NAIC Proposes Actuarial Guidelines for Index-Linked Variable Annuities
September 20, 2022 by William Kotapish, Carlton Fields
On July 25, 2022, the Index-Linked Variable Annuity (A) Subgroup of the NAIC’s Life Insurance and Annuities (A) Committee issued for public comment an exposure draft of proposed actuarial guidelines for index-linked variable annuities (ILVAs).
The guidelines are designed to establish standards for the design and operation of ILVAs so that they more clearly constitute “variable annuities” and, as such, are exempt from NAIC Model 805 – Standard Nonforfeiture Law for Individual Deferred Annuities. Such an exemption is useful because ILVAs generally do not comply with Model 805’s requirement that an annuity contract provide for the crediting, at a minimum, of nonforfeiture rates of interest.