§ 4228. Life insurance and annuity business; limitations of expenses.\n(a) The provisions of this section shall apply to all domestic life\ninsurance companies and to all foreign and alien life insurance\ncompanies doing business in this state, but not the alien branches of\nsuch companies or such companies' subsidiaries not licensed in this\nstate to do an insurance business, except as provided in subsection (h)\nof this section, engaged in the direct sale of individual life insurance\npolicies or individual annuity contracts, hereinafter referred to as\n"companies". Except as provided in subsection (h) of this section, the\nprovisions hereof shall apply only to individual life insurance policies\nand riders and individual annuity contracts and riders and shall not\napply to fraternal benefit societies nor to the following categories of\ninsurance: (1) accident and health insurance having the meaning ascribed\nin section one thousand one hundred thirteen of this chapter, group life\ninsurance having the meaning ascribed in section four thousand two\nhundred sixteen of this article, group annuity contracts having the\nmeaning ascribed in section four thousand two hundred thirty-eight of\nthis article, and credit insurance having the meaning ascribed in\nsection four thousand two hundred sixteen and four thousand two hundred\nthirty-five of this article; (2) debit life insurance, except as\notherwise expressly provided herein; or (3) policies and contracts\nissued for delivery outside the United States and its possessions.\nNeither these categories of insurance nor reinsurance either assumed or\nceded will be included in any calculations or tests conducted for any\npurpose in connection with this section or any regulations or schedules\npromulgated hereunder.\n (b) For purposes of this section:\n (1) "Advance" and "loan" shall have the following meanings: "advance"\nmeans any amount paid to an agent, up to an amount not exceeding the\nvalue of three months' expected compensation payments, that is expected\nto be repaid within the next twelve months through reductions in future\ncompensation. "Loan" means any payment to an agent, other than an\nadvance, that is expected to be repaid from future compensation. An\namount paid to an agent in an annualization as defined in this\nsubsection is not an advance or loan.\n (2) "Agent" shall have the meaning ascribed in section two thousand\none hundred one of this chapter and "broker" shall have the meaning\nascribed in section two thousand one hundred four of this chapter.\n (3) "Annualization" means: with respect to any amounts paid to an\nagent or broker, the paying or crediting to an agent or broker at the\nbeginning of a policy year compensation or other payments based on all\nor a portion of the amount of premiums scheduled to be received by the\ncompany with respect to such policy year; with respect to the\ncalculation of any limits of payment or expense prescribed in this\nsection, the calculation of such limit is based on the assumption that a\ncompany receives, at the beginning of a policy year, all or a portion of\nthe amount of premiums scheduled to be received by the company with\nrespect to such policy year.\n (4) "Benchmark gross level premium", is calculated as of the issue\ndate of a policy, or as of any subsequent date on which the face amount\nof the policy, or the types or amounts of supplemental benefits provided\nunder the policy, are increased, whether by addition of a rider or\notherwise, at the request of the policy owner. The benchmark gross level\npremium is calculated as one hundred twenty-five percent of the net\nlevel premium for a whole life insurance policy with level premiums\npayable during the life of the insured, with payments starting on the\nsame date and for the same face amount as the policy for which the\nbenchmark gross level premium is being computed, based on three and\none-half percent interest and male aggregate (smoker and non-smoker\nc
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