News

For those uniform standards that include actuarial requirements, one of the requirements is for the actuarial memorandum to include a description of the policy, contract or benefit feature that impacts nonforfeiture requirements. Avoid the temptation of copying form provisions directly from the form and pasting into the actuarial memorandum to satisfy this requirement. Rather, best practice is to describe the form provisions from an actuarial perspective while explaining their impact on all contract values including nonforfeiture values. Describing the provisions from an actuarial perspective often helps provide a better understanding of the various provisions.  

Below is an example of form language appearing in the actuarial memorandum instead of describing the form provisions from an actuarial perspective. The use of the terms "you" and "your" indicate that the language appearing in the form was copied into the actuarial memorandum instead of explaining the form provisions from an actuarial perspective. 

Example of Ineffective Description: 
Income Payment Calculation: Your annual income payment amount equals: 
  a) your income account value on the day your income payments begin;
     multiplied by
  b) the applicable benefit payout percentage. 

If, on the day before income payments are to begin, your contract value is greater than your income account value, we will increase your income account value to equal your contract value. 
Stopping and Restarting Payments: You may stop and restart income payments at any time, although your income payments may decrease. When you choose to restart, your new annual income payment amount will equal: 
  c) the original benefit payout percentage; multiplied by 
  d) your then current contract value or your then current income account value, 
     whichever is greater.