Life Regulators Back Away From New Illustration FiLife Regulators Back Away From New Illustration Fight
April 20, 2021 by Allison Bell
Members of the Life Insurance and Annuities Committee — an arm of the National Association of Insurance Commissioners — appear to be cool to the idea of forming a Life and Annuity Illustration Reengineering Working Group.
The committee talked about the illustration working group proposal Monday, during an online session that was part of the NAIC’s spring national meeting.
Wink’s Note: Do we think it is possible that the majority of insurance regulators could not come to any sort of a “consensus” on the issue of life insurance/annuity illustrations because they lack understanding of the basic mechanics of these complex products, much less a projection of POSSIBLE policy performance?
Isn’t it conceivable that if the insurance salespeople that use these “educational tools” don’t understand the illustrations, that it would therefore be unreasonable to expect (typically) an attorney, who is not a subject matter expert on insurance products, to decipher and analyze these proposals of rosy possibilities?
This issue SHOULD BE one of the top focuses of the National Association of Insurance Commissioners (NAIC) A Committee. The model reg is 26 years old! Look at how things have changed over that period: historical low interest rates, market volatility; the mere changes in product development over that period should warrant a thorough review of the reg. Illustrations SHOULD have similarities between indexed life and indexed annuity. And while we are at it, participating whole life shouldn’t be left out of the discussion. Changing pricing pressures warrant changes in product marketing and policy administration. Who do I have to convince, so that we can put all life insurance and annuity products on a level playing field, as it relates to illustrations of policy performance? – sjm