  a registration statement which satisfies the requirements of the securities act of 1933, 15 U.S.C. S77A et seq., and which was declared effective by the securities and exchange commission to the extent that the prospectus contains the information required by this rule. An insurer delivering or issuing for delivery in this state any variable life insurance policies shall deliver to the applicant for the policy,  and   obtain a   written acknowledgment of receipt from such applicant coincident  with, or  before, the execution of the application, the following information:

(a)   A summary explanation, in nontechnical terms, of  the  principal features of the policy, including a description of the manner in which the variable benefits will reflect the investment experience of the separate account and the factors which   affect  such   variation. Such explanation shall include notices of the provisions required by  R   500.850(a)(iv)  and (f). (b) A statement of the investment policy of the separate account, including both of the following:

(i)   A description of the investment objective and orientation intended for the separate account and the principal types of investments intended to be made as required by R 500.843(c)(iii).

(ii)      Any restriction or limitations on the manner  in   which  the operations of the separate account are intended to be conducted.

(c)   A statement of the net investment return of the separate account for each of the last 10 years for which the separate account was in existence.

(d)  A statement of the annual taxes, brokerage fees, and all other costs, including all allowable charges  whether   expressed  as  an  annual percentage or otherwise, levied against the separate   account   during  the previous year.

(e)   ) A summary of the method to be used in valuing assets  held  by  the separate account.

(f)   A summary of the federal income tax liabilities of  the  policy applicable to the insured, the policy owner, and the beneficiary.

(g)   Illustrations of benefits payable under any variable life insurance contract shall be prepared  by  the  insurer   and  shall   not  include projections of past investment experience into the future or attempted predictions of future investment experience; however, nothing contained in this subdivision shall be construed to prohibit the use of  hypothetical assumed rates of return to illustrate possible levels of benefits if it is made clear that such assumed rates are hypothetical only.

History: 1979 AC; 1988 AACS.