Variable Material Generally and in NV
Earlier this month, the Nevada Division of Insurance issued a Bulletin on variable material. This has already gotten much attention in the various e-mail lists, but I think it is important to look at it in the context of other states as well. This Bulletin begins with a statement that it reflects the long-standing position of the Division with the exception of a few areas in which the Bulletin loosens their requirements.
This is an area that has concerned me for quite a while because I think many companies interpret the liberties granted by bracketing much more liberally than do most insurance departments. NY, NJ and a few others have long stood out as being more challenging with respect to variability, but in my opinion, most state examiners would not concede the approval authority that the use of variability by companies often results in. While these few states may stand out for requiring actual approval of the variable material, I do not think their standards are significantly different than what most other states would articulate, if asked. In my opinion companies who interpret bracketing to provide wide latitude for changes may very well be doing so at their peril.
