(A)
Purpose
The purpose of this rule is to provide
guidance to life insurance companies regarding the types of questions that must
be included on life insurance applications pursuant to division (B) of section
3916.05 of the Revised Code to
identify and prevent stranger-originated life insurance (STOLI).
(B)
Authority
This rule is adopted pursuant to
sections 3901.04,
3901.041,
3916.05 and
3916.20 of the Revised
Code.
(C)
Applicability and scope
This rule applies to all insurers
engaged in the business of insurance in this state that issue life insurance
policies.
(D)
Definitions
(1)
"Life insurance
applications" mean all applications for life insurance marketed, solicited,
sold, or issued in this state except for the following:
(a)
Applications for
credit life insurance;
(b)
Applications for life insurance policies to be owned
by a qualified retirement plan;
(c)
Applications for
term life insurance.
(d)
Applications for group insurance other than the
application submitted for the master group contract;
(e)
Applications
used in worksite marketing and direct-response solicitations.
(f)
Applications for
policies with a death benefit not exceeding fifty thousand dollars;
(g)
An
application to replace a policy when the application is to be submitted to the
same insurer that issued the existing policy or contract, so long as the
replacement policy's death benefit does not exceed fifty thousand
dollars;
(h)
An application for reinstatement of a previously
issued policy, so long as the reinstated policy's death benefit does not exceed
fifty thousand dollars;
(i)
An application to make changes to an in-force policy,
so long as the in-force policy's death benefit does not exceed fifty thousand
dollars.
(E)
Questions
related to the characteristics of stranger-originated life insurance policies
(STOLI)
Each application for a policy of life
insurance issued in this state shall include questions reasonably structured to
identify and prevent policies from being purchased for the purpose of entering
into a STOLI transaction as defined by division (W) of section
3916.01 of the Revised
Code.
(F)
Using more than one policy form and applications
(1)
A company
that issues more than one policy form in this state is not required to include
identical questions related to the characteristics of STOLI on all of its
applications for life insurance. Questions may vary based on the type of
product being applied for, the amount of insurance being applied for and the
likelihood that such policy is a STOLI transaction.
(2)
A company may
comply with this rule by use of one or more forms of an addendum to its
application forms in use.
(G)
Requirements for
applications
(1)
Unless excepted by paragraph (D)(1) of this rule, all
applications for life insurance issued, delivered or used in this state must
include questions related to STOLI.
(2)
Insurers shall
file the amended application forms with the superintendent as required by
division (B) of section
3916.05 of the Revised Code
within twelve months following the effective date of this rule.
(H)
Penalties
Violations of this rule shall be an
unfair and deceptive trade practice under sections
3901.19 to
3901.26 of the Revised
Code.
(I)
Severability
If any paragraph, subparagraph, term,
or provision of this rule be adjudged invalid for any reason, such judgment
shall not affect, impair, or invalidate any other paragraph, subparagraph,
term, or provision of this rule, but the remaining paragraphs, subparagraphs,
terms, and provisions shall be and continue in full force and effect.
Notes
Ohio Admin. Code
3901-9-04
Five Year Review (FYR) Dates:
2/3/2021 and
08/30/2025
Promulgated
Under: 119.03
Statutory
Authority: 3916.05,
3916.20,
119.03
Rule
Amplifies: 3916.05,
3916.16,
3916.20
Prior
Effective Dates: 11/05/2010
Five Year Review (FYR) Dates:
08/14/2015 and
08/14/2020
Promulgated
Under: 119.03
Statutory Authority: 3916.05, 3916.20,
119.03
Rule Amplifies: 3916.05, 3916.16, 3916.20
Prior
Effective Dates: 11/5/2010
