Are pre 59.9 IUL gains penalized?

I surrendered a cash value life policy. It was very intentionally NOT a MEC. Basis came out tax free as expected, but the carrier issued me a 1099-R with a Code 1D, which subjects the taxable gains to 10% penalty. I find conflicting advice, anecdotes, and misinformation on this topic. I understand all the 59.5 rules on IRAs and annuities, but I never thought life cash value was subject to 59.9 rules. What i really want is some proof of this rule, either way. If anyone could educate me please and thank you.

EDIT: 59.5 not sure how 9 slipped in there.