State insurance regulators are increasing scrutiny of indexed universal life policies after consumer complaints about misleading illustrations and unrealistic return projections. Several enforcement actions are pending in multiple states.
The products, which tie cash value growth to stock market index performance, have been aggressively marketed as retirement supplements. Critics say the cap rates and participation rates are often poorly explained to buyers.
The National Association of Insurance Commissioners is drafting updated illustration standards aimed at improving transparency for prospective policyholders.
