Our life insurance contracts expressly provide that the policies are intended to qualify as life insurance under the Internal Revenue Code (IRC), and prohibit the payment of premiums that would cause the policy to no longer qualify. We regularly monitor policies subject to a Cash Value Accumulation Test election (CVAT) to ensure that credited interest and/or new premium do not cause a disqualification as life insurance under the IRC.
We are implementing premium limits for premium on CVAT policies. These protocols are consistent with our contractual rights and responsibilities, while ensuring that we are also adhering to compliance guidelines for CVAT. These protocols will ensure that increases in the death benefit resulting from additional premium are underwritten where appropriate.