Regulators Ask for Advice About Indexed Universal Life Illustrations
One option on an NAIC panel’s list is to leave the current rules alone.
The Life Actuarial Task Force wants to know: Can it make anyone who cares about indexed universal life insurance performance illustrations happy?
The task force — an arm of the National Association of Insurance Commissioners — is asking anyone interested in the topic for advice on what it should do.
The answers are due Sept. 6.
What It Means
Regulators might change how life insurers and agents can describe certain types of cash value life insurance policies, but they might not.
Indexed Universal Life Insurance
A new indexed universal life insurance policy is an insurance product designed to stay in force up to age 120.
The insured gets a crediting rate tied to the performance of one or more investment indexes.
The Controversy
Critics say that some insurers invent or use new indexes, with relatively short track records, and with performance illustrations that may present unrealistic ideas about how a given IUL policy will really perform.
The NAIC’s Life Insurance Illustration Issues Working Group has worked on the issue for several years.
Doug Ommen, the Iowa insurance commissioner, has suggested that the working group should disband, because states have shown little interest in the project.
(Image: Brian A Jackson/Shutterstock)