NAIC Panel Splits On Requiring New Illustration Rules For Old Policies
November 20, 2019 by John Hilton
A significant split opened up this week on applying tightened indexed universal life insurance illustration rules to in-force policies.
A National Association of Insurance Commissioners’ subgroup is still working through the details, but has a mandate to clamp down on multipliers and bonuses that critics say enable insurers to get around Actuarial Guideline 49, approved in 2015.
Whether it’s fair to apply the final changes to in-force illustrations produced much disagreement during an IUL Illustration Subgroup conference call this week.
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In-force illustrations are more than just a sales tool, said Sheryl Moore of Moore Market Intelligence.
“It’s not just a tool that’s used for replacement of policies; this is not just about a sales presentation,” she said. “And it’s really not much about how does this product work. It’s about managing the expectations of an interest-sensitive life insurance policy, and properly servicing the contract. This is a very, very important tool for managing policies that have already been sold. So knowing how to properly fund that policy is very, very important and that decision [on in-force illustrations] lies in all of your hands.”
