The NAIC Life Insurance Illustration Model Regulation is a standardized framework developed by the National Association of Insurance Commissioners to govern how life insurance illustrations are designed, presented, and used in sales. It applies primarily to certain forms of permanent life insurance, such as whole life and universal life, and sets rules for how non-guaranteed elements like interest credits and dividends may be projected. The regulation requires clear disclosure of guaranteed and non-guaranteed values, consistent use of assumptions, and inclusion of narrative explanations that help consumers understand policy mechanics. It also mandates that insurers adopt illustration actuaries, internal controls, and annual certifications to ensure illustration practices remain compliant. By standardizing illustration practices, the model regulation aims to reduce misleading projections and improve transparency in life insurance sales.

In day-to-day practice, the NAIC Life Insurance Illustration Model Regulation shapes the format and content of illustrations that agents use with clients. Producers see its influence in the side-by-side columns of guaranteed and non-guaranteed values, detailed footnotes, and required narrative pages that accompany illustration ledgers. Compliance departments review illustrations to confirm that they align with the model regulation and with any state-specific variations. Advisors must refrain from altering carrier-provided illustrations or presenting non-compliant custom spreadsheets as substitutes. When clients ask why projections change over time, producers can reference the model regulation's emphasis on non-guaranteed elements and the need for ongoing review. Understanding the NAIC Life Insurance Illustration Model Regulation helps advisors communicate realistically about policy performance and manage expectations over the long term.