NAIC seeks shorter annuity illustrations and limits on hypothetical index histories

Insurance regulators are asking for a more concrete answer to a persistent sales-document problem: how to show an annuity's possible behavior without giving hypothetical history the appearance of an investment forecast. A September 15, 2026 NAIC exposure requests proposals for changes to Model 245, with submissions due November 10. The proposals are to reflect preliminary decisions, not a newly effective nationwide rule. The exposure document.

The request favors shorter, standardized illustration tables and fewer repetitive sections. It also calls for an attestation from a company officer and would exclude hypothetical returns for years before an index existed, even where the components of that index existed earlier. Those choices address the presentation and accountability of the sales material as well as the numbers printed inside it.

Applicants are being asked to supply a short explanation and, preferably, an illustration mock-up. That is consequential for carriers and the people explaining their products: a proposed formula would have to be translated into something a customer can actually see and compare. The exposure also asks for additional scenarios or visual information showing how credited interest could behave under different conditions.

The working group's September decision materials describe the underlying concerns. One is that an index designed later can look unusually strong when fitted to earlier history. Another is the mismatch created by applying today's non-guaranteed terms to old periods. The materials distinguish those issues from the separate question of which additional scenarios would show a wider range of possible outcomes.

These are conceptual choices within an ongoing process. The working group's public record traces comment reviews across summer and September meetings and identifies its charge as evaluating improved illustrations and disclosures. The posted exposure is an invitation to develop proposed language and examples; it is not evidence that every state has adopted the resulting requirements.

For readers comparing sales materials, the important development is therefore institutional rather than a recommendation to buy or replace a contract. Regulators are examining whether the way history is displayed can suggest more certainty than it supports. A shorter illustration would still need to distinguish contractual guarantees from assumptions that may change.

The next useful evidence will be the submitted examples, the group's treatment of competing proposals and any subsequent adoption. Those steps will determine whether the concepts become consistent presentation requirements across products and carriers. As of this September 22 review, the published request establishes the direction of the work and the next deadline.