Crunch-Time Ways to Update Nonforfeiture Interest Rate in Compact Filings
Is your company rushing to file and implement nonforfeiture values for individual life insurance products before the January 1, 2022 regulatory deadline? If so, the Insurance Compact Office recommends filers simplify and streamline filing submissions subject to this deadline. Review of a full product with associated riders and applications submitted between now and the end of the year may not get to approval by the end of the year. The Insurance Compact has processed all-time high levels of filings this year in the normal and expedited review queues.
To this end, the Insurance Compact Office has pulled together a list of the simplest ways to update the nonforfeiture interest rate in life insurance product filings. As a reminder, the interest rate basis of state-approved products cannot be updated through a Compact product filing.
Short of a full product filing, the most common method to update the nonforfeiture interest rate basis is to provide revised specifications pages and revised actuarial memorandum and Statement of Variability. The options are:
- New specification page with new form number
- Insert page if the interest rate is in the policy pages
- Updated Statement of Variability with the nonforfeiture interest rate bracketed on specifications page
- If the product does not develop cash value, update the actuarial memorandum to demonstrate this remains true using the updated nonforfeiture interest rate
Each of these methods requires an updated actuarial memorandum. The limited nature of the new form or update simplifies the review involved and should result in a quicker turnaround time, provided the filing is compliant with applicable uniform standards and does not contain revisions extraneous to the nonforfeiture interest rate change.
If you are interested in a quicker review, the expedited review process is an optional way for companies to obtain review of life and annuity products on an expedited basis. The Expedited Review Program will not sacrifice a detailed, quality review or diminish compliance with the applicable Uniform Standards. Detailed Information pertaining to the program can be found on the Insurer Resources page of the Insurance Compact website along with a step-by-step guidance to assist with submitting your request to the Insurance Compact Office.
The Insurer Resources page of the Insurance Compact website, specifically the Filing Reference Material section and the Weekly Tip Archive, has all the guidance you might need to prepare a nonforfeiture interest rate change filing submission. If you have any questions these updates in your Compact filing, or about filing with the Insurance Compact in general, please contact the Insurance Compact Office.