ROP Prices Going Up and Guideline CCC

Markingriffin · 10-01-2009, 10:24 AM

I've been trying to read and study about this Actuarial Guideline CCC (officially, Actuarial Guideline 45) that will be in full force by Jan 1st 2010.

I already see a lot of companies either planning to pull their ROP product or raise the price by 30% to 50% on ROP.

I have read that the price increase is going to give a better rate of return to the client and he will be able to get his money back sooner. But of course they have to pay more for all of this extra stuff.

Can any of you tell me what you know about this new rule/guideline and why they are making us do this?

JMO Fan · 10-01-2009, 12:38 PM

Here's the regulator's problem: ABC sells Joe 10-year ROP. If Joe terminates after 9 years, he gets nothing. But the ROP is the result of 10 years accumulation, so why shouldn't Joe get 9 years' worth?

AG45 (CCC) is one interpretation of what's "fair" for Joe before 10 years.

GreenSky · 10-01-2009, 07:08 PM

Assurity has just sent an email that they are continuing their ROP at the same premium but will only apply to the base policy and waiver, not to riders such as CI, etc.

I'm fine with that and glad to see them continuing this benefit.

Rick