Interest-Indexed Universal Life Insurance Policies

Interest-Indexed Universal Life Insurance Policies A. Initial Filing Requirements. The following information shall be submitted in connection with any filing of interest-indexed universal life insurance policies (“interest-indexed policies”). All such information received shall be treated confidentially to the extent permitted by law. 1. A description of how the interest credits are determined, including: a. a description of the index. b. the relationship between the value of the index and the actual interest rate to be credited. c. the frequency and timing of determining the interest rate. d. the allocation of interest credits, if more than one rate of interest applies to different portions of the policy value. 2. The insurer’s investment policy, which includes a description of the following: a. how the insurer addressed the reinvestment risks. b. how the insurer plans to address the risk of capital loss on cash outflows c. how the insurer plans to address the risk that appropriate investments may not be available or not available in sufficient quantities. d. how the insurer plans to address the risk that the indexed interest rate may fall below the minimum contractual interest rate guaranteed in the policy. e. the amount and type of assets currently held for interest-indexed policies. f. the amount and type of assets expected to be acquired in the future. 3. If policies are linked to an index for a specified period less than to the maturity date of the policy, a description of the method used (or currently contemplated) to determine interest credits upon the expiration of such period. 4. A description of any interest guarantee in addition to or in lieu of the index. 5. A description of any maximum premium limitations and the conditions under which they apply. B. Additional Filing Requirements. 1. Annually, every insurer shall submit a Statement of Actuarial Opinion by the insurer’s actuary similar to the example contained in subsection C of this Section. 2. Annually, every insurer shall submit a description of the amount and type of assets currently held by the insurer with respect to its interest-indexed policies. 3. Prior to implementation, every domestic insurer shall submit a description of any material change in the insurer’s investment strategy or method of determining the interest credits. A change is considered to be material if it would affect the form or definition of the index (i.e., any change in the information supplied in Section 1 above) or if it would significantly change the amount or type of assets held for interest-indexed policies. C. Statement of Actuarial Opinion for Interest-Indexed Universal Life Insurance Policies. I, _________________________________, am ______________________________________ (name) (position or relationship to Insurer) ___________________________________for the XYZ Life Insurance Company in the state of (The insurer) ______________________________. (State of Domicile of Insurer) I am a member of the American Academy of Actuaries (or if not, state other qualifications to sign annual statement actuarial opinions). I have examined the interest-indexed universal life insurance policies of the Insurer in force as of December 31, 19__, encompassing _________ number of policies and $_________ of insurance in force. I have considered the provisions of the policies. I have considered any reinsurance agreements pertaining to such policies, the characteristics of the identified assets and the investment policy adopted by the Insurer as they affect future insurance and investment cash flows under such tests and calculations as I considered necessary to form an opinion concerning the insurance and investment cash flows arising from the policies and related assets. I relied on the investment policy of the Insurer and on projected investment cash flows as provided by ____________________________, Chief Investment Officer of the Insurer. The tests were conducted under various assumptions as to future interest rates, and particular attention was given to those provisions and characteristics that might cause future insurance and investment cash flows to vary with changes in the level of prevailing interest rates. In my opinion, the anticipated insurance and investment cash flows referred to above make good and sufficient provision for the contractual obligations of the Insurer under these insurance policies. ________________________________ Signature of Actuary