NAC686A.490. “Side fund” defined.

“Side fund” means a fund or reserve that is part of, or otherwise attached to, a life insurance policy, other than an individually issued annuity, by any means, including, without limitation, by rider, endorsement or any other mechanism which accumulates premiums or deposits with interest. The term does not include:

     1. Accumulated value, cash value or secondary guarantees provided by a universal life policy;

     2. Cash values provided by a whole life policy which are subject to standard nonforfeiture law for life insurance; or

     3. A premium deposit fund which:

     (a) Contains only premiums paid in advance which accumulate at interest;

     (b) Imposes no penalty for withdrawal;

     (c) Does not permit funding beyond future required premiums;

     (d) Is not marketed or intended as an investment; and

     (e) Does not carry commission, either paid or calculated.

     (Added to NAC by Comm’r of Insurance by R031-07, 8-31-2007, eff. 9-1-2007)