Advisors Blog

New AG49-A Regulation and How it Will Impact Your Clients - Effective May 1, 2023

The landscape of Indexed Universal Life (IUL) illustrations will be changing once again effective May 1, 2023. The National Association of Insurance Commissioners (NAIC) is looking at updating Actuarial Guideline 49 (AG49) which dates back to 2015 when the first version was introduced.

AG49-A “version 2.0” will effectively put an end to using bonuses and multipliers that add additional accumulation value to an illustration (aside from the annual projected index credit). The result is another shift toward more conservative illustrations potentially impacting the way these products are sold. Click below for more details on what to expect after AG49-A 2.0 goes into effect.

How the New AG 49A Update Will Impact Allianz’s Illustrated Values

New updates to AG 49A regarding the maximum illustrated rate for fixed bonus allocations go into effect industry-wide on May 1, 2023.

As a result of these updates, the maximum illustrated rate for Classic Bonus using the Bloomberg US Dynamic Balance II ER Index and PIMCO Tactical Balanced ER Index will drop from 7.08% to 5.74%, effective May 1, 2023.

COVID-19 Underwriting Update

Effective immediately, Cincinnati Life is removing Covid-19 underwriting restrictions with one modification: Proposed insureds age 80 and over can now be considered, however, no table ratings or flat extras are permitted.

Important details about the transition for AG49-A (May 2023 revisions)

Effective May 1, 2023, John Hancock will increase the participation rates on the Barclays indexed accounts for new and inforce Protection IUL (PIUL) and Protection SIUL (PSIUL) customers.

Additionally, on May 1, 2023, the National Association of Insurance Commissioners (NAIC) will enact enhancements to Actuarial Guideline XLIX (AG49-A). By this date, all illustrations of indexed UL (IUL) products sold by John Hancock and all US insurers must comply with these new regulations. For John Hancock, this will impact the illustrated rates for the following accounts: Barclays Global MA Classic, Barclays Global MA Bonus, and the Base Capped Two Year. For additional information, please click below.

Upcoming Illustration Changes for Indexed UL Products (AG49-A update)

Revisions to Actuarial Guideline 49-A (AG49-A) were adopted by the National Association of Insurance Commissioners (NAIC) to update the existing AG49-A guideline that is applicable to all Indexed Universal Life (IUL) products. The changes will be effective on Monday, May 1st, 2023. They are prospective only, so will not apply to any new business or future in-force illustrations for any policies that meet the transition rules.

The main points to know about the AG49-A updates

• Intent of Regulators – Illustrations of volatility-controlled indices (VCIs) plus any fixed bonus should not illustrate more favorably than a traditional capped S&P 500 indexed account.
• What's changing? – Adding an additional restriction to IUL maximum illustrated rates.
• Illustration impacts - Likely that only VCI accounts are impacted, where the maximum illustrated rates will be reduced to not illustrate better than S&P accounts.
• Policyholder impacts – Will only impact illustrations for policies sold on or after 5/1/2023.

Transition Rules

Formal applications or tickets (with all solicitation forms) that are signed, dated, and received by Lincoln’s home office in-good-order on or before April 30, 2023 will not be subject to the illustration guideline changes. Any IUL application/ticket received after April 30, 2023 will be subject to the new AG49-A illustration guideline changes.

Affected Products

In accordance with AG49-A updates, Lincoln will be adjusting the maximum illustrated rates for all currently sold Indexed UL products effective May 1, 2023. The following chart shows the new maximum illustrated rate under the AG49-A updates.

Introducing MassMutual Underwriting Sweet Spots

Check out this Underwriting Sweet Spots flyer to help you identify life insurance cases that may be a good fit for MassMutual.

CareMatters II California Launch - Effective April 17, 2023

On April 17, 2023, Nationwide is introducing Nationwide CareMatters® II to the state of California. CareMatters II will offer more accessibility, a broader appeal, expanded features and more opportunities for you to help your clients. Most importantly, CareMatters II continues our tradition of paying cash indemnity long-term care benefits. That helps clients pay for their care the way they want it: in a familiar environment, be it in their own home or in their community.

At launch, applications can be submitted using Nationwide's new Porch electronic submission platform. Paper applications will also be available; these can be found on iPipeline or by contacting our sales desk.

PL Promise Term Reprice - April 3, 2023

Effective April 3, 2023, Pacific Life Insurance Company is adjusting rates to be more competitive for PL Promise Term level premium term life insurance. This reprice places PL Promise Term in the Top 3 for 91% of no-nicotine risk classes cells across all ages and face amounts.

Transition Period

A 60-day transition period is provided. The new PL Promise Term rates go into effect beginning April 3, 2023. Cases that are issued (for delivery) through June 1, 2023 automatically receive the better of the old and new PL Promise Term rates. No request is necessary. Cases that are issued after June 1, 2023 receive the new PL Promise Term rates.

One Class Upgrade Program

Give your clients the underwriting boost they deserve with Symetra’s One Class Upgrade Program. It’s designed to move clients one underwriting rate class up to bring their overall insurance premiums down.