NGEs - Non-Guaranteed Elements - AAA - American Academy of Actuaries

  • 1980s - AAA - American Academy of Actuaries
    • Task Force on Non-Guarantee Elements, William T. Tozer, Chair
  • 2000s - AAA - American Academy of Actuaries
    • Non-Guaranteed Elements Working Group
  • The Non-Guaranteed Elements Work Group will review actuarial standards of practice, practice notes, white papers, study notes, and other publications as they relate to current practices regarding the development and ongoing management of non-guaranteed elements within individual life and annuity insurance products and similar group products; and will make recommendations regarding new or revised ASOPs, practice notes, regulations, actuarial guidelines, and educational materials to benefit the public, insurance buyers, agents or regulators.
  • Staff Liaison: Khloe Greenwood
  • Chairperson: Gabriel Schiminovich
  • Samuel Early
  • Laura Hanson
  • David Hippen
    • 1999 - SOA - Universal Life, No-Lapse, and the Law vs. Free Markets, David J. Hippen - 5p
  • Jeffrey Johnson
  • Brian Lessing
  • Donna Megregian
  • Cande Olsen
  • Timothy Pfeifer
  • Francis Radnoti
  • Linda Rodway
  • Lance Schulz
  • Teresa Winer
  • AAA - American Academy of Actuaries -  Because NGEs  are likely to change, the ongoing performance of products with NGEs should be reviewed periodically after purchase to assess the impact of any NGE changes and consider actions that policyholders may wish to take (e.g., adjust premium payments or death benefits).
  • Brenda Cude (University of Georgia) said the issue of NGEs is interesting, but not something the average consumer would understand.
    •  She did not think it was information that was appropriate for a short guide for first-time purchasers.
  • [NGEs = Non-Guaranteed Elements]

2017-3V1, NAIC Proceedings - LIBGWG - Life Insurance Buyer’s Guide (A) Working Group

  • 1986 1030 - Letter - AAA, American Academy of Actuaries to NAIC - RE: NAIC Model Life Insurance Cost Disclosure Regulation
    • Recommended Changes to the NAIC Model Life Insurance Disclosure Regulation - Attachment Two
    • Dear Commissioner Fox:
      • Products that contain non-guarantee charges, benefits or premiums have become a very significant portion of today's life insurance market.
      • Universal life insurance is only one example of such a product.
      • Various insurance departments and members of the American Academy of Actuaries have expressed concerns about sales disclosures used with non-guarantee element products.
      • As a result, the Academy appointed a task force on nonguarantee elements.
      • This task force recommends that the NAIC Life Insurance Disclosure Model Regulation be amended to incorporate the enclosed changes.
      • At the time the latest revision was made in the Life Insurance Disclosure Model Regulation, generally accepted actuarial standards had not been established for dividends paid by stock life insurance companies.
      • As a result the revisions apply only to mutual life insurance companies.
      • Generally accepted actuarial practices have now been developed for dividends paid by stock life insurance companies.
        • As a result we recommend that any references to mutual life insurance companies in a model regulation be eliminated.
        • If the task force can be of any assistance to you, please let me know.

Yours truly, William T. Tozer, Chairman, Task Force on Non-Guarantee Elements

1987-2, NAIC Proceedings 

  • Date-? - Letter -  AAA - American Academy of Actuaries to NAIC Blanks Task Force - Attachment Three - RE: Life Insurance Non-Guarantee Elements
  • To: Honorable Roxani M. Gillespie, Chairman, NAIC Blanks Task Force
  • Dear Commissioner Gillespie:
    • Products that contain non-guarantee charges, benefits or premiums have become a very significant portion of today's life insurance market.
    • Universal life insurance is only one example of such a product.
    • Various insurance departments have expressed concern that adequate information on these new products is not being provided in the annual report to the insurance departments.
    • As a result, the Academy appointed a task force on non-guarantee elements.
    • This task force recommends that the annual statement to the insurance departments be modified.
    • The enclosed are the recommended modifications.
    • These recommendations include a set of instructions, a set of interrogatories and a specimen actuarial opinion.
    • The task force has no suggestion on the placement of these interrogatories in the annual statement.
    • The NAIC may wish to include them with other interrogatories or may feel it is more productive to have them in a separate location. 
    • If the task force can be of any assistance to you, please let me know.

Yours truly, William T. Tozer, Chairman, Task Force on Non-Guarantee Elements

  • INSTRUCTIONS
    • This interrogatory relates to the redetermination of non-guaranteed elements in individual life insurance and annuity contracts which provide for the adjustment of benefits, premiums or charges from time to time.
    • For purposes of this interrogatory, the term "determination" shall mean both determination at issue and subsequent redetermination.
    • For the purpose of this interrogatory, "Individual Contracts" includes contracts issued under the "group" umbrella of any trust which does not have the discretion to select the insurer(s) on behalf of all the individual insureds.
    • The specific types of business encompassed by this interrogatory include, but are not limited to, the following types of contracts if they contain non-guaranteed elements:
      • 1. Single and periodic premium deferred annuities.
      • 2. Universal life contracts for fixed and/or flexible premiums.

1987-1, NAIC Proceedings