Proposed regulatory framework could change the products advisors are selling.
Advisors could find themselves selling a flood of adjustable products in the future thanks to regulator’s proposed standardized life insurance approach.
While the framework is still in the development stages, the proposed system be more attractive for products with adjustable features.
“Companies may trend towards that direction because it would make the products less capital intensive and so the pricing may come down,” said Ritchie Hok, Senior Analyst, Life Capital Division with the Office of the Superintendent of Financial Institutions. “It makes those products more attractive and companies may write more of those products.”
The plan is to implement the framework in 2018 by phasing it in. But there are still numerous steps before that’s done with companies currently working on a quantitative impact study, with one coming in the fall.
In 2016 and 2017 companies will do parallel runs where they use both the current and new framework to get a sense of the impacts. It will also allow companies to build up their systems to be able to handle the new framework in a live environment.
While the framework is still in the development stages, the proposed system be more attractive for products with adjustable features.
“Companies may trend towards that direction because it would make the products less capital intensive and so the pricing may come down,” said Ritchie Hok, Senior Analyst, Life Capital Division with the Office of the Superintendent of Financial Institutions. “It makes those products more attractive and companies may write more of those products.”
The plan is to implement the framework in 2018 by phasing it in. But there are still numerous steps before that’s done with companies currently working on a quantitative impact study, with one coming in the fall.
In 2016 and 2017 companies will do parallel runs where they use both the current and new framework to get a sense of the impacts. It will also allow companies to build up their systems to be able to handle the new framework in a live environment.
