The National Association of Insurance Commissioners has rejected the idea of offering a special license for producers who focus on selling term life insurance.[@@]
Some insurers have pushed for creating a “limited line term life” license, arguing that the license would cut the cost of selling term life insurance through live human beings and expand sales of much-needed insurance to middle-income families.
But producer groups have opposed the proposal, contending that it would water down producer licensing standards.
The resolution adopted here at the NAIC winter meeting states that the Kansas City, Mo., group rejects the establishment of a limited line license for producers to sell term life insurance.
The resolution was approved by the NAIC’s “plenary” – the body that includes all voting NAIC members.
The resolution reinforces the NAIC’s commitment to uniform standards, according to Iowa Insurance Commissioner Susan Voss.
Regulators attending the NAIC winter meeting also adopted an annuity nonforfeiture model regulation, which implements the Standard Nonforfeiture Law for Individual Deferred Annuities model.
The 2003 model law helps annuity issuers respond to the recent low interest rate environment, by replacing the traditional 3% nonforfeiture rate with a 5-year, constant-maturity Treasury rate.
The model sets a nonforfeiture rate range of 1% to 3%, and it allows a lower minimum nonforfeiture interest rate for equity-indexed annuities.
Meanwhile, the NAIC’s Life Insurance and Annuities Committee has approved a temporary reserving rule for variable annuities with guaranteed living benefits, by extending the sunset provision of Actuarial Guideline 39.
If approved by the NAIC plenary, the move would extend AG 39 from Jan. 1, 2006, through Jan. 1, 2008.
The NAIC and the American Academy of Actuaries, Washington, are trying to come up with a permanent VA guarantee reserving rule, Actuarial Guideline VA-CARVM. AG VA-CARVM would replace the current reserving formulas with use of models that would show how VA living benefits guarantees might perform under a wide variety of market conditions.