Illustrations - Credibility
- 11. Report of Yield Index Advisory Committee - Life Cost Disclosure (A) Task Force
- Walter Miller (The Prudential), chair, presented the report of the Yield Index Advisory Committee (Attachment One).
- ... expressed his strong concern about the credibility of illustrations, and accordingly included revisions to the regulation to cover this even though it technically exceeded his committee's charge. (p611)
- (p615) - Credibility of Illustrations
- In the six meetings we have held since our prior report was submitted, the topic that most dominated our conversations did not relate to the yield index system, but rather to the credibility of yield indexes or any other figures derived from illustrations of products with non-guaranteed pricing elements.*
- Policies of this nature make up the overwhelming majority of those sold today and likely to be sold in the future.
- (*By "non-guaranteed pricing elements," we mean either the dividends in a traditional participating policy or any elements subject to change at company discretion - such as premiums, interest rates, and mortality charges-----in the so called non-traditional policies that have come to the fore recently.)
- In the six meetings we have held since our prior report was submitted, the topic that most dominated our conversations did not relate to the yield index system, but rather to the credibility of yield indexes or any other figures derived from illustrations of products with non-guaranteed pricing elements.*
To: NAIC Life Cost Disclosure Task Force
From: Advisory Committee on Yield Indexes, Walter N. Miller, Chairman
Subject: Report of Yield Index Advisory Committee
Date: November 7, 1986
1987-1, NAIC Proceedings -