Product Specification#

Status: Draft, 2026-08-03 (all cited sources accessed 2026-08-03).

Scope note: this is a standardized composite specification assembled for reference liability-modeling purposes. It does not describe any single insurer’s product. Facts carrying a source tag ([S#] = product source, [R#] = regulatory/actuarial source, both per _research/guaranteed-ul.md; [REG-R#] = cross-product reference library references/regulatory-and-actuarial-references.md, research provenance in _research/regulatory-actuarial.md, same R-numbering) were extracted from retrieved documents. Items marked std are standardizations introduced for the reference implementation; each std table row carries a footnote with the rationale and the observed range across insurers. Items marked unverified were recorded in the research notes without a verifiable retrieved source and remain flagged.

Product overview and market role#

Guaranteed universal life (GUL, also “no-lapse guarantee UL” or ULSG) is flexible-premium universal life whose distinguishing feature is a secondary guarantee: a conditional guarantee that the policy remains in force even if its fund (account) value is exhausted R2 VM-01 definition; S2, S4, S9. The owner elects a guarantee horizon — commonly anywhere from attained age 90 up to lifetime/age 121 — and funds it with a solved level “no-lapse premium”; higher premiums buy longer guarantees or shorter payment periods S1], [S2], [S9. Carriers state plainly that a policy sustained solely by the no-lapse guarantee builds no cash value S2 and that “cash value accumulation is unlikely” S7: the product is bought as guaranteed permanent death benefit protection, not accumulation.

Two secondary-guarantee families exist in the market and are the only two recognized by regulation: shadow-account designs (a notional parallel account with its own loads, charges and credited rates; the policy cannot lapse while the shadow value, net of indebtedness, is positive) and cumulative-premium-test designs (in force while premiums paid, less withdrawals/indebtedness, meet a required accumulated-premium schedule) R1 AG 38 8E Designs #1/#2; R2; S4. Flagship lifetime-GUL products use shadow accounts S2], [S4], [S9; cumulative premium tests persist as short initial guarantees layered underneath S4 and as the whole design for limited-duration guarantees S5. The target market is risk-averse buyers of permanent protection — estate/legacy planning at ages 45–70 and income replacement at 30–50 S4.

The economics are lapse-supported: funded lifetime guarantees exhibit very low lapse (lifetime-SG lapse rates run 45% below non-lifetime-SG rates on both count and amount bases in 2015–2021 industry experience R7), and insurers rate lapse and tail investment returns as the most critical ULSG assumptions R8. This specification adopts the shadow-account design as representative (AG 38 8E Policy Design #1, matching the VM-20 ULSG machinery directly R1], [R2) and documents the cumulative-premium design as the principal variation.

Representative specification#

Product identity and issue rules#

Parameter	Representative value	Basis
Product type	Flexible-premium UL with secondary guarantee (single shadow account)	S2, S4; R1 8E Design #1; R2
Death benefit option	Level only (Option 1): DB = greater of face amount and minimum corridor death benefit	S2, S4
Face increases	Not permitted (new policy required)	S2
Face decreases	Once per year after policy year 1, minimum decrease $1,000, not below product minimum face	S2
Issue ages	18–80	S6; S4 (18–80 for four of six classes; S4’s Standard classes extend to 85)
Age basis	Age nearest birthday (ANB)	S2, S4, S6
Underwriting classes	4 non-tobacco (Preferred Plus, Preferred, Standard Plus, Standard), 2 tobacco (Preferred, Standard)	S4
Minimum face amount	$100,000	S4, S6
Maximum face amount	None	S3
Face bands (per-unit rates/charges)	Band A $100,000–$249,999; B $250,000–$499,999; C $500,000–$999,999; D $1,000,000+	S2, S7; std (note 1)
Premium modes	Annual, semi-annual, quarterly; monthly by EFT only; non-annual modes carry modal factors	S2
Maturity	No maturity date; premiums and all charges cease at attained age 121, coverage continues	S7

std notes:

Band structure: Pacific Life and Protective use five bands with identical breakpoints from $25K/$50K up (S2, S7). Because the representative minimum face is $100,000 S4], [S6, the sub-$100K band is dropped and the remaining four sourced breakpoints are kept. Observed minimum faces range $25,000 S2 to $100,000 S4], [S6.

Secondary guarantee#

Parameter	Representative value	Basis
Guarantee mechanism	Single shadow account (notional “guarantee value”) with its own premium load, charges and credited rate	S2, S4, S9; R1 8E #1; R2
In-force test	Policy cannot lapse while shadow account value minus policy indebtedness > 0	S4 (indebtedness deduction); S2, S9
Guarantee duration election	Owner elects any attained age from 90 to 121 (lifetime) at issue	S1, S2, S9
Funding	Level “no-lapse guarantee premium” solved at issue so the shadow account stays positive to the elected guarantee age	S1, S2; solve mechanics std (note 1)
Guarantee scope	Death benefit only; the guarantee provides no cash or surrender value	S2, S3
Premium timing tolerance	Premiums up to one month early or one month late do not impair the guarantee	S9
Catch-up	Unlimited right to restore a lapsed guarantee by paying the accumulated shortfall (shadow-account deficit grossed up for the shadow premium load)	S2, S7 (restoration permitted, cost may exceed illustrated premiums); R1 example 7 (unlimited catch-up = unexpired SG); formula std (note 2)
Effect of withdrawals	Withdrawals reduce the shadow account dollar-for-dollar	S4 (partial surrenders subtract from guarantee measure); exact treatment std (note 3)
Effect of loans	Indebtedness is deducted from the shadow account in the in-force test (guarantee value itself not reduced)	S4, S2

std notes:

Carriers publish only that a level guaranteed premium exists for the elected duration S1], [S2], [S7; no public document discloses the solve. The reference implementation solves by bisection/secant on a level premium (technical notes, “Funding-premium solve”). Observed market framing ranges from continuous duration election S1], [S2], [S9 to a discrete menu (age 90/95/100/105/110/121) S8.
No retrieved contract text discloses a catch-up formula (specimen policy forms were not retrievable — research Gaps). The std formula (shortfall = negative net shadow balance, i.e. shadow value less indebtedness, grossed up for the shadow premium load) is the minimal design consistent with AG 38’s treatment of unlimited catch-up rights R1 and with carrier statements that restoration premiums “may be significantly higher than the premiums illustrated” S7.
Observed range: withdrawals reduce the guarantee measure (Nationwide subtracts partial surrenders and fees S4; Pacific Life/Protective state loans and withdrawals impair the guarantee value or duration S2], [S3], [S7); Penn Mutual’s premium-test design subtracts withdrawals from premiums paid S5. Dollar-for-dollar reduction of the shadow account is the simplest representative treatment.

Base (real) account parameters#

Parameter	Representative value	Basis
Premium expense charge (load)	25% of every premium, all years	S3, S7
Monthly per-policy charge	$5.50 per month, ceasing at attained age 121	S3, S7
Monthly per-unit expense charge	$0.20 per $1,000 of initial face amount per month, all years to age 121	std (note 1)
Guaranteed maximum COI rates	2017 CSO, sex-distinct, smoker-distinct, ANB, converted to monthly rates	std (note 2); R3 (maxima must be stated in policy); REG-R17
Current COI rates	65% of guaranteed maximum, all durations	std (note 3)
Guaranteed minimum credited rate	2.0% annual effective	S3, S5, S7
Current credited rate	3.5% annual effective (declared; snapshot)	std (note 4)
Charge cessation	All charges cease at attained age 121	S3, S7

std notes:

Per-unit charge structure (monthly, per $1,000 of initial face, varying by age/sex/class) is sourced S3], [S7; no carrier publishes the scale. $0.20/month is a single representative level chosen so total non-COI charges are material but secondary to COI; the observed range is undisclosed (only the structure is public).
Model 585 requires guaranteed maximum mortality charges to be stated in the policy R3; carriers do not publish their COI tables (research Gaps). Using the statutory valuation table (2017 CSO REG-R17) as the contractual maximum is the standardization; it makes the guaranteed basis reproducible from public tables.
Current COI scales are not published by any carrier (research Gaps). A flat 65% of the CSO maximum is a standardization chosen to give realistic positive spread between guaranteed and current bases; no observed range is available.
Current credited rates are discretionary and reset periodically S3], [S5; levels are not published in the retrieved documents. 3.5% is a snapshot standardization 150 bps above the sourced 2.0% guaranteed floor S3], [S5], [S7.

Shadow account parameters (all standardized)#

Public documents do not disclose shadow-account parameters for any carrier; only the charge/credit categories are described S4], [S9 and AG 38 8E caps guaranteed shadow-account interest credits at a Moody’s-composite-yield-based index + 3% for reserve classification R1. The reference implementation therefore uses the following std parametrization, calibrated so that the solved level no-lapse premium is in the range of observed market premiums for lifetime-guarantee GUL (see technical notes, “Calibration”).

Parameter	Representative value	Basis
Shadow premium load	8% of every premium, all years	std (note 1)
Shadow credited rate (guaranteed)	5.5% annual effective, all years	std (note 2)
Shadow COI rates	55% of 2017 CSO guaranteed maximum (same table basis as base account)	std (note 3)
Shadow per-unit charge	$0.05 per $1,000 of initial face per month	std (note 4)
Shadow per-policy charge	None	std (note 5)
Shadow charge cessation	Age 121 (same as base)	std (note 5)

std notes:

No shadow load is published anywhere (research Gaps). 8% sits near the 7% “average premium load level” AG 38 8B uses as its market-wide load allowance R1, and well below the 25% base-account load S3], [S7 — the shadow account must credit premiums more generously than the base account for the guarantee to outlast the cash value.
Guaranteed shadow credits are contractual internal parameters, distinct from the base credited rate R2 shadow-account definition; S4 mechanics; AG 38 8E caps them at Moody’s composite corporate yield + 3% for Design #1 classification R1. 5.5% is a standardization comfortably below plausible values of that cap and above the 2.0% base guarantee S3], [S5], [S7, producing the long-lived guarantee value the design requires.
Not disclosed publicly. 55% of the CSO maximum keeps shadow COI below current base COI (65% std) so the shadow account depletes more slowly than the base account — the defining behavior of the product S2], [S7.
Not disclosed publicly; a nominal per-unit charge is retained so the shadow account is not charge-free (AG 38 8E describes shadow accounts with expense charges R1).
Not disclosed publicly; omitting a per-policy shadow charge is the simplest representative choice.

Surrender values, return of premium, loans, withdrawals, grace#

Parameter	Representative value	Basis
Surrender charge period	15 years, declining linearly to zero	std (note 1)
Surrender charge amount	SC(t) = $18 per $1,000 of face × max(0, (180 − t)/180), t = policy month	std (note 1)
Return of premium (ROP) endorsement	Exercise during the 60 days following policy anniversaries 20 (refund 50% of premiums paid) and 25 (100% of premiums paid); refund capped at 40% of face amount; full surrender required	S1 (percentages, anniversaries, 40%-of-face cap); S3, S4 (60-day window mechanics)
Withdrawals (partial surrenders)	Available after policy year 1; $25 fee per withdrawal; minimum $500; maximum = net surrender value less the greater of $500 or three months of deductions; may reduce face amount and impairs the guarantee	S2, S3, S4, S7 (availability/fee); S4 (min/max)
Policy loans	Available after policy year 1; loan interest 5.0% annual charged in arrears; loaned account value credited 3.0%, both guaranteed	S4
Maximum loan	Net surrender value less three months of deductions	S4
Grace period	61 days from the monthiversary on which net cash value cannot cover the monthly deduction and the guarantee is not in effect; written notice required	S7; R3 (minimum 30 days + notice)
Reinstatement	Within 3 years of lapse, with evidence of insurability and payment of required premiums; guarantee restored only via catch-up payment	std (note 2)
Contestability / suicide	Two years	S3
Misstatement of age/sex	Benefit adjusted using the most recent mortality charge basis	S3; R3

std notes:

Observed surrender-charge periods span the full range: none S7, 9 years S3, 19 years (also applied to face decreases and withdrawals) S2, 20 years S4. A 15-year linearly declining schedule is chosen as a mid-range representative; the $18/$1,000 initial level is a standardization (carriers do not publish scales, which vary by age/sex/class S3).
Reinstatement terms were not captured in any retrieved document (specimen policy forms unavailable — research Gaps). A 3-year reinstatement right with evidence and back-payment is standard UL policy language; treat the details as std.

Contractual mechanics#

Notation here matches the technical notes; both documents use the same representative parameter values.

Premium provisions#

Premiums are flexible in amount and timing after the first premium S2], [S4. The policy is illustrated and sold with a level no-lapse guarantee premium P* solved for the elected guarantee age; paying more than P* shortens the payment period or extends/pre-funds the guarantee, and single-pay/1035 funding is an explicit design “sweet spot” S1], [S2. Each premium is subject to the premium expense charge: net premium to the account value is (1 − 0.25) × P S3], [S7, and net premium to the shadow account is (1 − 0.08) × P std. Premiums paid within one month of the scheduled date do not impair the guarantee S9. Premium payments are permitted to attained age 121, when charges cease S7; cf. premiums-to-120 with maturity extension in one observed design S4.

Death benefit provisions#

Level option only: DB_t = max(F, κ(x_t) × AV_t) where F is face amount and κ(x_t) is the applicable corridor factor at attained age x_t required for the guideline premium test S2, S4 level-only design; R4 corridor requirement. Because GUL account values are deliberately thin, DB_t = F in almost all months. The death proceeds equal DB_t less outstanding indebtedness and any due and unpaid charges std (standard UL practice; the retrieved documents state indebtedness/unpaid- charge offsets expressly only for the ROP refund S4, not for death proceeds).

Account value mechanics (base account)#

On each monthiversary, in order: (1) net premium credited; (2) per-policy and per-unit expense charges deducted; (3) cost of insurance deducted, computed on the net amount at risk NAAR_t = max(DB_t/(1+j) − max(AV_t', 0), 0) where j is the monthly equivalent of the 2.0% guaranteed rate and AV_t' is the account value after steps (1)–(2), floored at zero so an exhausted account never inflates the NAAR; (4) interest credited at the declared rate (guaranteed floor 2.0% S3], [S5], [S7), with the loaned portion credited at the guaranteed loaned rate 3.0% S4. The full recursion, including the flooring of AV at zero while the guarantee is active, is specified in the technical notes. Structure of the charge deductions follows the sourced charge lists S2], [S3], [S4], [S7; the processing-order details are std.

Shadow account mechanics#

The shadow account SG_t is a notional account that “typically consist[s] of premium and interest credits and cost of insurance and expense charges” R2 and exists only to run the in-force test — it is never payable S2], [S3. It follows the same monthly recursion as the base account but with the shadow parameter set (std table above) and is not floored at zero: a negative balance measures the catch-up shortfall. The policy cannot lapse while SG_t − L_t > 0, where L_t is the loan balance S4; S2, S9.

Charges and credits#

All charge categories are sourced: premium expense charge, monthly COI, monthly administrative (per-policy) charge, monthly expense (per-unit) charge, rider charges S2], [S3], [S4], [S7], [S9. Guaranteed maxima for charges and guaranteed minimum interest must be stated in the policy, and interest credits may not remain conditional longer than 24 months R3. Current (non-guaranteed) COI and credited scales are declared at insurer discretion subject to the guaranteed bounds; determination of such nonguaranteed elements is governed by ASOP No. 2 REG-R26.

Loans#

After year 1, the owner may borrow up to the net surrender value less three months of deductions S4. Loan interest of 5.0% accrues in arrears; the loaned portion of the account value is credited at a guaranteed 3.0% (200 bps guaranteed spread) S4. Indebtedness is deducted from the guarantee in-force test (subtracted from the shadow account) S4; its deduction from death proceeds and the surrender value is standard UL treatment std. Observed variation: 300 bps spread (5%/2%) S7; adjustable declared loan rates S5; and one design in which any loan voids the guarantee outright S5.

Withdrawals#

After year 1; $25 fee each S2], [S3], [S4], [S7; minimum $500, maximum = net surrender value less the greater of $500 or three months of deductions S4. A withdrawal reduces the account value dollar-for-dollar plus fee, may reduce the face amount (never below the product minimum S4), reduces the shadow account dollar-for-dollar std (see note 3 under “Secondary guarantee”), and within the surrender-charge period may trigger a surrender charge in some observed designs S2.

Grace, lapse and reinstatement#

On a monthiversary where net cash value (account value less surrender charge less indebtedness) cannot cover the monthly deduction AND the guarantee is not in effect (SG_t − L_t ≤ 0), the policy enters a 61-day grace period S7. Lapse occurs only if the grace period expires without payment of the required premium. While the guarantee is in effect, exhaustion of the account value does not trigger grace — the account value is floored at zero and coverage continues S2], [S3], [S9. A lapsed policy may be reinstated within 3 years std; the guarantee itself is restored only by paying the catch-up shortfall [S7; R1 example 7; formula std](#uslib-guaranteed_ul-s7).

Renewal / conversion / maturity#

Not a renewable-term structure: coverage is permanent. There is no maturity date; at attained age 121 premiums and charges cease and coverage continues S7 (observed variation: maturity at 120 with a maturity-extension provision S4). No conversion features apply to the base contract.

Riders#

In scope for the reference implementation#

Terminal illness accelerated death benefit. Prepayment of up to 75% of the death benefit, maximum $500,000, on a life expectancy of 12 months or fewer S2], [S9. No premium; benefit modeled as an actuarial discount of the death benefit — the reference model treats acceleration as neutral to gross liability cash flows std (see technical notes).
Return of premium endorsement. Built into the representative contract (see specification table): 50%-of-premium refund at anniversary 20, 100% at anniversary 25, capped at 40% of face S1, 60-day exercise windows S3], [S4. Modeled as an elevated-surrender event with a distinct surrender benefit.

Out of scope (listed for completeness; all observed in retrieved documents)#

Chronic illness accelerated benefit riders (2-of-6 ADL / severe cognitive impairment triggers; per-diem caps) S1], [S2], [S5], [S7], [S9
Long-term care rider (true LTC, including informal care) S4
Longevity/income riders: death benefit converted to income from age 85 S1; guaranteed installment death benefit payout endorsements S4], [S7
Waiver of monthly deductions during disability S2], [S4], [S5 — note the guarantee gap: one observed design waives monthly deductions but not the full no-lapse premium S4
Waiver of specified premium S7; disability completion benefit S5
Children’s term riders with conversion privileges S2], [S5], [S9
Accidental death benefit; additional insured term; guaranteed increase option; overloan protection; business exchange riders S4], [S5], [S6

Variations across insurers#

Guarantee mechanism. Shadow accounts dominate flagship lifetime GUL (“extended no-lapse guaranteed value” S4; “net no-lapse guarantee value” S2], [S9); cumulative-premium tests appear as 5-year initial guarantees layered under the shadow account S4 and as the entire design for limited (≤30-year) guarantees S5. Regulation recognizes exactly these two families and treats multi-charge-set variants punitively R1 Designs #1–#3; R2. Choice: single shadow account — it is the flagship-product design and maps 1:1 onto AG 38 8E Design #1 and the VM-20 ULSG NPR machinery R1], [R2, which the reference library must exercise. The cumulative-premium test is documented as the main variation: in that design the in-force test is cumulative premiums paid − withdrawals − indebtedness ≥ required accumulated premium schedule S4, S5; R1 Design #2, and the technical notes state how to swap it in.
Guarantee duration menu. Continuous election through funding S1], [S2], [S9 vs. discrete menu 90/95/100/105/110/121 S8 vs. dual chassis age-120/age-70 with an upgrade option S4 vs. hard 30-year cap S5. Choice: continuous election age 90–121 (superset of the menus; the solve is identical).
Loans vs. the guarantee. Mainstream: indebtedness deducted from the guarantee value S2], [S4. Harshest: any loan nullifies the guarantee S5. Choice: indebtedness deduction — it is the majority design and keeps loan utilization modelable rather than terminal.
Missed premiums. Some designs shorten the guarantee age gracefully (guarantee to 105 falling to 96 after two skipped premiums S3); shadow-account designs re-derive the horizon endogenously — a shortfall shows up as earlier shadow exhaustion. Choice: endogenous (shadow-account) treatment; the catch-up provision restores the original horizon S7; R1.
Surrender charges. Observed: none S7; 9 years S3; 19 years including withdrawals/face decreases S2; 20 years S4. Choice: 15-year declining std — mid-range, long enough to interact with the ROP windows.
ROP exit windows. Nearly universal but heterogeneous: years 15/20/25 by band S2], [S9; 16/21 S4; 20/25 S1; 21/26 S3; flat 25% any time after year 10 S7. Caps: 40% of face/DB S1], [S2], [S4 vs. 50% of lowest DB S3], [S7. Choice: 20/25 with 40%-of-face cap S1 — the built-in (no-election) variant with the modal cap.
Death benefit options. Guarantee-focused carriers restrict to level-only S2], [S4; accumulation-oriented designs keep level + increasing S5. Choice: level-only, matching the guarantee-focused segment and the task of modeling protection business.
Charge transparency. One carrier publishes its load structure (25% load, $5.50/month) S3], [S7; others disclose categories only S2], [S4. No carrier publishes COI tables or shadow parameters — hence the std parametrization above.

Regulatory context#

NAIC Model 585 (Universal Life Insurance Model Regulation). Provides the UL chassis rules: definitions, CRVM-for-UL valuation via the guaranteed maturity premium/fund with the r-ratio, retrospective minimum nonforfeiture values, mandatory policy provisions (stated guaranteed maxima/minima, ≥30-day grace with notice, annual reports, disclosure that coverage may not continue to maturity even if scheduled premiums are paid), and a drafting note that secondary guarantees “should be taken into consideration” for minimum nonforfeiture benefits. Its low-cash-value clause lets the commissioner require higher cash values where substantially level benefit charges develop little or no cash value — directly relevant to thin-AV GUL designs. R3; REG-R5

**AP&P Appendix A-830 (cited in this library until 2026-08-06 as Model 830, “Regulation XXX”)

Actuarial Guideline 38 (“AXXX”).** For policies issued before PBR (and in-force blocks), the appendix sets minimum reserves for UL with provisions letting a policyholder keep the policy in force over a secondary guarantee period, and AG 38 interprets it for secondary guarantees. Citation correction, from the AP&P print read at first hand on 2026-08-06: the appendix is a flat sequence of paragraphs ¶¶1–32 plus an unnumbered Attachment and has no Sections at all, and the words “Model #830” and “Regulation XXX” appear nowhere in it — the ULSG material is at ¶¶29–32, so the “Model 830 Section 7” citation this specification previously carried does not resolve against this text. (It may still resolve against the separately published model regulation REG-R6; that was not re-read against the appendix print, so no view is taken.) REG-R154

What ¶¶29–32 prescribe: basic reserves for the secondary guarantee are the segmented reserves over the secondary guarantee period, computed with gross premiums set equal to the specified premiums, if any, or otherwise to the minimum premiums, on segments from the ¶5 contract segmentation method — no unitary leg; deficiency reserves run the ¶22 construction on the same substitution; and the minimum reserve during the guarantee period is the greater of that sum and “the minimum reserves required by other appendices governing universal life plans”, a limb the appendix does not name and which must not be resolved to A-585. Where more than one secondary guarantee is unexpired, the reserve is the greatest of the stand-alone reserves of each, every one valued ignoring the others. A scope test this specification did not previously carry: a UL policy is outside the appendix entirely where all three of ¶3.a.ii hold — secondary guarantee period five years or less, specified premium not less than the net level reserve premium for that period, and initial surrender charge not less than 100% of the first-year annualized specified premium. The representative lifetime guarantee is inside the appendix on the first limb alone. A-830’s own basic reserves, deficiency comparator and maximum valuation interest rates are cross-references into A-820 ¶¶11–13, ¶¶19–20 and ¶¶7–10, also now read. REG-R154 ¶¶3.a.ii, 4, 6, 8, 29–32; REG-R153

AG 38 then supplies what A-830 contains nothing of — no shadow account, no funding ratio, no minimum-gross-premium definition, no 8C/8D/8E analogue REG-R154: the reserve interpolates between basic+deficiency reserves and the net single premium for the guarantee via a funding ratio measured on the shadow account or excess cumulative premiums (with a 7% load allowance), less an adjusted surrender-charge offset, under prescribed conservative lapse (2%/1%/0% patterns). Section 8E (issues on/after 1/1/2013) defines minimum gross premiums per policy design — Design #1 is exactly this specification’s shadow account — and caps guaranteed shadow credits at a Moody’s-based index + 3%. R1; REG-R6; REG-R7

NAIC Valuation Manual — VM-01/VM-20 (PBR). VM-01 defines “secondary guarantee” and “shadow account”; ULSG is its own VM-20 reserving category with reserve = NPR floor plus excesses of deterministic and stochastic reserves. The ULSG NPR during the SG period is the greater of an SG-based amount — min(ASG/FFSG, 1) × NSP − amortized expense allowance — and the non-SG amount, with a prescribed dynamic lapse formula driven by the funding ratio. Material-SG business cannot use the life PBR exemption and generally cannot avoid deterministic/stochastic modeling. R2; R9; REG-R3; REG-R23

NAIC Model 787 / AG 48 (reserve financing). ULSG “redundant” reserve financing through captives is constrained: Primary Security must at least equal a VM-20-based Required Level (greater of DR and NPR; greatest of DR/SR/NPR if the stochastic exclusion fails), with reserve credit disallowed on non-compliance. AG 48 applied the framework before state adoption of Model 787. R6; REG-R11; REG-R12

IRC 7702 / 7702A. The contract must qualify as life insurance via CVAT or GPT + corridor; level-DB GUL is typically GPT/corridor-tested [R4 for the tests; design attribution unverified](#uslib-guaranteed_ul-r4). The 2021 change to dynamic “insurance interest rates” (2% transition rate for 2021) materially affects GUL premium/corridor limits R4; REG-R13. Heavy prefunding (single-pay/short-pay, the 1035 “sweet spot” S2) can create a MEC under the 7702A 7-pay test, taxing loans/withdrawals income-first with a 10% additional tax before age 59½; benefit reductions within 7 years force retesting R5; REG-R14; S4. Accelerated benefit riders are designed to qualify under IRC 101(g) S1], [S2.

Illustrations and NGE governance. GUL is general-account (not variable) business: the Illustrations Model Regulation applies (disciplined current scale, self-support and lapse-support certification) REG-R4; REG-R30, and insurer determination of current COI/credited scales is governed by ASOP No. 2 REG-R26. Note that GUL is not SEC-registered; no prospectuses exist on EDGAR (verified empirically in the research notes).