An arm of the National Association of Insurance Commissioners is moving ahead with efforts to develop new reserving rules for issuers of variable annuities.
Members of the NAIC’s Life & Health Actuarial Task Force session voted 11-3 here during the Kansas City, Mo., group’s summer meeting to expose a draft of Actuarial Guideline VACARVM for public comment.
VACARVM is an acronym that refers to the Commissioners Annuity Reserve Valuation Method for Variable Annuities.
Members of the LHATF are expecting to approve the Actuarial Guideline VACARVM at the NAIC’s fall meeting in September.
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New York regulator William Carmello argued that the reserving requirements should be conservative because of the nature of the many guarantee options available with variable annuities.
The variable annuity with guarantees “is a product that I view as toxic and that could definitely bring a company down in an instant,” Carmello said.
Carmello noted that insurers are offering VA contracts with guarantees that reinsurers are not willing to reinsure.
“That’s got to say something,” Carmello added.