Get your inforce ledgers

[Lloyds of Lubbock]

Nobody is collapsing anything.
The point was if you are looking at inforce to use the new guidelines, it is not. LOL

 

[PrivClientSG]

Nobody is collapsing anything.
The point was if you are looking at inforce to use the new guidelines, it is not. LOL

Oh, I disagree. Re-read the posts.

Some companies have already said their intention is to apply the new regulation to their inforce business. If 10 companies say so, I wonder how many actually will. When the original "NAIC conformed" illustration guidelines (which applied to UL policies) came about, numerous companies said they thought it was an excellent idea, and although not required, they were going to apply the guidelines to their illustration software system...and then when they saw how some of their products actually illustrated, and also how some of their inforce business illustrated...they changed their mind. I wonder why.

 

[Lloyds of Lubbock]

It is certainly your right to disagree.
Does the new reg require changes to inforce...the answer is no.
Will that stop a company from applying to inforce, maybe.
"and then when they saw how some of their products actually illustrated, and also how some of their inforce business illustrated...they changed their mind. I wonder why."
All these companies are very creative.
Everytime a new regulation came out they figured a way around them.
Lower the interest rate....now you have a bonus.
Robbie Samuelson has a great piece on this.
You don't need company permission to run your illustration (iul and wl) at a lower rate.

 

[scagnt83]

I can confirm that multiple IUL carriers are changing in-force illustrations due to AG49B.

I just spoke to an agent yesterday who saw a 40% drop in projected values on the inforce vs. the sales illustration from 2 years ago.

This is one of those "grey areas" that is not clear in the regs and carriers are using their own interpretations.

There is nothing in the regs saying yes or no either way, to my knowledge.

I would expect the NAIC to clarify this at some point in the future.

I feel the INTENT of the law is for it to apply to ALL illustrations. Not just new biz. Why would they want AG49A to apply to everything... but not the updated version that addresses the loopholes?

 

[Lloyds of Lubbock]

If they wanted it to apply to everything including inforce, that is how the reg would have been written....it wasn't.
While what you feel makes sense if an admin system needs to be changed or updated most companies are not going to do it.
Don't think the NAIC is such a governing advocate for the public.
Year ago (I am sure PrivClient remembers this), expenses on whole life could be administered 3 ways. (Based on my memory)
Fully allocated expenses (you illustrate what you charge)
GRET table Generally Recognized Expense Table
Marginal Expenses The expenses on a block of business are born by the existing policyholders. Not reflected in new business illustrations.

So why would companies use anything other than fully allocated expenses?
Because the could illustrate better. Fully endorsed by the NAIC.

If 40% value was lost, some of that could be due to the returns in the past two years.
Also what did he illustrate? The highest interest rate with the biggest bonus?

You dont need an illustration reg to do the right thing for your your client.
If you are showing a premium offset, show another ledger with a lower interest rate.
If you are showing income coming out do the same thing.
You will end up with a stronger block of business and much less headaches.