Range Approach

  • 2017 10/15 or 19 - LIBWG - Letter from the Non-Guaranteed Elements Work Group of the American Academy of Actuaries

    We believe consumers would benefit from the inclusion of a discussion of NGEs in the buyer’s guide, and think the following points would be helpful:

    • Products with NGEs have the risk that costs could increase or benefits could decrease, subject to guaranteed limits stated in the policy.
    • Illustrations, if available during the purchasing process, can be useful tools to help consumers understand a range of possible product performance outcomes. <Coverage Periods - Benefits>
  • 1988-2, NAIC Proceedings, 1988 0613 - ACLI - Statement on Behalf of the American Council of Life Insurance to the NAIC Market Conduct Surveillance (EX3) Task Force (Attachment 2) - 3p
  • 1988 12 - SOA - Two Approaches to Life Insurance Cost Illustrations, Society of Actuaries - 4p
  • 1988-2, NAIC Proceedings, 1988 0613 - ACLI - Statement on Behalf of the American Council of Life Insurance to the NAIC Market Conduct Surveillance (EX3) Task Force (Attachment 2) - 3p
    • My name is Anthony T. Spano, ACLI
      • At its December 1987 meeting, the NAIC adopted a set of amendments to the model life insurance advertising rules, one of which would require that all sales illustrations be based on the current scale.
      • At the request of the ACLI, your Task Force agreed to give further consideration to this one provision at June 1988 NAIC meeting.
      • Our proposal involves a method known as the "range" approach.
        • ...provide illustrations based on different assumptions.
        • This would serve to demonstrate to the consumer the effect on future benefits of changes in assumptions.
        • Also, illustrations based on other than the company's current scale can provide particularly useful and timely information if a change in experience is anticipated.
  • MARKET CONDUCT SURVEILLANCE (EX3) TASK FORCE
  • 5. Report of Subgroup on Life Advertising Issues
    • Dick Rogers, as chair of the subgroup, called upon Tony Spano (American Council of Life Insurance) to speak to amendments to the NAIC Model Rules Governing the Advertising of Life Insurance.
      • Mr. Rogers noted that amendments to the model had been adopted in December 1987 but that technical amendments were expected.
    • ACLI - Mr. Spano submitted a written report entitled "Statement on Behalf of the American Council of Life Insurance to the NAIC Market Conduct Surveillance (EX3) Task Force, June 13, 1988" - (Attachment Two-3p).
      • Mr. Spano summarized the report stating that the amendments he proposed (attached to his report) involve a method known as the "range approach" which would govern the use of sales illustrations.
    • Mr. Rogers thanked Mr. Spano for his report and moved that the report be received and that the amendments be submitted for exposure at this time for consideration at the December 1988 national meeting.
    • NALU - The task force then heard from William Albus (National Association of Life Underwriters) who commented that if the so-called "range approach" were adopted, it would not necessarily be beneficial.
      • While he asked to reserve further comment as the proposal is further considered, the NALU was opposed to the amendments.
      • However, Mr. Albus noted his support for the current model and support for its continued adoption in the jurisdictions.

1988-2, NAIC Proc.