Life Bureau Filing Guidance Note

Guidance Date: 07/17/2019

The following guidance is provided pursuant to Insurance Law §308 and Regulation 74 and supersedes the Department’s 9/9/2009 Guidance Note.

Certifications and notifications pursuant to Regulation 74 at 11 NYCRR § 53-3.7

There are several reasons submissions required by §53-3.7 result in the Department seeking clarifications and corrections. The following guidance sets forth the Department’s expectations with respect to such submissions.

Illustration Actuary(ies)

Section 53-3.7(a) requires the board of directors to appoint one or more illustration actuaries.

Whenever an Illustration Actuary is appointed, the following should be provided:

  1. A copy of the Board Resolution appointing the Illustration Actuary.
  2. Attestation that the Actuary meets the requirements of §53-3.7(c).
  3. The effective date of the appointment.
  4. If the Company has multiple Illustration Actuaries, any notification of appointment must contain the products for which the Actuary will be responsible.
  5. If the insurer changes the Illustration Actuary responsible for all or a portion of the company’s policy forms, the Department should be notified promptly and include the reason for the change (See §53-3.7(h)).

What should be filed when there are no policies for sale or in-force subject to Regulation 74?

If the Company does not have any business subject to the Regulation 74, the Department requests this be confirmed in an annual filing, including the coverage period of such certification.

Should the Company begin selling or acquire products subject to the regulation, the Department requires an annual certification be filed in accordance with the requirements of §53-3.7.

What are the basic requirements for annual certifications?

Sections 53-3.7(b) and (f) require annual certifications for the illustrated scales used. This means the scales in use as of the date of the certification as well as all illustrated scales used since the previous certification. These certifications need not certify to scales that have not been implemented.

Section 53-3.7(g) requires these annual certifications to be provided each year by a date determined by the insurer. Therefore:

  1. Each certification should be signed and dated.
  2. Each certification should include the coverage period for the certification (e.g., January 1, 2017 through December 31, 2017).
  3. Coverage periods should be no greater than 1 year (e.g., a coverage period may not be January 1, 2017 through January 1, 2018).
  4. Coverage periods may not be prospective.
  5. The annual filing should be made within 60 days of the end of the certification period.

The certification coverage period information may be included in the cover letter to the submission or in the general information section of a SERFF submission.

If the month of certification is changed then:

  1. The change in the month of certification must be noted.
  2. The change may not result in more than 12 months between certifications. (For example, if the annual certificate coverage period is 5/1-4/30 and the Company wants to change their coverage period to begin 7/1, then a certification should be filed for the period 5/1-6/30 and then the next filing certification would be 7/1-6/30)

What else must the illustration actuary file with the Department?

Section 53-3.7(d) requires a certification from the Illustration Actuary when a new policy form is to be illustrated. This certification applies to the scales in effect on the filing date. Scales actually used in illustrations after the approval date would be certified in the annual certification for the illustrated scales used.

Section 53-3.7(e) requires prompt notice if the actuary is unable to certify the scale for any policy form illustration the insurer intends to use.

What policy forms should be included in the annual filing list and how should they be listed?

Section 53-3.7(d) requires the Illustration Actuary to file a certification for policy forms for which illustrations are used. Many certifications only contain lists of policy forms that are currently being issued; however, the certification also applies to illustrations for existing policies on forms no longer being issued.

  1. The Department requests the list of policy forms identify all policy forms that the Company is currently selling and has in-force. For each policy form included in the list, the insurer should identify:
    1. whether the form is marketed with or without an illustration,
    2. whether the form is actively marketed or is not actively marketed,
    3. the policy form number of the New York approved form,
    4. the generic name of the form, and
    5. the marketing name of the form.
  2. All rider forms involved in illustrations should be listed separately.
  3. Application forms need not be listed.
  4. An insurer may list policy forms or list the form numbers of insert pages if those pages contain all the information pertaining to the guaranteed and illustrated scales. Each company should use one approach or the other consistently from year to year for a given policy form, and under the latter approach all applicable insert pages (i.e., pages which provide information on a discretionary element or the dividend scale) must be listed.
  5. Any changes to the listing from the previous year’s submission should be identified and include an explanation for the change in status.
  6. Policy forms should only be removed from the listing when there are no longer active policies in force for such form.
  7. Insurers may include a legend where necessary to better identify and distinguish the illustration and marketing status of the policy forms included in the list.

To assist insurers, the Department has created a template in Microsoft Excel that can be utilized to provide the list of policy forms. The template is also available in SERFF.

What are the requirements for the Illustration Actuary’s annual certification?

An Illustration Actuary Certification should include and attest to the following:

  1. An opening paragraph which identifies:
    1. The name of the insurer for which the certification is provided,
    2. The illustration actuary’s relationship to the insurer, and
    3. His or her qualifications to sign the certification pursuant to §53-3.7(c).
    4. If the Illustration Actuary is only certifying to select products or lines of business, this information should be included in the opening paragraph.
  2. That the disciplined current scale used in illustrations is in conformity with the ASOP #24 for Compliance with the NAIC Model Regulation on Life Insurance Illustrations promulgated by the Actuarial Standards Board. (See §53-3.7(b))
  3. That the illustrated scales used in insurer-authorized illustrations meet the requirements of Subpart 53-3. (See §53-3.7(b))
  4. Whether the currently payable scale applicable for business issued within the previous five years and within the scope of the certification has been reduced for reasons other than changes in the experience factors underlying the disciplined current scale. (See §53-3.7(c)(5))
  5. Whether non-guaranteed elements illustrated for new policies are consistent with those illustrated for similar in force policies. (See §53-3.7(c)(5))
  6. Whether non-guaranteed elements illustrated for both new and in force policies are consistent with the non-guaranteed elements actually being paid, charged or credited to the same or similar forms. (See §53-3.7(c)(5))
  7. Disclosure of the method used to allocate overhead expenses for all illustrations. (See §53-3.7(c)(6))
  8. Each Illustration Actuary Certification should be accompanied by a separate Responsible Officer (RO) Certification. The RO Certification should:
    1. Name the Illustration Actuary to which the RO Certification pertains;
    2. Name the Company to which the RO Certification pertains;
    3. Certify to the requirements of §53-3.7(f), including that the company has provided its agents or brokers with information about the expense allocation method used by the company in its illustrations.
    4. Be signed and dated.

Any deviations from the above should be explained by the Illustration Actuary in their certification.

Specific Requirements for Policies Subject to N.Y Insurance Law § 4232(b)

For a policy form subject to §4232(b), including a no lapse guarantee universal life product, insurers must comply with either §§53-2.1 and 2.2 for the preliminary information and policy summary requirements, or Regulation 74 including Subpart 53-3 if the policy is marketed with an illustration.

In either instance, the illustration or preliminary information must include non-guaranteed elements.

If the policy form does not pass the self-support or lapse-support test, it may not be marketed with an illustration; however, the insurer must then provide preliminary information and policy summary information in accordance with 11 NYCRR 53-2.1 and 11 NYCRR 53-2.2 and in-force illustrations per §3211(g).

If the Company changes the illustration status of the policy form from illustrated to non-illustrated, the Company should identify and explain the reasons for the change in the cover letter to the submission or in the general information section of the SERFF submission. The Department requests the Company also certify that such form is compliant with the preliminary information requirements of Insurance Law § 3209 and Regulation 74 at 11 NYCRR 53-2.1.

In-force illustrations

An in-force illustration means an illustration furnished at any time after the policy that it depicts has been in force for one year or more.

Whether or not a policy has been designated to be illustrated, for all policies subject to the requirements of §3211, an annual notification to the policyowner is required that advises of the right to request an updated policy illustration. (See §3211(g))

Section 53-3.6(c) requires that upon the request of the policyowner, the insurer shall furnish an in-force illustration of current and future benefits and values based on the insurer’s present illustrated scale. The in-force illustration must comply with the requirements of §§53-3.2(a), 3.3(a) and 3.3(e) and must be based on the then current non-guaranteed elements.

Variable Life (VL) and Variable Universal Life (VUL) Insurance

If a VL or VUL policy form will be marketed with an illustration intended to comply with Regulation 74 in lieu of complying with the preliminary information and policy summary requirements of Section 3209, all such forms should be included in the annual certification policy form listing.

Additional guidance is set forth in the Department’s published Outline for Variable Life at II.D.9.

How may submissions be made?

The Department accepts paper submissions filed via regular mail and electronic submissions via the State Electronic Rate and Form Filing (SERFF) system.

Every submission (other than an illustration certification required to be included with the submission of policy forms) should clearly identify the contents of the submission as:

  1. the annual Illustration Actuary’s certification
  2. the annual Responsible Officer’s certification
  3. a change of Illustration Actuary notification, and/or
  4. an inability to certify notification.

It is important to use the correct electronic captions when filing via SERFF.

When making a submission through SERFF use:

Type of Insurance (TOI):   Life Insurance & Annuity Products
SubTOI:                              General
Filing type:                         Life Annual Illustration Certification
Filing mode:                       Informational

Submissions via regular mail should be sent to:

Life Bureau - Suite 1910
New York State Department of Financial Services, Insurance Division
One Commerce Plaza
Albany, New York 12257


If you have any questions, please contact Mike Mazzie at (518) 473-7570.