BY JIM CONNOLLY
An industry group says it cannot support a proposed actuarial guideline for variable annuities in its current form.
The actuarial guideline, known as VA-CARVM, is being considered by the Life & Health Actuarial Task Force of the National Association of Insurance Commissioners, Kansas City, Mo. The C-3, Phase II project, adopted by the NAIC, addresses risk-based capital for these products.
The American Council of Life Insurers, the Life Insurance Council of New York and other industry representatives met April 6 with regulators from the NAIC.
The ACLI won’t support the draft in its current form because of “a whole laundry list of issues that we disagree with,” according to Bill Kling of AEGON Transamerica, Los Angeles.
“Principle-based reserving seems to have changed course some time ago in a way that the industry did not anticipate,” Kling said.
Among the concerns Kling cited are:
Use of a more conservative CTE 75 statistic rather than a CTE 65 statistic to reflect “tail risk,” or risk that would fall outside the mean;