Midland big cap reduction

[CFP83]

Just got a call on friday from my regional that midland is reducing caps on all closed iul products/books of business by 2%. The currently sold products will have a 1% reduction. This will take place around 11/15.

I have heard from a producer on penn mutuals advisor councel that penn is preparing for another 1% reduction as well.

 

[jboussea]

we can expect NA to be reduced accordingly... I don't mind a cap reduction but I don't like it when there's a discrepancy between open book of business and new business.

 

[AndrewRoche]

What is their rationalization for the rate reduction?

 

[Carol Perez]

Yeah, I was also wondering the same!

 

[paulallred]

Sounds like the options they bought didn't workout as well as expected and/or they wanted to slow their exposure down some by discouraging new business for awhile.

There are much better IUL carriers out there and I'm a longtime fan of Midland/NA, private message me and I'll explain

 

[jboussea]

did they actually do this ? haven't received any emails

 

[scagnt83]

did they actually do this ? haven't received any emails

Yes, they lowered them. Most of the major IUL carriers lowered Caps over the past few years on inforce business. With interest rates so low, its hard to blame them. The Caps are highly dependent on the 10 year treasury rate.

 

[gkatzfinancial]

Yes -- I just noticed as well new caps on existing business were lowered the 2%.. It's disappointing. I believe similar to @scagnt83 that it has to do with the low interest rate environment we are in.

 

[paulallred]

That’s why I like the no spread/no cap IUL Contracts

 

[pfg1]

That’s why I like the no spread/no cap IUL Contracts

Such as...?