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AG49-A

 

As of 09/30/2020

 

Effective December 14, 2020

What is it?

In mid-June of 2015, the NAIC adopted Actuarial Guideline 49, officially titled “The Application of the Life Illustrations Model Regulation to Policies with Index-Based Interest.” AG 49 was developed to bring uniformity to the illustrations of policies tied to an external index or indices by providing a reasonable cap on the illustrated credited rate. Uniformity across illustrations helps clients to more easily compare the policies of different companies.


There are three primary goals of the AG49:
 

  1. Providing guidance in determining a maximum illustrated index credited rate and an earned interest rate for the Disciplined Current Scale (DCS),
  2. Limiting the amount of policy loan leverage for so-called indexed (or “participating”) loans, and
  3. Requiring additional disclosures not required in non-indexed UL illustrations.


AG49 represented a significant new event in illustrations of the industry’s fastest-growing product, but over time as innovation occurred, the original needed to expand to incorporate the new features available within these products. An updated Guideline AG49-A was finalized on August 14, 2020.
 

Read the final details (PDF)
 

Hear from Lincoln’s Product Manufacturing Team
 

What does this mean for you?

  • The insurance companies may need to adjust their illustrations to comply with AG49-A for any IUL products sold on, or after, December 14, 2020
  • If you are managing existing IUL policies for your clients, in-force illustrations will remain the same
  • Variable Universal Life policies – even with indexed accounts – are not affected by AG49 or AG49-A

How do you do business with Lincoln?

  • If you are working on the following products, you need to submit in-good-order applications by December 11, 2020 to secure pre-AG49-A illustration requirements:
    • - Lincoln WealthAccumulate® IUL (2019)
    • - Lincoln WealthPreserve® IUL (2019)
    • - Lincoln WealthAdvantage® IUL - New York
    • - Lincoln WealthPreserve® IUL (2017) - New York
  • Formal applications or tickets (with all solicitation forms) that are signed, dated and received in Lincoln’s home office in good order on or before December 11, 2020 will not be subject to the illustration guideline changes. Trial applications do not satisfy this requirement.
  • Any IUL application/ticket received after December 11, 2020 will be subject to the new AG49-A illustration guideline changes.
  • Post-issue policy management: Lincoln has the support you need to manage your IUL policies and provide clients with accurate illustrations.  Learn more about post-issue policy management.

    

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Additional Coronavirus legislation and relief is likely to be forthcoming from the 117th Congress later in 2021, so more to come.

Lincoln Financial Group® affiliates, their distributors, and their respective employees, representatives and/or insurance agents do not provide tax, accounting or legal advice. Please consult an independent professional as to any tax, accounting or legal statements made herein.