Minneapolis roadshow to draw diverse participation
By Jim Connolly
Regulators, company CEOs, life insurance associations and actuaries will meet in Minneapolis Aug. 22-23 to discuss the best way to create efficient, streamlined reserving for life insurance products.
Principle-based reserving, which relies more on actuarial judgment and individual company circumstances than on the current formulaic approach for reserving, will be the focus of the interim meeting of the National Association of Insurance Commissioners, Kansas City, Mo. It will be discussed and compared with the current way reserving is done.
The discussion will take place even as the NAIC prepares to consider and possibly adopt an interim reserving approach for universal life products with secondary guarantees, Actuarial Guideline 38. AG 38 stands a good chance of being fully adopted by the NAIC at its fall meeting Sept. 10-13, says Jim Poolman, North Dakota insurance commissioner and chair of the NAIC’s Life & Annuities “A” Committee, which is examining the issue of principle-based reserving.
Poolman says the issue has implications for consumers, the life insurance market and solvency oversight. Consequently, he continues, regulators will balance the need for strong regulation and speed. The discussions will be informational, but there will also be a general discussion of charges for the “A” Committee and the Life & Health Actuarial Task Force, which reports to the “A” Committee, he says.
The interim decision sunsets in 2007, and Poolman says it will be at the top of the NAIC’s agenda for life insurance regulation during that time.
Among the issues that regulators will have to weigh is how to proceed with changes that are uniform, he adds.
Life insurance CEOs that are expected to speak at the interim meeting are Bob Davis of USAA, San Antonio, Texas; Dennis Glass, president and CEO with Jefferson-Pilot Financial, Greensboro, N.C.; and John D. Johns, chairman, president and CEO of Protective Life Corp., Birmingham, Ala. Both Glass and Johns are founding co-chairs of the Affordable Life Insurance Alliance, Washington.
The American Council of Life Insurers, Washington, is also expected to testify at the meeting. At press time, specifics of those comments were not available.
The American Academy of Actuaries will start its presentation by explaining how the concept of a principle-based approach evolved over the last decade, according to Dave Sandberg, a life actuary with Allianz Life Ins. Co. of America, Minneapolis, and an Academy representative. That overview will include current projects on reserving for universal life products and work on an NAIC initiative of reserving through the C-3 Phase II project.