(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.
(i) 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.
(ii) 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.
(iii) 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.
(iv) A description of any interest guarantee
in addition to or in lieu of the index.
(v) A description of any maximum premium
limitations and the conditions under which they apply.
(b) Additional Filing Requirements.
(i) 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.
(ii) 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.
(iii) 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 subsection (a) 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 (The Insurer) in the state
of ____________.
(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, 19XX,
encompassing____________number of policies and $____________of insurance in
force.
I have considered the provisions of the poHcies. 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 policies and related assets. My examination included 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 and 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