STATEMENT ON BEHALF OF THE AMERICAN COUNCIL OF LIFE INSURANCE TO THE NAIC (A) COMMITTEE'S TASK FORCE ON
LIFE INSURANCE COST DISCLOSURE, December 15, 1981

• Since universal life insurance was then being marketed only on a very limited basis, the council task force's proposals did not address this product.
  • The council has now developed a  recommendation for universal life insurance, which we would like to present for your consideration.
• The essence of the proposal is that universal life insurance be treated for cost disclosure purposes as a life insurance plan
  with a nonguaranteed cost element.
  • Thus, the policy summary would show for the prescribed policy years the anticipated premiums and, both on the guaranteed and currently illustrated bases, the death benefits, cash surrender values, and endowment amounts, if any.
  • The life insurance cost indexes would be calculated on the currently illustrated basis, using the anticipated premiums, and would be required to be shown along with corresponding nonguaranteed elements.
  • An additional item of information that is recommended to be required in the policy summary is the point at which the policy will expire based on the policy guarantees and the anticipated premiums shown in the summary.

1982-1, NAIC Proceedings (page 399)