State regulators are moving ahead with efforts to update the rules that govern what customers get when they give up life insurance policies.
Members of the Life and Health Actuarial Task Force, an arm of the National Association of Insurance Commissioners, Kansas City, Mo., have voted during a recent conference call to expose the Standard Nonforfeiture for Law for Life Insurance draft to public review.
The draft of the model includes guidance on the calculation of adjusted premiums by the nonforfeiture net level premium method.
Task force members also talked about the work of the American Academy of Actuaries, Washington, on efforts to update current nonforfeiture requirements.
John McBain, chair of the AAA's nonforfeiture improvement work group, said the work group is developing proposed changes strictly from an actuarial perspective, without considering tax issues or other public policy issues.
McBain said the work group is using the following principles:
- Cash payments in lieu of nonforfeiture benefits need not be required.
- Minimum nonforfeiture mandates should be stated as broadly as possible.
- Any minimum nonforfeiture methodology should be the same for life and annuity products.
