Regulators voted to expose a draft of an actuarial guideline for reserving of variable annuities with living benefits that incorporates a proposal of the American Council of Life Insurers and work from the American Academy of Actuaries.
The 8-4 vote of the Life and Health Actuarial Task Force took place during the winter meeting of the National Association of Insurance Commissioners here. The motion did not include a proposal made by the New York insurance department. Following the vote, several attendees at the meeting told National Underwriter that they feel a barrier may have been finally broken.
Comments made during discussion on the issue suggested a desire to advance the project so action can be taken in 2006. Work on the effort has been ongoing for several years. Mike Batte, LHATF chair, asked, “What does the task force want to do with VA-CARVM?” He noted that to date, the ACLI, Academy and New York department have offered suggestions for reserving, but consensus has not been reached.
Major sticking points have been the use of a standard scenario as a floor and the degree of conservatism the guideline needs.