Did you Bracket your Rates? SDU Requirement Reminder

Weekly Tips

Insurance Compact Weekly Tip - Did you Bracket your Rates? SDU Requirement Reminder


This weekly tip focuses on what is required when submitting a Supporting Documentation Update to change the interest rates for nonforfeiture values on a previously approved life insurance product. If your company did not have the original nonforfeiture rate bracketed on the specifications page, then you are required to submit more than just the actuarial memo; the specifications page must be revised to reflect that change as well. You must submit a sample of the approved specifications page on the Supporting Documentation tab under a separate line item. This specifications page should be exactly the same as the originally approved except that you will have added the brackets around the interest rate (i.e.  [3.75%]). The form number of the specifications page should not change and should reflect the approved form number. The Compact Office is seeing filings where the sample specifications page and updated statement of variability are missing from the filing.  

With this new bracketing, you are also required to submit an updated statement of variability under the Statement of Variability section located on the Supporting Documentation tab. This updated statement of variability will be exactly the same as approved in the original filing, except it will now include an explanation for the nonforfeiture interest rate. Your updated statement of variability must also reflect that the nonforfeiture interest rate will only change upon prior approval. For instance: "The nonforfeiture interest rate used is 3.75% and will only change upon prior Compact approval."

For additional guidance on filing changes to the interest rates for nonforfeiture values please see  7702 Revisions Resource Page and  FIN 2020-1 New, Amended and Refiled Product Filings due to Changes in Interest Rates for Nonforfeiture Values in Life Insurance Products

If you have additional questions, please contact the Insurance Compact Office.