VA Reserving Timetable: Adopt In 04, Implement In 05
Regulators at the National Association of Insurance Commissioners have decided to postpone implementation of a risk-based capital and reserving project for variable annuities with guarantees. Instead of taking place at year-end 2004, implementation will occur at year-end 2005.
Regulators said they still intend to complete work on the C-3, Phase II project by the end of this year. The project examines C-3 risk, the risk of underestimating liabilities for existing business or business to be written during the year RBC is to be measured.
Although some regulators expressed “disappointment” that after more than 2 years of work the project could not be put in place this year, there was no objection raised to the comment that the project was not ready to be advanced during the NAIC summer meeting this week.
In response to a comment that the standard scenarioa proposal introduced by New York that seeks reasonable constraints to actuarial judgmentwas not ready at this point, New York regulator Bill Carmello said the state could not support a 2004 year-end adoption without its inclusion.
There also was concern raised that insurance departments may not have the resources to oversee results that are produced.