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 - 22p

  • 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, [Bonk: a consulting actuary with Tillinghast in Atlanta - Years-?]

1981 - SOA - Universal Life (RSA81V7N412), Moderator: Samuel H. Turner, Society of Actuaries - 16p 

  • 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 - Book - Statutory Valuation of Individual Life and Annuity Contracts | 5th Edition, Donna 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 - 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 - 26p