NU Online News Service, Dec. 10, 2003, 9:42 a.m. EST, Anaheim, Calif. – The National Association of Insurance Commissioners, Kansas City, Mo., fully adopted Actuarial Guideline 34 here at the NAIC’s winter meeting.[@@]
The guideline addresses reserves for the guaranteed minimum death benefits sold along with variable annuities.
The guideline requires that an insurer’s actuaries perform a stand-alone asset adequacy analysis for variable annuities with death benefit guarantees. An asset adequacy test helps determine whether a company has enough assets to back its obligations.
Guaranteed minimum death benefits and guaranteed minimum living benefits became an issue when the recent stock slump put many companies’ guarantees “in the money.” Regulators wanted to know that insurers had enough reserves to back the guarantees.