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NAIC Task Force Releases ROP Draft

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An arm of the National Association of Insurance Commissioners has revised a proposed actuarial guideline and exposed a draft of the guideline for discussion.

Members of the Life & Health Actuarial Task Force at the NAIC, Kansas City, Mo., voted here at the NAIC’s summer meeting to make several changes to a draft of Actuarial Guideline CCC, which concerns the nonforfeiture provisions of return-of-premium life insurance policies.

The proposed guideline would apply to individual life insurance policies other than variable and non-variable adjustable life policies and current assumption whole life policies that provide for an endowment benefit materially less than the policy face amount

The drafters of the proposed guideline hope to provide guidance regarding the required minimum cash values, officials say.

LHATF members voted here to change the guideline draft to exclude universal life type products from the scope of the draft.

Members voted to make Jan. 1, 2009, the guideline effective date, with 3 years for policy forms to come into compliance.

In other LHATF news, task force members:

- Voted to expose pieces of a Valuation Manual to public review.

The manual would provide instructions for implementing a shift to principles-based reserving.

An LHATF subgroup has removed a provision that would affect current risk transfer guidelines for reinsurance transactions.

Regulators are discussing whether they should reinstate the reinsurance risk transfer provision.

- Talked about how to address the concept of a new type of life insurance policy that would permit policyholders to take out a policy loan in an amount exceeding the value of the policy.

Regulators agreed that the LHATF should handle the concept by looking at actuarial and reserving issues rather than at social issues.


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