Summary of the Fourth Amendment to 11 NYCRR 98 (Insurance Regulation 147)

The Fourth Amendment to Insurance Regulation 147 provides revised reserve standards for universal life with secondary guarantee policies.

Section 98.9(c)(2) is amended to reference new subparagraphs (ix) and (x), which provide revised reserve standards for universal life with secondary guarantee policies.

Section 98.9(c)(2)(viii)(b)(2) is amended to change the applicability dates for applying lapse rates from policies issued on or after January 1, 2007 to before January 1, 2014 to policies issued on or after January 1, 2007 to before January 1, 2013.

Section 98.9(c)(2)(viii)(e) is amended to change the applicability dates for applying lapse rates in the calculation of the net single premium from policies issued on or after January 1, 2007 to before January 1, 2014 to policies issued on or after January 1, 2007 to before January 1, 2013.

Section 98.9(c)(2)(viii)(h)(2) is amended to change the applicability dates, when there is a reduction for surrender charges, from policies issued on or after January 1, 2007 to before January 1, 2014 to policies issued on or after January 1, 2007 to before January 1, 2013.

Section 98.9(c)(2)(viii)(j) is amended to change the applicability dates for universal life with secondary guarantee policies when a stand-alone asset adequacy analysis is required.

A new subparagraph (ix) is added to section 98.9(c)(2) to prescribe reserve standards for certain universal life with secondary guarantee policies that were issued on or after July 1, 2005 to before January 1, 2013. This amendment affects universal life with secondary guarantee products, with or without a shadow account, with multiple sets of interest rates or other credits, or multiple sets of cost of insurance, expense, or other charges that may become applicable to the calculation of the secondary guarantee measures in any one year.

A new subdivision (x) is added to section 98.9(c)(2) to prescribe revised reserve standards for universal life with secondary guarantee policies issued on or after January 1, 2013. The steps for calculating the reserve are specified in section 98.9(c)(2)(x)(a) - (i). Section 98.9(c)(2)(x)(j) adds Actuarial Opinion and Insurer Representation requirements to declare that the policies appropriately fit one of the design categories described in this subdivision. Additionally, if reserves are calculated under Method II, a report that describes the analytical review that was performed with respect to premium payment patterns must also be provided.