IUL Illustration Subgroup (Working Group) - NAIC

  • 2022 1110 - IULSG -
    • Peter Weber, Rachel, Craig
    • The following items are being exposed for a 21-day public comment period ending November 2nd, 2022.
      • Actuarial Guideline ILVA Draft for LATF
      • Actuarial Guideline ILVA Exposure Questions
      • Comment Letters-? - 2 Issues
        1. ALM, Product Design,  3 comment Letters - MVA, Different Lengths of time,
          1. ACLI /CAI - Brian Bayerle (ACLI)
          2. AAA - Beth,  
          3. ?? - Peter said that this one was a different issue

Discussion - Question 1

        • Yanachek - Products we are trying to get rid of?
          • If I'm reading it properly... and I may not be...
          • I'm just trying to spark conversation...
        • Pete - many products
          • Risk/Reward, Equity, products in an up market vs down market
        • anacheck
        • :21 - Rachel Hemphill - What are we trying to do?  Different term lengths could be appropriate.
        • Weber - 
        • William - VA Products could be excluded from SNFL.  Market Value.  MVA should reflect the investment strategy, Surrender charge period. Then after - Policyholders may surrender at anytime.  
        • Weber - not sure the guideline does that now.  Square Peg, round hole problem.  Example - may exclude products we don't have a concern with.
        • Tsang - to Brian Bayerle - ALM - Market Value - actual investment product vs product index.  Jonathan (Prudential) - Could have Flexible Premiums coming in, tying durations together, MVA will be symmetrical, Could send an example, liabilities tied to assets, timing of premium, single premium vs multiple premiums, Spreadsheet in comment letter. yolanda (Video - Spreadsheet)
        • Weber - Confusing for Policyholders
        • Video - Jonathan (Prudential)
        • Tsang - having one mva would be a difficult thing to do. Industry.  maybe the MVA Length should vary.
        • Ben Slutsker - appropriate to be more flexible, less room for gamesmanship, many product designs
        • Weber - give states better tools for MVA, Contract Holder

Discussion - Question 2

      • sdf
        • Brian Bayl (ACLI) - Interest rate exposer, Duration Risk, Equity Risk transferred to consumer.
          • 3rd Point of Letter - AAA agrees, Point to point crediting, continuity of values, consumer understanding, 
        • Weber - Consumer, interest rate risk, 
        • Tsang  We oppose, shouldn't be considered a _________Variable Annuity?
        • Ben Sl - consumer understanding, Confusing. Policy, market value, not really a place for these products. 
        • Tomas - Question for Ben - Why not do a separate guideline for fixed products?  really a hybrid product. Probably should have done that from the beginning.
          • Historical Context?
        • Weber - History.  
        • Seong Om- New Jersey - Don't support making MVA Optional
        • AAA - Beth -
          • Actuarial Guideline only applies to interim value.  
          • Fixed income proxy
          • Interest rate based on term......
        • William - Asset is Asset... Doesn't matter interest rate today.  you can argue what the yield or value is, but the asset is the asset.  value adjusts book value to market value
        • AAA - Beth
          • We are talking about the same thing.
        • William / Beth - Disagree
        • Weber - Disagreement, Nuance that I am not picking up on. 
        • Weber to Rachel - Not sure how to proceed here.
        • Rachel - 


  • 2022 1024 - NAIC Indexed Universal Life Illustration Subgroup solicits comment on options to revise Actuarial Guideline 49-A and to open NAIC Life Insurance Illustrations Model Regulation (#582) to revision - [link]

The following document is being exposed by the SubgroupPlease send comments to Jennifer Frasier by close of business on Nov. 3rd, 2022

Please provide comments, including pros and cons, on the following:

  1. Proposal contained in the Sept. 6 comment letter from Securian Financial
  2. Proposal contained in the Sept. 6 comment letter from the Group of 6 companies (Allianz, et al.)
  3. Proposal letter from the Coalition of Concerned Insurance Professionals, clarifying the Samuelson-Moore comment letter submitted around Sept. 6
  4. Discussion topic proposed during the October 12 Subgroup Call
    • Oct. 12, 2022 - Please comment on:
      • The concept described on the October 12 Subgroup call of whether products and strategies associated with the same hedge budget should illustrate the same.

  • The following document is being exposed by the SubgroupPlease send comments to Jennifer Frasier by close of business on Nov. 22nd, 2022 - IUL SG Exposure for Model Reg 582 Ideas
    • Indexed Universal Life (IUL) Illustration (A) Subgroup - Exposure for Model Reg 582 Ideas
    • To address concerns relating to IUL illustrations, the IUL Illustration (A) Subgroup has been charged to provide recommendations for consideration of changes to the Life Insurance Illustrations Model Regulation (#582).
    • By Tuesday, November 22, 2022, please provide comments for the following:
      •  Which Model Reg 582 subsections to consider opening
      • Provide an opinion on aspects of proposed Model Regulation revision concepts that are actuarial in nature and aspects that may be non-actuarial.
      • Concepts for draft revisions to address broad IUL illustration issues
      • Whether such addressing of broad issues could occur without revising the Model Regulation
      • Please send comments to Jennifer Frasier (jfrasier@naic.org) by close of business Nov. 22.


The following document is being exposed by the SubgroupPlease send comments to Reggie Mazyck by close of business on Sept 6th, 2022 (Extended from July 26, 2022)

Comment Letters (submitted on or before July 26, 2022)

Comment Letters (submitted between July 27, 2022 through Sept. 6, 2022):

  • Menu of Options
  • questions posed on Nov 1st, 2019
  • November 14, 2019 - <Should IUL Illustrations be Grandfathered?>
  • Attachment Twenty-Five - Life Actuarial (A) Task Force -12/5–6/19 (6-253)
  • Thanks <to Donna Megregian - AAA> for doing the research. 
  • A lot of people don't understand why the illustration model regulation is the way it is.

    -- Fred Andersen (Chair - IULWG) 

2020 0303 - NAIC Proc. Fred Andersen (Chair - IULWG) 

  • Commissioner Wilcox said that he admitted that the working group <Life Disclosure Working Group>  had gotten a little sloppy on its terminology, but it had been clear all along that the working group was focusing on sales."

1996-4V2, NAIC Proceedings

 I'm a member of the NAIC working group that developed this regulation and I am terribly disappointed.

  • Tragically, what's come out of this process doesn't do the job.


1995 - SALES ILLUSTRATIONS, Society of Actuaries - 14p

IUL Technical Group – IUL Illustration Actuarial Guideline Majority Proposal January 21, 2015

  • Scott Harrison - 

􀁸 Accordia Life and Annuity
􀁸 John Hancock <ManuLife>
􀁸 Lincoln Financial Group
􀁸 M Financial Group
􀁸 Pacific Life
􀁸 Protective Life
􀁸 RiverSource Life
􀁸 Sammons Financial Group <Midland National Life>
􀁸 Transamerica

Independent Proposal

  • Bobby Samuelson, Executive Editor, The Life Product Review
  • Larry Rybka, President & CEO, Valmark Financial Group
  • Joseph M. Belth, professor emeritus at Indiana University
  • Chris Hause, FSA, President, Hause Actuarial Solutions
  • Scott Witt, FSA, President, Witt Actuarial Services
  • Richard M. Weber, President, The Ethical Edge, Inc
  • Barry Flagg, President, Veralytic
  • Stephen R. Leimberg, Publisher, Leimberg Information Services, Inc
  • Bill Boersma, President, OC Consulting Group
  • Tom Love, VP, Insurance Analytics, Valmark Financial Group
  • Mike Brohawn, President, Your Life Insurance Solution
  • Steven Roth, President, Wealth Management International, Inc.
  • Ben Baldwin Jr, Licensed Life & Disability Insurance Analyst