Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Regulation and Compliance > State Regulation

Regulators Still Framing VA Guarantee Reserve Rules

By Jim Connolly

X
Your article was successfully shared with the contacts you provided.

NU Online News Service, Feb. 18, 2004, 6:03 p.m. EST – Regulators are still deciding how to frame the new reserve rules for variable annuity guarantees.[@@]

Officials with the National Association of Insurance Commissioners, Kansas City, Mo., are talking about whether any new guidance should be retroactive and whether the guidance should take the form of a law, a regulation or an actuarial guideline.

The American Academy of Actuaries, Washington, is working on VA guarantee reserve valuation for the NAIC. NAIC officials plan to discuss the reserve issue in March, at an NAIC meeting in New York.

Implementing an actuarial guideline would be easier and quicker than creating a new law or regulation, but a new law or regulation might provide more legal certainty, officials say.

NAIC officials are also interested in issues such as due process and consistency with the existing Standard Valuation Law, the law that actuaries now use to determine annuity reserves.

If state legislatures had a chance to discuss and vote on the proposed changes, or state insurance regulators had to go through their standard rulemaking procedures, that would help ensure that insurers would receive due process, officials say.

Some officials have suggested that the NAIC could proceed by including new VA guarantee reserve requirements in the NAIC’s Accounting Practices and Procedures Manual, but Sheldon Summers, a California regulator, has pointed out that the APPM applies only to contracts dated Jan. 1, 2001, or later. Creating new VA guarantee reserve requirements by including them in the APPM could leave treatment of earlier contracts in question.

One possible answer, according to Bill Carmello, a New York regulator, would be to include a floor for reserves that would conform to the Standard Valuation Law.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.