Policy Information for Applicant – Universal Life – NAIC

  • 1990-1A, NAIC Proceedings – NAIC / LIMRA – Universal Life Disclosure Form Focus Group Summary,   —   [BonkNote]  —  10p
  • 1993 – NAIC – Policy Information for Applicant – Universal Life Policy – 3p
    • Life Insurance Disclosure Model Regulation – Appendix D
    • Located in:  1993 0525 – GOV (Senate) – When Will Policyholders Be Given The Truth About Life Insurance?, Senator Howard Metzenbaum (D-OH) – p63-65  —  [BonkNote]
  • To date, no state has adopted these forms.
    • Why this complete lack of action after all the effort in developing the forms?
  • One possible reason is that, during the early part of the year, state insurance departments are generally busy dealing with the  legislatures, which customarily are in session then.
  • Also, it takes a few months for new NAIC regulations to be officially published, distributed, and adapted for individual state use.
  • Many states also have been occupied with more urgent concerns, such as automobile and health insurance rates and solvency questions.

—  Tony Spano (ACLI)

1990 – SOA – Quality of Life Insurance Sales Illustrations, Society of Actuaries – 16p

  • 1990 – SOA – Quality of Life Insurance Sales Illustrations, Society of Actuaries – 16p
    • Tony Spano, ACLI: Norm has covered a good bit of history, describing activity over a number of years. Very modestly, he did not mention that during this time he was very much at the cutting edge of developments.
    • I’m going to discuss what Norm referred to as consumer disclosure forms.
      • They’re also known as policy information forms.
      • I’ll first cover some background, then describe the forms and the major issues that arose during their development, and finish with a few words about the next step in the process.
    • BACKGROUND
      • The policy information forms were developed by the NAIC over a period of a year and a half. The impetus for the effort came from some of the state regulators, particularly William Hager, then insurance commissioner of Iowa. Some of you may remember Mr. Hager from a few years back when he was general counsel of the AAA.
      • The first word about this project came at the June 1988 NAIC meeting, when a report was presented summarizing the results of a survey of the different state insurance departments on consumer disclosure concerns. The report cited a number of alleged abuses regarding sales illustrations for interest-sensitive products, including the following:
        • Illustrations with “outrageous” interest rate assumptions.
        • Current rate illustrations based on a different rate than the one currently being paid.
        • Nonguaranteed elements built into the calculations. (I assume this meant that nonguaranteed items were being blended with guaranteed items in some of the calculations.)
        • Unrealistic assumptions, such as increasing interest and decreasing mortality.
        • Illustrations which include items not in the contract.
      • A regulatory working group was appointed to help remedy these abuses and enable the consumer to make more meaningful comparisons of different policies.