A consumer watchdog group is expressing alarm at the rising cost of certain insurance products.
In an open letter to state insurance commissioners, Consumer Federation of America (CFA) is asking for an investigation and possible regulatory action at any “unfair price increases” applied to the cost of universal life insurance.
The CFA’s life insurance actuary, James Hunt, called on insurers to justify their proposed increases,
“We request that you review those practices to determine if the insurers are using COI [cost of insurance] increases to maintain profits when the interest rates they have been crediting to cash values have been reduced to the contractually guaranteed rates,” Hunt said in a statement. “CFA believes that you should require universal life insurers to justify COI rate schedule increases by demonstrating that current mortality experience of the affected blocks of business exceeds pricing assumptions when the policies were sold.”
According to the letter, at least three insurers have proposed increases to their rate schedules: AXA Equitable, Voya Financial and Transamerica.