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June 01, 2005 at 08:00 PM
ACLIJune6jc –xxx lines
Flag: Regulation
The American Council of Life Insurers, Washington, says that it will weigh in on reserving and capital requirements, investor-owned life insurance and the Terrorism Risk Insurance Act during a summer national meeting of insurance regulators.
When the National Association of Insurance Commissioners meets in Boston this week, those issues along with a discussion of market conduct analysis and a fingerprint database for producers and possibly CEOs, will be monitored by the trade group.
Paul Graham, ACLI vice president-insurance regulation and chief actuary, says that reserving and capital requirements for variable annuities, is important for the ACLI because it is the first of the life products that is being considered in an effort to rely more on principle-based reserving rather than just on strict formulaic based requirements.
A key to the issue, he says, is to ensure tax deductions for reserves are maintained. ACLI believes that a proposal for a standard scenario that creates a minimum floor for reserving would retain that deduction, he adds.
The issue of the standard scenario, he adds, is that it appears to be well above the necessary floor. Indeed, during a recent discussion on the issue, a number of companies and a few insurance regulators expressed some reservation about making the standard scenario part of the reserving and capital adequacy formulas. Rather, according to the discussion, it was suggested that at least initially, the results from a standard scenario could be used for informational purposes.
