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October 02, 2007 at 12:11 PM
Actuaries at the American Council of Life Insurers are talking to Bush administration officials about efforts to modernize U.S. life and annuity reserving rules.
Paul Graham, a life actuary with the American Council of Life Insurers, Washington, described the talks here at the fall meeting of the National Association of Insurance Commissioners, Kansas City, Mo., at a Life & Health Actuarial Task Force session.
The session focused on efforts to shift to flexible, “principles-based reserving” methods that rely on modern statistical forecasting techniques, rather than relying on unchanging formulas.
In the past, life insurance tax experts have suggested that life insurers and life industry regulators should proceed carefully with efforts to rewrite reserving rules to avoid disrupting tax rules based on the existing reserving rules.
The ACLI has been working with U.S. Treasury Department officials by providing information about AG VACARVM, a proposed reserving guideline for variable annuities with secondary guarantees and about various principles-based reserving proposals that would affect life insurance products, Graham said.
The ACLI has been explaining how the proposed rules would be different from the current rules and how the rules for variable annuities would be different from the rules for life insurance policies, Graham said.
