The latest news on the 2017 Commissioners Standard Guaranteed Issue Mortality table, approved for use back in 2018, suggests a possible return to the 2001 Commissioners Standard Ordinary ultimate mortality table.
State regulators have been saying that the new standard is causing problems for local businesses selling guaranteed issue life insurance.
The National Association of Insurance Commissioners (NAIC) may need to reverse the change in response to challenges from the individual states. Under its brief, NAIC sets the standards for the industry and provides regulatory support to the states. NAIC was created by the insurance regulatory chiefs of the states and territories of the United States to serve this purpose.
NAIC provides the models used by the states to develop legislation and regulatory guidelines for the insurance industry.
The proposed change would affect guaranteed issue life insurance. This variety allows customers to purchase life insurance without any form of medical underwriting. Older citizens in poor health often choose guaranteed issue policies because they couldn’t qualify for ordinary life coverage. The payouts of these policies are usually small, but can be helpful for next of kin in any case.
Questions about the new table arose during NAIC’s recent meeting in Orlando. After hearing complaints from the states, the association’s Life Actuarial Task Force announced it would canvas public comments on a proposal to halt the change to the 2017 table and resuscitate the classic mortality table from 2001.
Nebraska regulator Rhonda Ahrens suggested that flawed analysis of the new mortality table’s impact is the cause of the troubles. “Additional analysis by companies trying to implement the table have shown that use of the table is likely to disrupt the guaranteed issue market,” she said.
For more information, please read:
NAIC May Cancel Shift to New Guaranteed Issue Life Table | ThinkAdvisor