Michigan Laws 500.2236a – Interest indexed universal life insurance; information to be maintained on file
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All of the following information shall be maintained on file by the insurer for all interest indexed universal life insurance policies:
(a) A description of how the interest credits are determined, including all of the following:
Terms Used In Michigan Laws 500.2236a
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Insurer: means an individual, corporation, association, partnership, reciprocal exchange, inter-insurer, Lloyds organization, fraternal benefit society, or other legal entity, engaged or attempting to engage in the business of making insurance or surety contracts. See Michigan Laws 500.106
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Rate: means the cost of insurance per payroll before adjustment for an individual insured's size, exposure, or loss experience. See Michigan Laws 500.2402
(i) A description of the index.
(ii) The relationship between the value of the index and the actual interest rate to be credited.
(iii) The frequency and timing that determines the interest rate.
(iv) If more than 1 rate of interest applies to different portions of the policy value, the allocation of interest credits.
(b) The insurer’s investment policy, which shall include a description of all of the following:
(i) How the insurer addresses the reinvestment risks.
(ii) How the insurer plans to address the risk of capital loss on cash outflows.
(iii) How the insurer plans to address the risk that appropriate investments may not be available or not available in sufficient quantities.
(iv) How the insurer plans to address the risk that the indexed interest rate may fall below the minimum contractual interest rate guaranteed in the policy.
(v) The amount and type of assets currently held for interest indexed policies.
(vi) The amount and type of assets expected to be acquired in the future.
(c) If a policy is linked to an index for a specified period less than the maturity date of the policy, a description of the method to be used to determine interest credits upon the expiration of the period.
(d) A description of any interest guarantee in addition to or in lieu of the index.
(e) A description of any maximum premium limitations and the conditions under which they apply.