AIG CSO & PBR Updates

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AIG CSO & PBR Updates

 2017 CSO Transition: Update and Guidelines 

The National Association of Insurance Commissioners (NAIC) has adopted the 2017 Commissioners’ Standard Ordinary (2017 CSO) Mortality Tables. As of January 1, 2020, all life insurance policies are required to use the updated 2017 CSO Mortality Tables. 

American General Life Insurance Company (AGL) and The United States Life Insurance Company in the City of New York (USL) are well into the process of updating the mortality tables used in connection with the life insurance policies sold by the Company. AGL and USL plan to have all life insurance products transitioned to the 2017 CSO by November 1, 2019. 

At the end of the year, some conditions will apply to the issuance of policies for products based on the previous mortality tables (2001 CSO). While this should only be a small fraction of pending cases at the end of the year, we want to make you aware of these conditions to help you prepare for this change. 

To issue a 2001 CSO-compliant product (Term, Whole Life, Universal Life, Index Universal Life, or Variable Universal Life) still offered when applied for and pending sale as of 12/31/2019, the following conditions must be met: 

Transition Rules 

•Applications for 2001 CSO products must be received at the AIG Home Office by 11/1/2019 or the date noted in the individual product transition rules (whichever is earlier). •The issue date (defined as the date when the policy is inforce) on 2001 CSO products must be no later than 12/31/2019. 

•2001 CSO policies may be backdated within the first 31 days of 2020 with an issue date of 12/31/2019 or earlier. Note: Additional premiums will be required to pay the policy current when policy is backdated. 

•Funding for 1035 exchanges must be received from the transferring carrier no later than our year-end cutoff date for all 1035 exchange funding, which is generally 5 business days before the calendar year-end date of 12/31/2019. If funds from the transferring carrier are received after the cutoff date, a 2017 CSO-compliant product will be offered. 

•Applications for 2001 CSO policies that are pending issuance after 11/1/2019 will require a signed Disclosure and Acknowledgment form that the client is aware of these conditions (11/1 date subject to change). 

•Effective 11/1/2019, only 2017 CSO product applications will be accepted. 

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