Regulators say the language in a model regulation establishing reserving guidelines for universal life products with shadow accounts is clear and that it is up to actuaries to discipline any potential gaming of the model.
At the summer meeting of the National Association of Insurance Commissioners, regulators declined to send out a survey designed to determine if there is growing abuse of the Application of the Valuation of Life Insurance Policies model reg, known as Guideline AXXX.
Regulators have reacted a couple of times to abuses and can?t be expected to rewrite the guideline every time a way is found to circumvent it, said Frank Dino, a Florida regulator. Rather than approach regulators for a new fix, he said, anyone who knows of a violation should bring the matter to the ABCD, an actuarial disciplinary board.
The first attempt to stop abuses in the marketplace was the development of the Valuation of Life Insurance Policies model regulation. It was later followed by Guideline AXXX.
Regulators said that even if they were inclined to revisit the guideline, to date only one example of an alleged violation has been presented to them.