Key insurance commissioners want a task force to keep working on a model guideline for universal life secondary guarantee reserves.[@@]
Commissioners here at the winter meeting of the National Association of Insurance Commissioners, Kansas City, Mo., said the actuaries should focus more on reserving strategies based on actuarial models and less on traditional, formula-based methods.
The commissioners were reacting to a draft of Actuarial Guideline 38, a model that would set reserve requirements for UL secondary guarantees.
The commissioners, members of the NAIC’s “A” Committee, voted to ask members of the NAIC’s Life & Health Actuarial Task Force, the actuaries working on AG 38, to come up with an approach that uses models and asset-adequacy analysis as a basis for establishing reserves.
Committee members say shifting to a model-based approach would give insurance product developers more flexibility and reduce the future need to tinker with actuarial rules.
Committee members talked bluntly about insurers’ split on the reserving issue.
Nebraska Director Tim Wagner said he has seen nothing that has so polarized the industry since he began attending NAIC meetings in 1968.
“Somehow government has got to be an umpire,” Wagner said.
Wagner compared proponents and opponents of AG 38 to “2 cats using the same litterbox.”