Weekly Tip: Return of Premium Product Filings


Weekly Tips

Return of Premium Product Filings


Are you interested in submitting a policy that includes a Return of Premium benefit to the Insurance Compact in the near future? If so, then we have a few points for you in this week’s Weekly Tip.
The Insurance Compact has a stand-alone Uniform Standard for Return of Premium that applies to individual life insurance policies, other than variable and non-variable adjustable life policies and current assumption whole life policies, that provide for an endowment benefit payable at a known intermediate duration during a longer period of life insurance protection. The premium rate scale during the endowment period must be guaranteed. The endowment benefit can be built-in or added to such policies at issue by rider, amendment or endorsement.
Even though the stand-alone Uniform Standards for Return of Premium benefits do not apply to certain types of life insurance policies, companies can file return of premium or enhanced cash value features for variable and non-variable adjustable life policies and current assumption whole life policies which provide for a higher cash surrender value. These features should utilize the underlying base policy Uniform Standards. A Return of Premium Rider or Enhanced Cash Value for use with a UL, VUL, or CA policy cannot utilize Mix & Match because an IIPRC approved form cannot alter, change, or affect values or nonforfeiture requirements on state approved forms.
When the Insurance Compact reviews the policy with the Return of Premium or enhanced cash value benefit feature, the feature is reviewed to ensure that the nonforfeiture requirements of the underlying Uniform Standards are satisfied. In addition to reviewing with the underlying life insurance policy Uniform Standards, the Additional Standards for All Benefit Features are used. Some examples of what may be submitted and reviewed by the Insurance Compact using the underlying life insurance policy Uniform Standards include Return of Premium, Reduced or Waived Surrender Charges, or Enhanced Cash Values benefits. Actuarial memoranda are required for these additional benefit features.
The IIPRC Office also would like to take this opportunity to remind you that we are currently accepting applications for the 2016 Focus Group. More information may be found under News and Announcements on the IIPRC website. We hope that you would take this opportunity to help us make the Compact filing experience more productive and efficient for you and your colleagues.
If you have any questions about these requirements or the Weekly Tip, please contact the IIPRC Office.