VA Guarantees, Shadow Accounts Debated By Regulators
Reserving for guaranteed living benefits in variable annuities may be clarified if a proposed actuarial guideline advances toward adoption by the National Association of Insurance Commissioners next week.
The draft of the Reserves for Variable Annuities with Guaranteed Living Benefits actuarial guideline, otherwise known as Actuarial Guideline MMMM, has been under consideration by the Life & Health Actuarial Task Force of the National Association of Insurance Commissioners, Kansas City, Mo., for four years.
Last week, LHATF adopted the draft. It will be reviewed by the NAICs “A” committee and could be fully adopted and ready to implement by year-end.
Inclusion of an asset adequacy test to make sure that reserves are sufficient for these product guarantees helped regulators reach consensus on the draft guideline. It would require that an appointed actuary must perform a standalone asset adequacy analysis of a VAGLB reserve.