Q: Is Universal Life Insurance a Traditional Product?

Mrs. KENNELLY. Thank you, Mr. Chairman.

  • Let me pursue that same line of questioning for a few minutes.
  • Let's put aside traditional products and discuss the guidelines on universal life products.

198x - GOV -

  • Our concern relates to the lack of clarity as to the meaning of this paragraph. The words "traditional plan" are particularly troubling. Does this mean a universal life policy, a whole life policy, or a term policy?
  • We are concerned that the vagueness of this wording will once again lead to different interpretations by the reader.
  • Also, we are concerned that this wording may be an attempt to hold the same reserves for universal life insurance and whole life insurance, which we strongly believe is incorrect.
  • Universal life and whole life are entirely different product structures, with different products features, and consumers buy these products for different reasons and purposes.
  • Therefore, reserves for these products should be different.

2004-4, NAIC Proc

  • At your June meeting, your task force received a draft of a proposed revision of the NAIC Life Insurance Solicitation Model Regulation.

This proposal would incorporate the following new features into the model regulation:

Statement on Behalf of the American Council Of Life Insurance (ACLI To The NAIC (A) Committee's Life Cost Disclosure Task Force - November 29, 1982 - p523

1983-1, NAIC Proceedings

  • Future developments are foreseen to include a switching from traditional life insurance to universal life...  (p5)

1982 07 - AAA - (EAR) - Enrolled Actuaries Report - <Actuarial – WishList>

  • (p45) - Q15 - Is the list of products and activities set out in Annex 1 representative of the insurance activities and products that are conducted in the listed jurisdictions? Are there other products and activities that should be added to the list, for example because they have similar features as those in Annex 1? To what extent, if any, will the analysis of the products and activities in Annex 1 allow for the consistent application of the NTNI concept across jurisdictions? Also, are there additional or alternative terms for the listed products and activities that should be added to improve the completeness and clarity of the list?
  • (p47) - Q15 Stakeholders comments
    • Universal life is missing from the list...
      • on behalf of the European GSIIs, Aegon, Allianz, Aviva, Axa and Prudential
      • Association of British Insurers
  • (p48) - Q15 IAIS response
    • (ii) the IAIS decided to discontinue the NTNI product label and to focus on substantial liquidity risk and macroeconomic exposure and their related systemic risk transmission channels, the IAIS believes that it is no longer necessary to proceed with the publication of a list of products as proposed in the CD.

    • It is worth noting that the list of product features, and by extension products considered for the purposes of Phase Il Minimum Guarantees on Variable Product indicator calculation, remains unchanged from the 2013 methodology.

2016 0720 - IAIS - NTNI Consultation Document IAIS Responses to Comments - 51p

  • The mismatch between the cash flows from assets and liabilities for traditional products like universal life or fixed annuities is due mostly to interest rate risk. (p18)

2018 - IAIS - Global Insurance Market Report [GIMAR] - 72p