The Life Insurance and Annuities Committee at the National Association of Insurance Commissioners (NAIC) has endorsed a proposal to add an annuity illustrations section to the NAIC’s Annuity Disclosure Model Regulation.
Members of the committee at the NAIC, Kansas City, Mo., made the decision Wednesday during a conference call meeting.
The NAIC executive committee and the plenary, the body that includes all voting NAIC members, could vote on final approval of model revisions at the NAIC’s upcoming summer meeting, NAIC officials say.
The committee took no action on a proposal to look into creating a mechanism employers could use to roll existing corporate-owned life insurance (COLI) policies into new COLI policies through tax-free Section 1035 exchanges.
An NAIC staffer had suggested that some employers may be trapped owning bad COLI policies because they have no practical way to meet COLI participant notice requirements and meeting insurable interest requirements when replacing an existing policy.
Insurance industry groups argued that Internal Revenue Service guidance could lead to negative tax consequences for employers that trade in COLI policies, and that this is a bad time to consider revising insurable interest laws.
- Rory Banim