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Overview of Nonguaranteed Elements (NGEs)

Authors

David Cook, FSA, MAAA

Kristen Koon, FSA, MAAA

Zohair Motiwalla, FSA, MAAA

Karen Rudolph, FSA, MAAA

Description

Non-guaranteed elements are parameters of life insurance and annuity polices that are not fixed when the policy is issued but may be changed from time to time by the insurance company. They emerged in the United States and other countries as features of Universal Life and similar products designed to make insurance more competitive in an environment where fully guaranteed products did not have sufficient flexibility to respond to rapidly changing conditions. This overview covers professional guidance, regulations and practical issues with reviewing and revising non-guaranteed parameters.

Report

Overview of Nonguaranteed Elements (NGEs)

Acknowledgments

The authors would like to thank the Society of Actuaries Project Oversight Group (POG), which supported this work with its time and expertise.

Project Oversight Group members:

Dana Lipperman, FSA, MAAA

Maambo Mujala, FSA, MAAA

Ben Slutsker, FSA, MAAA

At the Society of Actuaries Research Institute:

Doug Chandler, FSA, FCIA, Canadian retirement research actuary

Dale Hall, FSA, CERA, CFA, MAAA, SOA managing director of research

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