Universal Life Insurance does not "Fit" into the existing regulatory framework

  • This regulation is designed to address those areas where universal life insurance does not “fit” into the existing regulatory framework.  (p1)

NAIC - Universal Life Insurance Model Regulation (MDL-585) - [LINK]

  • New York reports that they have determined that Section 216 and 208, (a) and (b), and perhaps other sections of their law, prohibit the issuance of universal life type products.
  • Their law is currently being amended to permit such policies.

1982-2, NAIC Proceedings

  • Traditional plans are fairly simple in their structure.
  • One can look at their premiums, their cash values and their dividends, if there happen to be any.
  • Universal life presents something of a paradox.

 -- BEN H. MITCHELL

1981 - Universal Life, Society of Actuaries

In December of 1983, the National Association of Insurance Commissioners adopted the Universal Life Insurance Model Regulation that sets forth minimum reserve standards for universal life policies.

  • These standards represent an effort to fit universal life into traditional valuation methodologies. 
  • An assumption was made regarding future premium payments, and a factor was developed to adjust for actual policy performance.

2018 -Statutory Valuation of Individual Life and Annuity Contracts | 5th Edition -- Claire, Lombardi and Summers

  • Just as universal life was a quantum leap over traditional products administratively, variable universal life is a quantum leap over universal life.

--  ZAFAR RASHID

1985 - SOA - VARIABLE UNIVERSAL LIFE INSURANCE, Society of Actuaries - [PDF-22p]

  • Bill White, chief actuary, New Jersey, reported on their special project pertaining to universal life.
  • Their commissioner, on June 25, 1982, declared an 81-day moratorium on "Universal-Flexible Factor" type of policies.  

1982-2, NAIC Proceedings

  • I think most of us have probably been involved in UL product development and recognize it to be a quantum leap in product design theory as opposed to the jiggling that we used to do in trying to innovate within our product portfolios.

--  ALLEN D. BOOTH

1982 - SOA - UNIVERSAL LIFE- THREE DIFFERENT VIEWPOINTS: STOCK, MUTUAL, CANADIAN - [PDF-26p]