The NAIC Life Actuarial Task Force is reopening work on Actuarial Guideline 49-A, a rule set that governs how life insurers present policy illustrations tied to indexed products. Regulators want tighter guardrails and more uniform disclosure after months of uneven practices across carriers.
At the NAIC summer meeting, the task force voted to re-expose proposed changes to Section 7 of the guideline for another 30-day public comment period.
That section controls how insurers show historical index performance, calculate geometric averages, and explain the data behind illustrated results.
Regulators began circling the issue earlier this year after informal, multi-state discussions raised doubts about the credibility of historical returns appearing in some illustrations.
According to Ben Slutsker, director of life actuarial valuation at the Minnesota Department of Commerce, regulators did not identify outright misconduct. The concern sat elsewhere. Inconsistent disclosures. Consumer confusion. Too much room for interpretation.
One proposed revision would cap the historical lookback window at 25 years for index account illustrations.
The change targets a common practice where insurers displayed several historical averages, many built through backcasting, alongside tables showing maximum illustrated rates.
Those historical averages often landed two to four times higher than the maximum rates insurers were allowed to illustrate going forward. Side by side, the contrast could feel optimistic. Maybe misleading. Depends who you ask.
Some carriers pushed back. They argued the guideline never explicitly barred the use of multiple historical averages and said the data helped consumers see how indexes behaved across different market periods. The rules, they said, left space. They filled it.
To cut down on shaky comparisons, the revised guideline would also prohibit index tables for products with fewer than five years of historical data.
The American Academy of Actuaries supports that floor, warning that hypothetical returns built on thin datasets can distort expectations fast.
Not everyone agrees the bar sits high enough. Mike Yanacheak of the Iowa Insurance Division said five years of performance barely scratches the surface. In many cases, he said, it doesn’t even capture a full economic cycle. For most indices, five years tells you very little.
Other regulators echoed the concern. Several pushed for a 10-year minimum, arguing longer histories give policyholders a clearer sense of how indexed strategies behave over time.
According to Beinsure analysts, where that threshold lands will shape how aggressively insurers can frame upside in future illustrations. The debate isn’t abstract. It shows up in sales conversations every day.
