Principal - Important Update: New Business in California
12-16-2021
Update regarding IRC Sec. 7702 and nonforfeiture product changes
Previously, Principal communicated a change to Internal Revenue Code (IRC) Section 7702 that impacts all life insurance policies issued Jan. 1, 2021 and later.
For consistency with the IRC Section 7702 updates, the maximum interest rate applicable under the Standard Nonforfeiture Law was adjusted, with changes required no later than Jan. 1, 2022. Any impacted product policy form must be filed and approved in each state. In those states where Principal's nonforfeiture filing isn’t approved as of Dec. 31, 2021, the applicable product won’t be available for sale after that date and until the compliant version is approved.
As of Dec. 15, 2021, applicable products and states that haven’t been approved include:
- Principal Universal Life Provider Edge IISM (CA)
- Principal Universal Life Flex IIISM (CA)
- Principal Indexed Universal Life Accumulation IISM (CA)
- Principal Indexed Universal Life Flex IISM (no states approved)
- Principal Variable Universal Life Income IVSM (CA)
- Principal Executive Variable Universal Life IIISM (CA)
Principal will accept applications for the affected products received in the Home Office by Dec. 31, 2021. Applications pending as of Dec. 31 will be issued as the applied for product, and the policy date must be no later than Dec. 28, 2021. Principal will communicate as approved versions of these products are available.
Please give BUA a call today at 1-800-792-6795 for assistance with applications or illustrations.