Revising the GMIR for Insurance Compact-Approved Policies
In connection with current national economic conditions, the Insurance Compact has received questions regarding if and how a company can change the policy Guaranteed Minimum Interest Rate (GMIR). The GMIR may be lowered for new issues of an Insurance Compact-approved policy, and the filing approach varies by the approach taken to identify the GMIR in the previously approved filing. The Variability of Information section of the Uniform Standards for each applicable product provides that the GMIR for account value may be bracketed to denote variability and may be changed upon prior approval.
FILING NOT REQUIRED if the GMIR is:
- a variable item on the filed policy, the statement of variability provides a range, the new rate will be within that range, and the actuarial memorandum demonstrates nonforfeiture compliance for all values in the range for which the GMIR will vary.
FILING REQUIRED if the GMIR is:
- a variable item on the filed policy and the statement of variability provides a range but the actuarial memorandum demonstrates nonforfeiture compliance for only the then current GMIR;
- a variable item on the filed policy and no range is provided in the statement of variability or the company wishes to use a value outside of the filed range; or
- not a variable item.
If a filing is required as described above, compliance could be reached with a Supporting Documentation Update filing to (1) revise approved variable or (2) make a non-variable item variable going forward. For information on submitting a Supporting Documentation Update filing please review FIN 2017-1.
Please remember that any filing to revise the GMIR requires an actuarial memorandum demonstrating nonforfeiture compliance for the requested GMIR, and if a range is provided in the statement of variability then the actuarial memorandum must either (1) demonstrate nonforfeiture compliance for all values in the range for which the GMIR will vary or (2) include only the current GMIR and state that any change or modification to the GMIR will be submitted to the Insurance Compact for prior approval.
An alternative option for revising the GMIR would be a new filing that provides an endorsement to the policy and an actuarial memorandum. Note that such an endorsement could only be attached to new issues and cannot be used to change inforce policies.
Do not forget the Insurance Compact?s Expedited Review Program should you need a filing reviewed and approved quicker than the average turnaround time. More information regarding the process may be found on the Insurer Resources page of the Insurance Compact website.
If you have further questions regarding changing the GMIR on an approved product or making other changes to Insurance Compact-approved products, please contact the Insurance Compact office.