The National Association of Insurance Commissioners (NAIC) has issued Actuarial Guideline 49-A (AG49-A) containing updated rules for illustrations of indexed universal life products. Effective November 25, 2020 all new indexed universal life policies must use an AG49-A compliant illustration, which may result in a lower maximum illustrated rate for some indexed accounts, including indexed loan accounts, and additional interest credits due to indexed account multipliers.
We are starting to see announcements come through on how this will affect specific carriers and their products. We will continue to update our agents as things progress. See below for announcements from Pacific Life, Penn Mutual and John Hancock:
Pacific Life
PRODUCTS IMPACTED
- Discovery Xelerator IUL (PDX IUL2)
- Indexed Accumlator 6 (PIA 6)
- Indexed Estate Preserver 3 (IPEP3)
KEY TRANSITION DATES FOR NEW BUSINESS
- Applications received in good order by Sept. 30, 2020 will receive priority processing for AG 49 compliance purposes.
- Initial premium must be paid by Nov. 24, 2020.
- Policy must be delivered to the policy owner, with policy delivery receipt signed by Nov. 24, 2020.
- Policy delivery receipt must be received in Life Insurance Division by Dec. 18, 2020.
Penn Mutual
PRODUCTS IMPACTED
- Accumulation Builder Flex Indexed Universal Life
- Survivorship Plus Select Indexed Universal Life
KEY TRANSITION DATES FOR NEW BUSINESS
- Effective November 1, 2020, the Life Solutions Illustrator will limit max illustrated rates for new business cases to the maximums required to comply with AG49-A.
- New business cases illustrated prior to November 1, 2020, must be issued, with initial premium payments received in the Home Office by November 24, 2020, to use the previous max illustrated rates.
- Any new business or 1035 exchange cases illustrated prior to November 1, 2020, that are not issued and paid to product minimum funding requirements by November 24, 2020, will require a new, signed AG49-A compliant illustration.
John Hancock
PRODUCTS IMPACTED
- IAccumulation UL '19
- Protection IUL '19
- Protection Survivorship IUL '19
Note: Accumulation '20 launched 9/21/20 and will be run under the new AG 49A guidelines.
KEY TRANSITION DATES FOR NEW BUSINESS
- November 9th: JH Illustrator and Winflex web will be updated so illustrations of these products will comply with the new regulation.
- November 24th: By this date, John Hancock must have provided a final underwriting offer, received all administrative requirements to issue the policy, and received at least the minimum initial premium to place the policy in force
- Any policy placed November 25th or after will require an illustration run under the new AG49-A guidelines.
Call or email with questions or for more information:
