Weekly Tip: Updated Graded Death Benefit Uniform Standards

 

Weekly Tips

Updated Graded Death Benefit Uniform Standards

11/2/17

On August 5th the Insurance Compact Commission adopted amendments to certain individual life and annuity benefit feature Uniform Standards. These amendments were the result of the Product Standards Committee Five-Year Review of the following Uniform Standards:

These amendments will become effective on November 20th,  and do not require the re-filing of previously approved products. This week, the Insurance Compact Office will continue highlighting the changes that were made to these Uniform Standards, focusing this week on the Additional Standards for Graded Death Benefits for Individual Whole Life Uniform Standards.

As a reminder for all amendments to Uniform Standards, the information pertaining to specific adopted amendments may be found in the Standards History section for each Uniform Standard on the Record, on the Insurance Compact website.

A substantive change was made to the Additional Standards for Graded Death Benefits for Individual Whole Life Uniform Standards related to disclosure of how premium and benefit characteristics of graded death benefit policies differ from other whole life insurance policies. The Specification Page requirements were amended to require a description of how the early duration reduced benefits for death from natural causes are calculated, disclosure of the applicable interest rate or other coefficient, and tabular presentation of cash values and paid up nonforfeiture benefits, including a presentation of the early duration reduced benefits for death from natural cause and the ultimate death benefit for subsequent policy years.

In addition to the substantive change, the new amendments to this Uniform Standard clarify that the actuarial memorandum must describe and provide an example of how the average amount of insurance is determined in calculating adjusted premiums for the nonforfeiture demonstration.

If you have any questions about this Weekly Tip, or the Insurance Compact, please contact the Insurance Compact Office.