‘Take this as a win’: NAIC creates new life insurance illustration group
The National Association of Insurance Commissioners is creating a new working group to address life insurance and annuity illustrations.
The aptly named Life Insurance and Annuities Illustrations Working Group will: “Evaluate concepts for improving life insurance and annuity illustrations and disclosures, and consider revisions to relevant NAIC models or develop other guidance where feasible and appropriate.”
Ben Slutsker, director of life actuarial valuation at the Minnesota Department of Commerce, will chair the new group, which will report to the Life Insurance and Annuities (A) Committee.
Wayward illustrations continue to draw controversy as critics, many of whom work in the industry, say consumers are being shown inflated returns that are unlikely to come true.
Still, regulators have resisted calls to more aggressively regulate illustrations. A working group assigned to the Life Actuarial Task Force considered various illustration issues from an actuarial standpoint in recent years, but it “makes sense” to move that work to the A Committee, said Judi French, director of the Ohio Department of Insurance.
The timing baffled Birny Birnbaum, executive director of the Center for Economic Justice.
CEJ “proposed this charge nearly every year, from 2016 through 2023, and those requests were always rejected,” Birnbaum said. “My question is, why is the charge being offered now? What concerns have been raised and by whom?”
“I think you should take this as a win,” French replied. “Now that they’ve made progress within LATF, the thought was to make it into a broader A Committee charge. So, it’s a continuation of the work that they accomplished, but I see this as a broader charge.”
The A Committee is also creating the Annuity Buyer’s Guide (A) Working Group, which will: “Review and revise the NAIC Buyer’s Guides for Deferred Annuities in light of changes in the marketplace.”
The committee voted unanimously to create the new groups, which New York abstaining.
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