NAIC Urged To Adopt 5 Changes To Fix Illustration Issues
November 17, 2020 by Jamie Johnson
Consumer advocate Birny Birnbaum pushed a state insurance regulator committee to overhaul illustration rules Tuesday.
The Life Insurance and Annuities Committee gave Birnbaum 20 minutes to make the case for new illustration rules. The committee, part of the National Association of Insurance Commissioners, considers model laws to govern insurance, which are then available to states for adoption.
Wink’s Note: Indexed life was developed two years AFTER the model regulation was developed.
Sounds like Birnbaum wants the supplemental reports that list the total non-guaranteed insurance charges to be displayed on the NAIC-compliant ledger. He also suggests showing six different possible range-of-results columns, based on the market’s performance, ranging from -15% growth to +15% growth. Regarding the part where it was suggested that regulators “discourage illustration competition,” that is just the nature of the (illustration) beast; agents are going to comparison shop/spreadsheet these products, in order to find which product appears “BEST” for their prospects/clients.