State regulators are awaiting results from a survey of variable annuity companies designed to help the regulators judge the adequacy of a proposed reserve model for VAs.
But at least one regulator, Allen Elstein, a life actuary with the Connecticut insurance department, is urging fellow insurance watchdogs to ensure quality control by not making the deadline for responses from companies too short.
The Life and Health Actuarial Task Force of the National Association of Insurance Commissioners is considering a draft of the actuarial guideline, Variable Annuity-Commissioners Annuity Reserve Valuation Method, known as AG VA-CARVM. Work on the guideline has been underway for several years. The reserving work for VAs with guarantees follows the C-3 Phase II project, which establishes guidelines for setting aside capital for these products.
The survey was developed in March and then sent out to companies. Seven of 9 companies should have preliminary data ready by the end of April, according to recent discussions by the NAIC, Kansas City, Mo.
Four companies have completed the survey, but 1 company says it will not have data ready until July 1, according to Larry Bruning, a life actuary and Kansas regulator who is heading up the subgroup looking at the AG VA-CARVM issue.
In a discussion to extend the deadline to July 1, John Bruins, a life actuary representing the American Council of Life Insurers, Washington, asked if an extension would rule out adoption of the model by yearend.
Regulators responded that the draft could still be adopted at the NAIC December winter meeting.
Connecticut’s Elstein suggested that since VA companies have to go through a number of steps to complete the survey, they should be given the time to take a methodical, careful approach, even if it means adopting the model in 2008.