William Hager

Commissioner Hager of the Universal & Other Plans (A) Task Force stated that there appeared to be disclosure problems with universal life plans and that the identification of these items should be placed on the Actuarial Task Force agenda.

The members present agreed that the disclosure issues extended to variable life as well as universal life.

  • The main concern was that an unsophisticated buyer purchased a policy and did not know what the coverages, benefits and limitations were.
  • It was suggested that Sections 8 and 9(f) of the Universal Life Insurance Model Regulation needed considerable expansion. It was suggested that disclosure requirements be placed in the illustrations section of the models as well as in the contract itself.
  • Some of the items identified which should be disclosed:
    • (1) what is guaranteed versus what is not;
    • (2) adequate disclosure of the fact that a premium quoted will not support the contract for the whole life if the policy is a universal life policy;
    • (3) disclosure of the guaranteed surrender values on a flexible premium policy.

      1988-2 - NAIC Proc.