September 10, 1991
TO: CONTRACTUAL PLANS COMMITTEE NO. 12-91
RE: INSTITUTE RESPONDS TO NASAA COMMITTEE PROPOSALS
__________________________________________________________
The Institute submitted the attached comment letter to the
NASAA Investment Company Registration/Trading Practices Committee
in response to certain proposed recommendations as discussed at
the NASAA Committee meeting in Boston earlier this summer. (See
Memoranda to Contractual Plans Committee Nos. 9-91, dated August
16, 1991 and 8-91, dated July 3, 1991.)
The Institute has also been advised that in addition to the
proposals discussed in Boston, the NASAA Committee has also
proposed that the states adopt a policy guideline that requires
contractual plan sponsors to submit annual persistency rates to
each state in which the plan is registered an. Further, failure
to maintain a persistency rate of 80% or higher shall be grounds
for denial, suspension or revocation of the registration in any
particular state.
Inasmuch as the Institute was informally advised of this
persistency proposal, it was determined that an additional
letter, addressing persistency in general rather than the
specific NASAA proposal, be submitted to the NASAA Committee as
soon as possible. A draft of the Institute's letter will be
distributed to you for comment by the end of next week.
We will keep you advised of further developments.
Patricia Louie
Assistant General Counsel
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