- 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
1984-1, NAIC Proceedings, Reserves Examples
2015-3, NAIC Proceedings - 6-203
Appendix I – Whole Life Net Single Premium Comparison
CRVM Net Single Premiums
2016-1, NAIC Proceedings - 6-335
20 Year Level Premium Term Life Insurance (Cont.
Terminal Reserves for Single Cells — Face Amount
We’re going to actually go through and calculate reserves in detail for this product. The product is a fairly standard product.
- It has a $12.50 per month load.
- It has a guaranteed interest rate of 4 percent.
- It’s a 2001 CSO product, and the current costs of insurance (COIs) are reverse select and ultimate COIs.
- With the COIs, the first 20 years are 90 percent of the guarantees, and then for years 21 and after they are 50 percent.
2005 - Statutory Financial Reporting for Universal Life, Jeffrey A. Beckley, Society of Actuaries
1985 - New Products Accounting Alternatives -Society of Actuaries
asset adequacy approach