Illustration Restrictions Placed On Some John Hancock Inforce Policies

In the past we have written about limitations on obtaining ledgers to manage inforce life insurance.  In one instance the inability to provide in-force ledgers based on “current assumptions” was a precursor to a cost of insurance (COI) increase.

Our servicing team recently received notice that due to a “temporary” situation John Hancock cannot provide inforce ledgers on its Performance UL Policies issued in particular states from 2003 to 2010.

According to the information received from the carrier, they are unable to provide this information because “regulatory standards that govern illustration practices…prevent us from illustrating currently payable amounts based on our current non-guaranteed elements.”

John Hancock is “reviewing the non-guaranteed elements applied to these Policies because emerging experience has differed from the current assumptions which are reflected in the illustrations” and it expects the review to be completed “in the first half of 2017.”

The carrier notes that if the review results in “changes to Non-Guaranteed Elements such changes will not take effect before the policy anniversary immediately after the completion of the review.”

While we do not wish to speculate on the future actions of a highly rated and respected carrier, we will be closely monitoring the situation.

2 thoughts on “Illustration Restrictions Placed On Some John Hancock Inforce Policies

  1. Scott: I hate it when I see mistakes myself, so nobody was more frustrated about it than I was. I got this info today and put up quickly – too quickly as it turned out. After posting I realized the headline mistake and corrected it within 5 minutes, so you must have been one of the first to read it. If you read back through the ITM TwentyFirst blogs you will see that we actually saw the COI increases coming back in 2013, well before anyone else was even mentioning it. We try to keep ahead of the curve and our internal policy remediation and servicing teams have provided insightful analysis that I hope is helpful to those attempting to manage life insurance policies in trying times. So, please do not be “leary” of the content simply because my fingers stumbled over the keyboard today. Thanks, MB

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