MIB Update, Nonforfeiture Interest Rate Update, AG38 Update
We have been getting many questions about how the Insurance Compact is handling the need for filers to update their MIB authorization language and/or to change their interest rates for nonforfeiture values whether in the specifications page or in the policy. Companies are also wondering if they have to update their Compact-approved filing because of a change in their valuation rate. Companies are gearing up to file new products or amend existing products to address revised Actuarial Guideline 38 recently approved by the National Association of Insurance Commissioners. The Insurance Compact can be your one-stop solution for all of these updates and here are some helpful tips to use when making a new product filing or updating a previously-approved product filing.
MIB Updates: Companies may easily update Compact-approved forms to revise the MIB authorization language by sending a Note to Reviewer requesting to reopen the particular filing for this purpose. No additional IIPRC filing fees will apply if the filer adds the forms with the revised authorization language and a certification under Supporting Documentation that no changes other than the revisions to the MIB authorization have been made. Please note that state fees may apply and the IIPRC has published the Member Fees for MIB Updates located on the Insurance Company Resources page of its web site.
Changes in Nonforfeiture Interest Rates: The Insurance Compact just issued a Filing Information Notice (FIN) 2012-3 providing guidance to filers wishing to update their interest rates for nonforfeiture values. The Uniform Standards require prior approval of a change to the interest rate for nonforfeiture benefits when the change is different than the ranges in the applicable Statement of Variability or in the policy. If the interest rate is in the specifications page, a filer can make a new product filing or reopen and amend a previously-approved Compact filing. If the interest rate is in a Compact-approved policy, a filer should make a new filing with the applicable endorsement or amendment or new or replacement policy. Please note that endorsements or changes to state-approved policy forms that change the interest rate on nonforfeiture values in the state-approved policy cannot be submitted to the Insurance Compact under mix and match. Please review FIN 2012-3 as it provides a list of information that should be provided when making new, amended, or refiled product filings due to changes in interest rates for nonforfeiture values in life insurance products. Please note amended or new IIPRC filing fees may apply.
Changes in Valuation Interest Rates: The Insurance Compact is required to review applicable product filings for compliance with the Standard Nonforfeiture Law and does not review, approve or have authority for compliance with the valuation or reserving of the underlying products which must comply with applicable state laws. Filers are not required to update the supporting documentation including the Actuarial Memorandum in a previously-approved Compact product filing if the only change being made is to the valuation interest rate and not the interest rate on nonforfeiture values. However, if the valuation interest rate is stated in the policy and is being changed, a filer can use the same procedures when making new, amended or refiled product filings due to change in interest rates for nonforfeiture benefits as provided in FIN 2012-3. Please note if the filer adds a certification that the only change being made is the valuation interest rate, no IIPRC filing fee will apply.
Changes in Universal Life Products to address revised Actuarial Guideline 38: If a company must file new product forms to address revised Actuarial Guidance 38 (AG 38), we encourage you to consider submitting the product filing to the Insurance Compact for one review and approval on behalf of 41 Compacting States. The Insurance Compact has Uniform Standards for a variety of variable and non-variable universal life insurance products accommodating several benefit features including secondary guarantees. Filers are requested to utilize the applicable Reviewer Checklists found alongside the applicable Uniform Standards and to follow the tips and tools found on the Insurance Company Resources web page to maximize compliance and minimize the review time. The Insurance Compact is geared up to work with filers to help meet the time sensitive nature of these new product filings. Filers should indicate within their filing description that the product filing is being made to address AG 38 and a reference to previously-approved Compact filings that the new product filing is replacing, if applicable. Filers are encouraged to contact the IIPRC Office if they have questions regarding the Uniform Standards or the filing process before they make a Compact filing. Our goal is to work with filers before and after product filing submission to minimize review time and maximize turnaround time.
If you have any questions about any of the information that is in this e-mail, please contact the IIPRC Office for additional information and assistance.