AG38 and UL with Secondary Guarantees

[Hairy Bactuary]

There are subtle differences in the computations depending on contract issue year. The basic computations are the same.

I call the method allowed for policies issued before 7/1/2005 the Prior 8A method. I call the method allowed for policies issued 1/1/2007 through 12/31/2010 the Current 8C method. I call the method allowed for policies issued 7/1/2005 through 12/31/2006 and policies issued after 1/1/2011 the Interim & Sunset 8B method.

Compare Prior to Current
Prior does not call for segmentation
Prior allows no lapses in determining specified premiums
Prior has no premium allowance
Prior does not multiply surrender charges by net level premium ratio

Compare Interim & Sunset to Current
Interim & Sunset allows no lapses in determining specified premiums
Interim & Sunset does not reduce actual reserve by surrender charges if the guarantee is already fully funded

If I'm missing anything, feel free to correct me or mock me mercilessly.

[Economic]

I thought the Interim & Sunset allowed for lapses...

[Hairy Bactuary]

These can be a little confusing. The table of lapses appears in section 8C of the reading; that's how I remember that only the Current method looks at the lapses.