SNFL - Standard Nonforfeiture Law

  • 1980 - SOA - Nonforfeiture and Valuation Concerns in the 1980's, Society of Actuaries - 16p
  • 1983 - SOA - Universal Life Valuation and NonForfeiture: A Generalized Model, by Shane A. Chalke and Michael Davlin, Society of Actuaries - 72p
  • 1988 - SOA - Update on Universal Life Reserves and Non-Forfeiture Values, Society of Actuaries - 36p
  • 1995 - SOA - Nonforfeiture Laws Update (rsa95v21n4a20), Society of Actuaries - 18p
  • 1995 - SOA - Practical Illustrations and Nonforfeiture Values, Society of Actuaries - 14p
  • 1996 - SOA - Nonforfeiture Law Developments (rsa96v22n38pd), Society of Actuaries - 23p
  • ATTACHMENT ONE-A - Proposed New Standard Nonforfeiture Law For Life Insurance (Preliminary Work By American Academy of Actuaries Committee on Life Insurance and Other Professional / Regulatory Bodies) - From Randy Mire
    • Table of Contents
    • 1. Summary of Nonforfeiture Laws and Related Regulations for Selected Insurance Markets Outside of the United States including Exhibit 1, Disclosure Requirements in the United Kingdom
    • 2. Excerpt from Society of Actuaries (SOA) Report on Outside United States
    • 3. Summary of Regulators' Written Comments Regarding the Proposed Second Nonforfeiture Law
    • 4. Nonforfeiture value calculations
  • Policyholder Expectations:
    • Mr. Summers felt the regulators' main concern should be helping to meet policyholder expectations, but the current draft could lead to more dissatisfaction.
    • Others questioned whether the law removes a policyholder's ability to rely on guaranteed cash values and subjects them to "a lottery for RPU/ETI."
    • There is a very real limit in the ability of most consumers to understand why NF values are based on future assumptions.
    • Public confidence would certainly be shaken if consumers are expected to "Take what we give you and don't ask why."

1996-1, NAIC Proceedings

  • Nonforfeiture Value - The contemplated minimum cash surrender value requirement is based on a retrospective approach, since future premiums are not known.

1982-1, NAIC Proceedings

  • The third area of change is the excess initial expense allowance in the Standard Nonforfeiture Law for Life Insurance.
    • This proposal adopts the recommendations set out by C.F.B. Richardson in his paper published in the Transactions of the Society of Actuaries, Vol. XXIX, 1977, p. 209.
      • [Bonk: 1977 - SOA - Expense Formulas for Minimum Nonforfeiture Values, by Charles F.B. Richardson, Society of Actuaries - 34p]
    • Briefly, the proposed amendments would change the excess initial expense allowance in the formula to reduce the minimum nonforfeiture values for most permanent policies.
      • For level-premium whole life insurance the formula for computing the excess initial expense allowance would be changed from 65% of the adjusted premium plus $20 per $1000 to 125% of a net level nonforfeiture premium plus $10 per $1000.
      • For non-level-premium policies, the proposal would make the initial expense allowance much less dependent on the size of the first-year premium than it otherwise would be, thereby increasing the minimum nonforfeiture values for high first-year premium policies.

--  John O. Montgomery, California

1980 - SOA - Insurance Regulation and Legislation (rsa80v6n39), Society of Actuaries - 20p

  • Section 3: Interest
  • A. The nonforfeiture interest rate for any life insurance policy issued in a particular calendar year beginning on and after the operative date of the Valuation Manual shall be equal to 125% of the calendar year statutory valuation interest rate defined for the NPR in the Valuation Manual for a life insurance policy with nonforfeiture values, whether or not such sections apply to such policy for valuation purposes, rounded to the nearer one-quarter of 1%, provided, however, that the nonforfeiture interest rate shall not be less than the applicable interest rate prescribed to meet the definition of life insurance in the Cash Value Accumulation Test under Section 7702 (Life Insurance Contract Defined) of the U.S. Internal Revenue Code. 
    • Guidance Note: For flexible premium universal life insurance policies as defined in Section 3.D of the Universal Life Insurance Model Regulation (#585), this is not intended to prevent an interest rate guarantee less than the nonforfeiture interest rate.  (p02-1)

2023 - NAIC Valuation Manual

  • Report of the American Academy of Actuaries - Executive Summary
    • Historical Developments
    • The original Standard Nonforfeiture Law for Life Insurance (SNFL) was developed in the 1940's. Prior to the NAIC annuity nonforfeiture law, the states of New Jersey, New York and Washington had annuity nonforfeiture rules. All sets of rules resembled the SNFL.3,5
    • In August of 1975, the NAIC appointed a subcommittee to explore development of a model nonforfeiture requirement for annuities.
    • (p1687)

2005-2 NAIC Proc.