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Life Insurance

The ABCs of CSO & PBR

Two significant regulatory changes are affecting the Life Insurance Industry — Principle-Based Reserving (PBR) and a new standard mortality table, the 2017 Commissioners Standard Ordinary (CSO) Table. These regulations apply to all life insurance carriers.

PBR represents a change in the way carriers calculate reserves needed to pay future claims. Existing reserving formulas are more than 150 years old. Because products have evolved since then, the old one-size-fits-all approach to reserving is moving to a method aligned to the actual risk carriers assume on various products.

The new 2017 CSO table sets the mortality standard for calculating the minimum cash value, statutory reserves and death benefit required for a policy to be considered life insurance. It also specifies the maximum amount that can be charged for cost of insurance.

December 31, 2019: all non-compliant life products must be placed in force with premium. January 1, 2020: all life products sold on or after this date must be compliant with these regulations. Carriers have begun to send updates for their products in response to the upcoming CSO & PBR.

American General

Changes to Policies on 2001 CSO Mortality Tables Endorsements will allow policyholders to maintain ability to make certain changes after January 1, 2020. Read the bulletin.

John Hancock

Important Reminder December 31, 2019 is the mandatory deadline for policy issue of products based on the 2001 CSO Mortality Table. Please review the John Hancock USA and John Hancock NY CSO FAQ’s for key deadlines and impacted products.

Legal & General (Banner / William Penn)

2017 CSO and PBR Updates – See them here.

Lincoln National

This informative presentation covered the transition and year end requirements of products updated due to CSO and PBR changes. Click here for the webinar recording. Click here for the webinar presentation slides. Life and MoneyGuard Product Transition to PBR and 2017 CSO Compliant Products See the Frequently Asked Questions.

Pacific Life

2017 CSO updates for PL Promise products – Read the bulletin.

Protective

Key Protective Life 2017 CSO/PBR Product Updates – See the announcement.

Prudential

Prudential’s Individual Life Insurance Portfolio Is Well Positioned Entering 2020 Prudential continues to focus on offering a broad portfolio of life insurance product solutions that meet various client needs. See Prudential’s Individual Life CSO/PBR Update.

SBLI

2017 CSO Transition Guidelines for SBLI Products. Beginning January 1, 2020, SBLI – like all U.S. life insurers – must issue any new life insurance policy on the 2017 Commissioners Standard Ordinary (CSO) Tables. Read about the impact of this and the transition guidelines.

Securian (Minnesota Life)

What you need to know about the new mortality tables and Principle Based Reserves (PBR) requirements Get the 2017 CSO Updates: Important dates and transition timelines.

buysell

The Buy Sell Agreement

What it is and why your clients need it

A buy-sell agreement ensures stability in business transition and prevents heirs from having to run or sell the business after an owner dies. With a buyer in place, a life insurance policy assures that funds will be available when needed. Heirs get needed cash, and surviving owners are assured that the heirs or a stranger cannot insert themselves into the business.

We’ve been compiling some great materials to assist you with your business cases. Please call our office to discuss your next case and have a look at our new Business Planning Toolkit.

Living Benefits

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Many people simply are not prepared for a chronic, critical, or terminal illness. They think that just because they have a health insurance or disability plan, they’ll be sufficiently covered in case of a sudden or serious health problem, such as a heart attack, stroke, or cancer diagnosis. The fact is that’s probably not true.

  • According to the American Cancer Society, there will be an estimated 1.7 million new cancer cases diagnosed and more than half a million cancer deaths in the U.S. this year.
  • The American Heart Association reports that cardiovascular disease is the leading cause of death globally, accounting for more than 17.3 million deaths per year. By 2030, that number is expected to exceed 23.6 million.
  • The U.S. Department of Health and Human Services says the average cost for long-term care in the U.S. exceeds $6,000 per month for a semi-private room in a nursing home and $3,000 per month for care in an assisted living facility.
  • 91% of older adults have at least one chronic condition and 73% have at least two
  • 73% of respondents to a recent survey say serious health problems are their major worry about living to 100
  • 4 of 5 people live in private homes where about 80% of the care is provided by family and friends
  • $220k out of pocket medical expenses equals the healthcare costs through retirement for an average 65 year old couple retiring now
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Living Benefit Resources

For more information Contact us at (404) 321-1212