News

The Insurance Compact Office is closely monitoring the work of the NAIC toward adjustments to nonforfeiture requirements for individual life insurance and annuity products. Filers are beginning to ask questions in anticipation of final NAIC action on these measures.

Here are basic principles for making related changes to new and previously approved products through the Compact. We will issue more specific guidance as the NAIC timeline advances.

1. Uniform Standards tie nonforfeiture requirements to specific NAIC model laws. Filings responsive to changes in NAIC model nonforfeiture requirements may be approved once the NAIC adopts an amendment to a model law, without waiting for individual state adoptions of the model amendment.
2. Likewise, filings responsive to changes in the NAIC Valuation Manual may be approved once the NAIC adopts an amendment to the Valuation Manual.
3. Prior approval is required to change the interest rate for nonforfeiture values for new issues. See the Variability of Information provision in the applicable Uniform Standards for policies or contracts.
4. The interest rate for nonforfeiture values may be marked as a variable item on policy specifications pages.
5. A filing may be submitted for approval to change the interest rate for nonforfeiture values for new issues and to make the interest rate variable if it was not originally approved as a variable item. See Filing Information 2017-1, Section II.3. This type of filing?using the Supporting Documentation Update filing type?does not require a new form or a new form number if the only change is to the product?s interest rate or other variable items. The filing must include an updated and complete actuarial memorandum and an updated and complete Statement of Variability which reflect the specific nonforfeiture rate for new business, and be associated with the filing(s) where the policies or contracts being updated were originally approved.

If you have any questions about completing the Filing Description in your Compact filing, or about filing with the Insurance Compact in general, please contact the Insurance Compact Office.