Modern times inspire modern wisdom. Bob Dylan might sing “Everything is broken” but two things clearly not broken are the National Association of Insurance Commissioners’ (NAIC) Life Insurance Disclosure Model Regulation (2018) and the Life Insurance Illustration Model Regulation (2001). The proof is everywhere to be appreciated.
Life insurance policy sales in the U.S soared 11% in the first quarter of 2021 compared to 2020, the highest quarterly growth in nearly 40 years. New premium growth rose 15% from a year ago. Whole life and term life policies were 88% of the policies sold. Sales of universal life policies rose 6% while variable universal life policies jumped 31%.
Life insurers know consumers are intelligent, discerning and not afraid to ask questions about life insurance products. They also have access to information from multiple sources, including the policy disclosures and illustrations required by the NAIC models uniformly adopted by state regulators across the nation. The NAIC also offers valuable resources designed for consumers, including the recently updated NAIC Life Insurance Buyers Guide. In addition, ACLI publishes life insurance product information for consumers. Online access to this information about life insurance products is extensive, including the informative links used throughout this article.
Individual life insurance protection in the United States totaled $12.4 trillion at the end of 2019 and has grown at an average annual rate of 1.8% since 2009. More than 10 million individual policies were purchased in 2019. Since the two NAIC models were adopted, millions of life insurance policies providing owners and beneficiaries many billions of dollars of protection have been sold. By any objective measure, these facts tell a success story for family financial protection. It would be counterproductive to undermine the NAIC’s success with unnecessary changes to its nationally respected and effective model guidance.
Good advice for our complicated world is “if it ain’t broke don’t fix it,” and it would be wise to apply it now on behalf of consumers nationwide.
Michael Lovendusky was Vice President & Senior Associate General Counsel at the American Council of Life Insurers (ACLI). He represented ACLI on life insurance illustration and consumer disclosure issues before the National Association of Insurance Commissioners.
