NAIC life insurance committee sets 2024 regulatory goals

The Life Insurance and Annuities Committee approved its 2024 work charges Tuesday with no comment. Charges were also set for the Life Actuarial Task Force, which the committee oversees.

Members come from the National Association of Insurance Commissioners, which debate and set insurance regulation across a variety of issues. As expected, neither the life and annuities committee or the task force plans to confront a full-scale rewrite of the life insurance illustrations model.

The Indexed Universal Life Illustration Subgroup is tasked with providing "recommendations for the consideration of changes to the Life Insurance Illustrations Model Regulation (#582) to the [Life Actuarial] Task Force, as needed."

That wording is exactly the same as the 2023 charge for illustrations.

The charges go on the Executive Committee and Plenary, which has final approval of all charges. The NAIC is scheduled to meet Nov. 30-Dec. 4 in Orlando for its annual fall meeting. The executive committee is expected to approve all charges during the last day of the meeting.

NAIC illustrations controversy

LATF also directed the IUL illustration subgroup to consider changes to Actuarial Guideline 49-A when needed, also the same language as last year. The subgroup adopted AG 49-B earlier this year and it took effect on May 1, 2023, the latest effort to bring illustrations in line with reality.

AG 49 was adopted in 2015 to address indexed universal life products created after the original illustration model was adopted. Insurers quickly got around it by offering IUL products with multipliers and bonuses.

That led to AG 49-A in 2020 after this LATF directive: "designs with multipliers or other enhancements should not illustrate better than non-multiplier designs." But regulators and consumer advocates say the abuses continue.

Last fall, regulators resisted reopening the overarching Life Insurance Illustrations Model Regulation, with some saying it would be a years-long process. Creating the life illustration regulation was a lengthy, acrimonious process before the NAIC adopted it in 1995. Regulators opted for a "quick fix," which became AG 49-B.

But not before holding a comment period inviting "concepts" to improve the overall model. The subgroup received five comments.

In the meantime, lawsuits over IUL illustrations continue to pop up in the courts.

Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

© Entire contents copyright 2023 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.