A rule that holds year-to-year GRET movement to about 10% only holds it if everyone agrees which number last year's was. The SOA Research Institute's 2027 Generally Recognized Expense Table letter anchored the merged Other channel to Niche Marketing's $126 acquisition factor, so the 86 companies that were in Other at $175 see a 21% cut to $139 a policy (SOA Research Institute, August 2026).
The letter is dated August 3, 2026, and the Life Actuarial (A) Task Force exposed it on August 12 for a comment period that closed September 10. Adoption for calendar year 2027 illustrations is the task force's next step. The same exposure carries the Institute's August 10 research-update slides, and those show a second, "Updated" recommendation with the cap disregarded: $158 for Other, 10% below the old Other factor and 25% above the old Niche one.
Key Takeaways
- $139, $0.80, 35% and $42: every merged Other factor in the letter is exactly 1.10 times Niche Marketing's 2026 value, rounded, which is what the letter means by "factors for Other were capped at +10% of the prior year's factors for Niche Marketing."
- $289 from $263 is Direct Marketing's acquisition factor, capped at the 10% limit for a second straight year, with the premium-based factor rising to 72% from 65% and maintenance to $87 from $79 a policy.
- 1% to 2% is all Independent and Career moved, to $212 and $235, and those two channels hold every company that reported using the 2026 GRET: 50% of users were Independent and 6% Career.
- 25% of responding companies used the 2026 table, down from 34%, and none of them sat in Direct Marketing or Other, the two channels whose factors moved the most.
- 77 companies make up the merged Other channel against 111 across Niche and Other a year earlier, because the Institute assigned channels through staff analysis for the first time and Independent grew to 174 companies from 150.
What the Letter Recommends, Channel by Channel
Each year the GRET is built from two years of Annual Statement expense data, this time 2024 and 2025. NAIC staff supplied 712 companies for 2024 and 702 for 2025; after removing reinsurers, companies with de minimis expenses, actual-to-expected outliers beyond 350% or below 10% of the channel median, and any company averaging more than $40,000 of first-year premium per policy, 377 companies remained, three fewer than last year. Each channel's factor is the unweighted average A/E ratio times a common seed of $200 per policy, $1.10 per $1,000 of face, 50% of premium and $60 of maintenance.
| Channel | Acquisition per policy, 2026 to 2027 | Acquisition % of premium | Maintenance per policy | Companies (2027) | Acquisition expense on the channel's average 2027 policy |
|---|---|---|---|---|---|
| Independent | $217 to $212 | 54% to 53% | $65 to $64 | 174 | $3,108 (66% of $4,696 premium) |
| Career | $238 to $235 | 60% to 59% | $72 to $71 | 101 | $1,443 (91% of $1,592) |
| Direct Marketing | $263 to $289 | 65% to 72% | $79 to $87 | 25 | $951 (124% of $767) |
| Niche Marketing (2026) | $126 | 32% | $38 | 25 (2026) | n/a |
| Other (2026) | $175 | 44% | $53 | 86 (2026) | $550 on the 2027 average policy |
| Other, merged (letter) | $139 | 35% | $42 | 77 | $438 (56% of $782) |
| Other, merged (Aug. 10 update) | $158 | 39% | $47 | 77 | $491 (63% of $782) |
The last column is computed from the letter's Table 1: the per-policy factor, plus the premium factor times the channel's average premium per policy issued, plus the per-unit factor times its average face amount in thousands ($339,000 Independent, $207,000 Career, $73,000 Direct Marketing, $31,000 Other). A Direct Marketing writer's assumed acquisition cost exceeds a full year of premium; an Other writer's is a little over half.
Cap arithmetic is the whole story for Other. The raw merged average exceeded 10% above the Niche factors, so the letter set each factor at 1.10 times Niche's 2026 value: $138.60 rounds to $139, $0.77 to $0.80, 35.2% to 35%, $41.80 to $42. A company-weighted blend of the two 2026 factors, 25 companies at $126 and 86 at $175, comes to $164, and a 10% band around it runs from $148 to $180. The letter's $139 sits below that band; the slides' updated $158 sits inside it.
The Institute has capped a decline before. Its 2023 letter reported that Niche Marketing's factors "need to be capped at a ten percent drop" after lower-ratio companies entered the calculation (NAIC GRET Archive, 2023 letter). What changed this year is the reference point, and the two channels had been moving apart for four years: Niche fell from $151 in the 2022 table to $126 in 2026 while Other rose from $139 to $175. That $139 puts Other back exactly where it stood in 2022.
How the GRET Enters the Self-Support Test
The Life Insurance Illustrations Model Regulation lets an illustration actuary set the disciplined current scale on one of three expense bases: fully allocated expenses, marginal expenses, or "a generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companies" (NAIC Model #582, Section 4.K). Marginal expenses may be used only if they exceed the GRET, and the disciplined current scale may never assume expenses below the chosen minimum. The scale then has to pass the self-support test at every illustrated point from the fifteenth policy anniversary, twentieth for second-to-die, with accumulated policy cash flows at or above the policy owner value available.
Expenses sit on the cost side of that accumulation, so a lower GRET makes a given illustrated scale easier to support and a higher one harder. For a home-service or pre-need writer electing the table, assumed acquisition expense on its average $782 policy falls from $550 under the 2026 Other factors to $438 under the letter, or to $491 under the update. Maintenance falls from $53 to $42 a policy a year, and across a fifteen-year test horizon that $11 compounds into roughly $165 per policy before interest and persistency, larger than the acquisition saving itself.
Direct Marketing runs the other way. On its average $767 policy the assumed acquisition load rises from $864 to $951, and maintenance adds $8 a year. Ten percent a year for two consecutive years, on a channel whose acquisition cost already exceeds first-year premium, tightens the test more than the headline factor suggests because the premium-based component carries most of the load: 72% of $767 is $552 of the $951.
Whether anyone in those two channels feels it is a separate question. The letter's survey found 25% of responding companies used the 2026 GRET, down from 34%, and "no respondents from Direct Marketing or Other reported using the GRET Factors" (SOA Research Institute, August 2026). Half the users were Independent and 6% Career, the channels that moved 1% to 2%.
Channel usage swings with the sample. In 2023, 60% of Direct Marketing responders and 40% of Niche Marketers used the table, and the 2022 survey had none in Career or Other. The Institute attributes the variation to "the relatively small sample size and different responders." LATF adopted the 2026 table on October 2, 2025 (SOA Research Institute), the calendar the 2027 table now follows.
The Merged Category Becomes the Expense Benchmark
The letter says the combination "has also been extended to the upcoming SOA Research Institute / LIMRA expense study that we plan on releasing in 2027." That study, unlike the GRET, is read by pricing actuaries as a peer benchmark rather than an illustration floor, and the merged line will define home service, pre-need and worksite expense levels for the industry from 2027.
On the letter's own numbers, the two populations being merged look different. Niche Marketing's 2026 average face amount was $15,000 a policy; Other's was $35,000, restated on an aggregate basis; the merged channel lands at $31,000. Niche was defined as home-service, pre-need and final-expense writers plus small-face specialists. Other was defined, in every letter since 2022, as companies that "did not respond to this or prior year surveys," a group the Institute itself describes as including "companies not currently writing new business or whose major line of business is not individual life insurance," and it has asked LATF for help shrinking it each year.
This year it shrank by a different route. The Institute assigned channels "through either self-reporting to the SOA, or through CLICE and SOA staff analysis," and Independent picked up 24 companies while the merged Other holds 77 against last year's 111. So the 2027 Other factor is computed on a population that lost roughly a third of its members to reclassification in the same year it absorbed Niche, and the A/E averages behind $139 and $158 come from that reshuffled set.
That segment, the one the merged line will benchmark, is the fastest-growing part of the market by policy count. LIMRA put 2025 individual life new premium above $17.5 billion, with whole life policy count up 12% for the year, driven by final expense (LIMRA, March 2026). Karen Terry, head of LIMRA Insurance Research, said "we witnessed a number of companies expanded their final expense and smaller-face amount business." Those are Niche companies by the old definition, and this site has tracked the same shift in simplified-issue and accelerated underwriting sales.
The $139 and the $158 differ only by the choice of anchor, and the expense study inherits the category either way. Its home-service and pre-need line will carry non-responders and companies not writing individual life, the population the Institute has asked regulators to help it reduce every year since at least 2022, and which the 2027 table merges into the channel instead of separating out.