KRS 304.15-400: Prohibited policy plans.

(1) No life insurer shall hereafter deliver or issue for delivery in this state:

(a) As part of or in combination with any life insurance, endowment or annuity

contract, any agreement or plan, additional to the rights, dividends, and

benefits arising out of an y such contract, which provides for the accumulation

of profits over a period of years and for payment of all or any part of such

accumulated profits only to members or policyholders of a designated group

or class who continue as members or policyholders until the end of a specified

or ascertainable period of years.

(b) Any "registered" policy; that is, any policy purporting to be "registered" or

otherwise specially recorded, with any agency of the state of Kentucky or of

any other state, or with any bank, trust company, escrow company, or other

institution other than the insurer; or purporting that any reserves, assets or

deposits are held, or will be so held, for the special benefit or protection of the

holder of such policy, by or through any such agency or institution.

(c) Any policy or contract under which any part of the premium or of funds or

values arising from the policy or contract or from investment of reserves, or

from mortality savings, lapses or surrenders, in excess of the normal reserves

or amounts required to pay death, endowment, and nonforfeiture benefits in

respective amounts as specified in or pursuant to the policy or contract, are on

a basis not involving insurance or life contingency features:

1. To be placed in special funds or segrega ted accounts or special

designated places or

2. To be invested in specially designated investments or types thereof, and

the funds or earnings thereon to be divided among the holders of such

policies or contracts, or their beneficiaries or assignees.

This provision does not apply as to any contract authorized under KRS

304.15-390.

(d) Any policy providing benefits or values for surviving or continuing

policyholders contingent upon the lapse or termination of the policies of other

policyholders, whether by death or otherwise.

(e) Any policy containing or referring to one or more of the following provisions

or statements:

1. Investment returns or profit sharing, other than as a participation in the

divisible surplus of the insurer under a regular participatio n provision as

provided for in KRS 304.15-100.

2. Special treatment in the determination of any dividend that may be paid

as to such policy.

3. Reference to premiums as "deposits."

4. Relating policyholder interest or returns to those of stockholders.

5. That the policyholder as a member of a select group will be entitled to

extra benefits or extra dividends not available to policyholders generally.

(2) This section shall not be deemed to prohibit the provision, payment, allowance or

apportionment of regul ar annual dividends or "savings" under regular participating

forms of policies or contracts.