Policy Mechanics – Cash Flow – Page 6

Off-Track / On-Track In essence, the model regulation assumes that at issue, all universal life policies are permanent plans. [Bonk: model regulation = ULMR – Universal Life Model Regulation] The r-ratio is meant to measure the extent to which the policy is “on track” as a permanent plan. 2018 – Book – Statutory Valuation of Individual…

Policy Maturity Isn’t it more realistic to assume a customer wants to know what the cost will be if he carries that policy out to maturity? (p13) — Senator Howard W. Cannon (D-NV), Chairman of the Committee 1979 0710 and 1017 – GOV (Senate) – FTC Study of Life Insurance Cost Disclosure, Howard Cannon (D-NV) …

GMF – Guaranteed Maturity Fund The guaranteed maturity fund at any duration is that amount which, together with future guaranteed maturity premiums, will mature the policy based on all policy guarantees at issue. NAIC – Universal Life Insurance Model Regulation (#585): – 22p Shane Chalke ULMR – Universal Life Insurance Model Regulation – MDL-585 –…

Premium Due Date …this was done because (1) the concept of a “premium due date” was thought to be inapposite to flexible premium policies. 1983-1, NAIC proceedings def. inapposite: out of place; inappropriate [Lawsuits] 2018 – LC – Elhouty v Lincoln Benefit, United States Court of Appeals, Ninth Circuit, Google Scholar 2010 – LC -…

Annual Report The flexibility of Universal Life that initially appealed to the policyholder which allowed him to change premium payments, coverages, etc., will make this annual report of the condition of his “account” an unanticipated shock. — Dale W. Hotze, is President of Hotze & Associates Inc., Jacksonville, Florida. 1983 – SOA – Universal Life (rsa83v9n32),…

Charges 198x – NAIC LIBG – ACLI = Scribe, vs 199x NAIC LIBG – Cude, Kite, Regulators = Scribes Legal Cases Walker vs LSW Per Thousand NAIC – Universal Life Model Regulation (MDL-585) – (p4) The benefit charges shall include the charges made for mortality and any charges made for riders or supplementary benefits for…

R-Ratio / R-Factor In essence, the model regulation <Universal Life Model Regulation> assumes that at issue, all universal life policies are permanent plans. The r-ratio is meant to measure the extent to which the policy is “on track” as a permanent plan. Statutory Valuation of Individual Life and Annuity Contracts | 5th Edition, Claire, Lombardi…

Policy Mechanics / Cash flow / Works Until the buyer understands how the product works, attempts to compare price are essentially meaningless. 1972 – SOA – Life Insurance and the Buyer, by Anna Rappaport, Society of Actuaries – 2p-Article Buyers of life insurance are entitled to descriptions of their policies and how they work. But…

Benefits The main concern was that an unsophisticated buyer purchased a policy and did not know what the coverages, benefits and limitations were. 1988 0603 – Universal & Other New Plans (A) Task Force – NAIC – Attachment Two 1988-2, NAIC Proc. Nonforfeiture Premium Benefit Pattern – Examples Benefits – ACLI Benefits – Actuarial Benefits…

Reserves Principles-Based Reserves – PBR Premiums and Benefits – Reserves Benefit Reserves CRVM modified reserve systems soa.org/globalassets/assets/library/research/transactions-of-society-of-actuaries/1967/january/tsa67v19pt2dn5410.pdf Natural Reserves PBR Policy Reserves Terminal Reserves 2013 0917- ThinkAdvisor – ACLI calls Lawsky’s letter on reserves ‘irresponsible’, By Elizabeth D. Festa – [link] In a letter to state insurance commissioners, the American Council of Life Insurers (ACLI)…

Policy Mechanics – Cash Flow

On Track – Off Track

Policy Maturity

GMF – Guaranteed Maturity Fund

Premium Due Date

Annual Report

Charges

R Ratio

Policy Mechanics / Cash flow / Works

Benefits

Reserves