Posted by (American Life Insurance Guide(Internet News) Nearly 49 years after the AG 4 Insurance Industry Standards came into effect, the National Association of Insurance Commissioners (NAIC, also translated as "United States Insurance Regulatory Commission") may re-initiate the inspections in 2019.Index insuranceRegulation of product interest rates.
National Association of Insurance Commissioners (NAIC), Life Actuarial (A) Task Team IUL Design Plan (A) Team, Released the 2019 opinions, the original content is:
Consider enhancements to Actuarial Guideline XLIX—The Application of the Life Illustrations Model Regulation to Policies with Indexed-Based Interest (AG 49). Provide recommendations for modifications to AG 49 to the Life Actuarial (A) Task Force.
From this NAIC statement, it is reflected that the industry association in 2019,Ready to consider starting the amendment to AG49.If new supplementary programs are launched, this will be a major victory for consumers and consumer protection groups in the life insurance field.
AG 49 What is the insurance industry standard?
AG 49 is the National Association of Insurance Commissioners (NAIC), targetingIndex Universal Life Insurance(IUL)Design(Illustration, Also known asproposal) The actuarial standards issued are intended to allow life insurance companies to demonstrate their IUL products in a more uniform and standardized manner.As of press time, the AG 49 industry guidelines are divided into stages, which will come into effect in 2015 and 2016 respectively.
For consumers, the AG 49 industry guidelines limitIUL policyin useDemonstrate the maximum value of interest rate, To avoid the "attractive" policy products planned out on the assumption of an unrealistic expected rate of return.
202009 Update: At the end of 2020, the life insurance industry will implement the latest AG-49 A to further regulate the formal insurance display plan.
After AG 2015 took effect in 49, the sales of the new IUL policy shrank.A voice in the industry believes that the AG 49 industry guidelines have greatly affected the sales of IUL.Columnist Tom Martin even wrote on the "Investor Advice": "About AG49: Are we going too fast to limit the IUL demo rate?"
What is the impact on consumers?
There is no doubt that the further regulation of AG49 will be more beneficial to consumers.
For example, consumers are insuringIUL(Exponential Universal Life Insurance), the broker or financial adviser representing the insurance company will first issue a copy ofPolicy design plan(Illustration).A demonstration rate (Illustration Rate) will be used in the design plan to predict the cumulative amount of the future cash value of the policy.
In the absence of AG 49 industry standards, ifPolicy design planGiven a very high demonstration interest rate, the cash value value in the plan is more attractive, which is conducive to sales, but the risk for consumers increases.
American Life Insurance Guide Network©️ also reminds consumers thatComparison of policy plansWhen differentPolicy design plan, Whether the demo interest rate of the same strategy is used is also an important reference factor.
>>>Recommended reading:What is the policy design plan (Illustration, also known as "Proposal") for life insurance?What's on it?What are the controversies and highlights?
(United StatesLife Insurance GuideNet Copyright)
appendix:
01. "AG 49: Have we gone too far in limiting illustrative rates on IULs?", Tom Martin, 2016.03.23, Article, https://www.thinkadvisor.com/2016/03/23/ag-49-have -we-gone-too-far-in-limiting-illustrativ/
02. "Exponential life insurance (IUL) market sales continued to grow, with sales exceeding $2018 million in 3Q5", Ben, 2019.01.04, Article, https://thelifetank.com/iul-life-insurance-continues-growth
