NU Online News Service, Dec. 1, 2003, 6:05 p.m. EST – The New York State Insurance Department has sent life insurers a letter giving them more information about how it wants them to compute the amount of reserves they need to back the “guaranteed living benefits” sold along with variable annuities.[@@]
In most cases, the computations must assume a 20% drop in the market value of both bond fund and stock fund assets.
The New York department now requires insurers under its jurisdiction to submit actuarial opinions and memoranda for all VA living benefits business.
Although the new department letter provides a step-by-step numerical example of how to compute living benefits reserves, the department still is asking affected insurers to describe their own methods for calculating living benefit reserves in their actuarial memoranda.