Ready for Review- Changing or Adding New Indices for Annuity Products

Companies that offer Compact-approved individual annuity products with index features will want to pay attention to this Weekly Tip, in which we address the best practice for updating and adding to the list of available indices for a product.

The Additional Standards for Index-Linked Crediting Feature for Deferred Non-Variable Annuities and the General Account Portion of Individual Deferred Variable Annuity Contracts, Additional Standards for Index-Linked Payment Adjustment Benefit, and the Additional Standards for Market Value Adjustment Feature Provided Through the General Account and Separate Account require that any change to an index or addition of a new index be provided for prior Compact approval. Uniform Standards require the specification page to identify by name any index used and for the actuarial memorandum to contain a description of the index. Updates to this information can be made by submitting a Supporting Documentation Update (SDU) filing. In the SDU filing, these changes can be accommodated through a revised statement of variability and actuarial memorandum addendum. The revised statement of variability will show any changes to the index name or the addition of a new index. The actuarial memorandum addendum will show only an updated list of available indices. Please see Section II.C.1 of FIN 2017-1 regarding revising variable items that require prior approval. As with all SDU filings, the company filer is required to connect the original filing submission to the new filing submission using the Associated Filing feature. The Compact filing fee for filings requiring actuarial review would be due.

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