31.09.15.08

.08 Minimum Paid-Up Nonforfeiture Benefits.

A. If a universal life insurance policy provides for the optional election of a paid-up nonforfeiture benefit, it shall be such that its present value shall be at least equal to the cash surrender value provided for by the policy on the effective date of the election.

B. The present value in A of this regulation shall be based on mortality and interest standards at least as favorable to the policyowner as:

(1) In the case of a flexible premium universal life insurance policy, the mortality and interest basis guaranteed in the policy for determining the policy value; or

(2) In the case of a fixed premium policy the mortality and interest standards permitted for paid-up nonforfeiture benefits by Insurance Article, 16-306 and 16-309(i), Annotated Code of Maryland.

C. In lieu of the paid-up nonforfeiture benefit described in A and B of this regulation, the insurer may substitute, upon proper request not later than 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.