Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Life Health > Life Insurance

ACLI Reacts To Interim Life Reserving Proposal

By Jim Connolly

X
Your article was successfully shared with the contacts you provided.

Many life insurers want regulators to include preferred mortality tables and lapse rates in a temporary life reserving system.

A representative for the American Council of Life Insurers, Washington, talked about those goals here during a Life & Health Actuarial Task Force session at the spring meeting of the National Association of Insurance Commissioners, Kansas City, Mo.

The American Academy of Actuaries, Washington, is trying to help the NAIC develop a permanent, flexible, “principles-based” life reserving model that would rely heavily on actuarial judgment.

The ACLI wants to see the NAIC adopt an interim model for use while work on the principles-based model continues.

Paul Graham, ACLI chief actuary, asked at the spring meeting for regulators to consider work done by Tillinghast, at the request of the ACLI, on developing preferred mortality tables, which could reflect improvements in mortality data.

Life insurers favor the development of preferred mortality tables from existing actuarial tables rather than the creation of new tables, Graham said.

Basing new tables on existing tables could help keep new product filing costs down and address concerns about how the Treasury Department would interpret the definition of life insurance if a super-preferred table were developed that was not part of the existing tables. There is no guarantee that the Treasury Department would continue to treat such tables in the same way that Section 7702 currently is treated, Graham said.

Graham asked that regulators expedite consideration of the tables, but LHATF members said they preferred to start by having the Society of Actuaries, Schaumburg, Ill., review the tables and give its “blessing” that they are actuarially sound. LHATF members moved to have the SOA review the tables.

Graham also asked that regulators let insurers take projections for lapsation into account when reserving for universal life products with secondary guarantees.

Advocates for that approach have asked the NAIC for a legal opinion about whether insurers can use lapse-supported rates in UL secondary guarantee reserve calculations, speakers said here at the LHATF session.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.