Regulator Calls For ‘A Total Rework’ Of Key NAIC Illustration Guide
July 29, 2019 by John Hilton
Insurance regulators hosted a vigorous debate Monday on whether juiced-up indexed universal life products are projecting realistic returns or not.
New IUL products featuring “multipliers” or “bonuses” prompted the IUL Illustration Subgroup to consider changes to Actuarial Guideline 49. The National Association of Insurance Commissioners’ subgroup has held several conference calls on the topic.
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“The very first multiplier to be introduced on an indexed life product was launched after AG 49 was proposed, but less than 30 days before it was put into action,” said Sheryl Moore of Moore Market Intelligence.
“The existence of multipliers has accelerated dramatically since that point,” said Moore, adding that she is not opposed to the concepts as long as everyone understands how they work.
But the highest IUL illustrated return Moore recorded prior to AG 49 was 10.5%. There are current IUL products illustrating a 13.79% return, she said.
