Effective March 1, 2016, new illustration guidelines set forth by the NAIC in Actuarial Guideline 49 will go into effect. The new regulation states that the illustrated rate credited to the variable loan balance cannot exceed the illustrated variable loan interest rate by more than 1%. As an example, in March 2016 the minimum variable loan rate for American National’s Indexed Universal Life products will be 4.55%. Consequently, the maximum illustrated crediting rate on the loan balance will be 5.55%. This will effectively lower the loan distribution amounts from what they are currently illustrating today.
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