AG 49 and AG 49-A, dated and explained

Why the rule exists

Illustrations follow a 1995 NAIC model regulation that predates indexed crediting. The guideline's own background says that, without uniform guidance, two illustrations using the same index and crediting method often showed different credited rates.¹ An executive at one insurer told InsuranceNewsNet that illustrated rates of 10, 12 and 14 percent appeared at times, with no real way to tell how carriers reached them.⁴ After AG 49 took hold, InvestmentNews reported Wink data showing the average illustrated IUL rate fell from 7.46% in March 2015 to 6.33% two years later.⁵

IUL is life insurance first, not an investment, and an illustration is a sales projection, not a guarantee. AG 49-A decides how optimistic it may be. It cannot make it accurate.

The timeline

NAIC AG 49-A text as adopted December 11, 2025, NAIC topic page last updated January 8, 2026, and Lincoln Financial's regulatory roundup, all opened November 10, 2026.

How the maximum illustrated rate is set

Every policy gets one benchmark account. It is a one-year S&P 500 point-to-point account with an annual cap, a 0% floor and 100% participation. The insurer applies its current benchmark cap to every 25-year period starting 66 years back, and averages the results. The illustrated rate for the benchmark cannot exceed that average or 145% of the insurer's net investment earnings rate, whichever is lower. Other accounts cannot exceed the benchmark rate plus any extra hedge budget they pay for.¹ Insurers get up to three months at the start of each year to update.

Bonuses and multipliers after May 1, 2023

A regulator directive quoted by InsuranceNewsNet said designs with multipliers should not illustrate better than designs without them. The 2023 change put that into the formula. For policies sold on or after May 1, 2023, an account's illustrated rate also cannot exceed the benchmark rate scaled by the ratio of the two accounts' hedge budgets.¹ InsuranceNewsNet's example was a 6% maximum plus a 1% bonus, which used to show as 7%. Now the base must drop to 5% to show 6% in total.⁴ Multiplier riders are still sold, such as Pacific Life's performance factor rider. Their charges are real even when the illustration cannot show extra upside.

The loan leverage limit

If an illustration shows a loan, the rate credited on the borrowed value cannot be more than 0.50% above the loan's interest rate. The guideline's own example is a 4.00% loan rate and a 4.50% credited limit.¹ On the alternate scale, the credited rate cannot exceed the loan rate at all. Loans can still lapse a policy in real life, and a lapse with a loan can leave a tax bill. The limit only stops the illustration from leaning on a wide positive spread. Our illustration reader checks it line by line.

What changed on April 1, 2026

• History tables shrink. Each account shows annualized index changes and hypothetical credits for the most recent 25 years only. An index with less than 10 years of real history gets no table. Between 10 and 25 years, the table stops at the real history.¹
• No other history. No other historical averages, and no side-by-side of history against the maximum illustrated rate, in the basic or supplemental illustration.
• A required sentence. Historical index changes shown in the illustration are not indicative of future returns.
• The alternate scale stays. It is still shown beside the main ledger with equal prominence.

Lincoln wrote that the revisions apply to all IUL policies sold on or after April 1, 2026.³ The young volatility-controlled indexes described on our indexes page are the ones most affected, because their backtested years no longer appear.

What AG 49-A does not do

Policies sold before December 14, 2020 sit under older rules. An in-force projection on one of those may follow the version in effect at sale. Ask for one under current assumptions on our in-force illustration page.

Questions people ask