A building block in creating new actuarial tables that are used in reserving but also affect pricing got an O.K. from regulators after strong disagreement was raised about whether more work was needed.
And that uncertainty could delay the project for up to six months or more.
The Valuation Basic Table is a cornerstone for creating new Commissioners’ Ordinary Tables that determine reserving. Based upon how much reserving is needed, it is a factor in determining premium pricing.
The issue cuts to two needs: the need to speedily put new tables in place to replace what is generally agreed are arcane reserving tables and the need to “fairly” reflect reserving requirements.
During several meetings of regulators, actuaries and insurers, Larry Gorski, chief actuary with the Illinois insurance department, has said that differences in two sets of data used in creating the VBT need further examination. Gorski has raised concerns on a smoker/nonsmoker VBT and exclusion of mortality data from Bragg and Associates in Atlanta. (See NU, Oct. 29.)