The proposed bill would update current statutes related to life insurance policy illustrations by introducing new definitions and requirements aimed at enhancing consumer protection and transparency. It would define "illustration" as a presentation that includes nonguaranteed elements of a life insurance policy over a period of years and require insurers to notify the Director of the Department of Insurance and Financial Institutions (DIFI) whether a policy form will be marketed with or without an illustration. The bill also mandates that if a policy form is marketed with an illustration, a basic illustration must be prepared and delivered in accordance with state law, and it prohibits the use of illustrations for policies marketed without one before the first policy anniversary. Additionally, the bill introduces annual reporting requirements for insurers and requires the appointment of illustration actuaries who must certify compliance with actuarial standards. It specifies that insurers must provide a basic illustration at the time of policy delivery and retain copies of illustrations for three years after the policy is no longer in force. The bill also includes provisions for supplemental illustrations and mandates that illustrations must not mislead potential policyholders. Overall, these updates aim to strengthen regulatory oversight and clarity in life insurance practices, with an effective date set for January 1, 2026.

Statutes affected:
Senate Engrossed Version: 20-1241, 20-431.08, 20-431.01, 20-431.02, 20-431.03, 20-431.04, 20-431.05, 20-431.06, 20-431.07, 20-431.09, 20-442
Chaptered Version: 20-1241, 20-431.08, 20-431.01, 20-431.02, 20-431.03, 20-431.04, 20-431.05, 20-431.06, 20-431.07, 20-431.09, 20-442