After nearly a decade of re-writes, a model guideline, AG VACARVM, which establishes reserving requirements for variable annuities with guarantee provisions, has been exposed for possible adoption.
The vote was taken here during a meeting of the Life & Health Actuarial Task Force during the fall meeting of the NAIC.
The exposure comes after regulators were urged by Tom Campbell, the long-time chair of the Washington-based American Academy of Actuaries VA CARVM work group and a life actuary with Hartford Life, as well as the American Council of Life Insurers, that the model be exposed and ultimately adopted so that what they believe is more effective regulation would be in place when a sunset provision of Actuarial Guideline 39 is triggered on Jan. 1, 2008.
AG 39, a temporary guideline for reserving of annuities with guarantees, was adopted in 2002 for a 2-year period and then renewed for more than 2 years.
A number of regulators argued during the Life & Health Actuarial Task Force that since AG VACARVM is a principles-based proposal it might be better to include it in the development of a valuation manual that will be a guide to principles-based reserving, should that reserving approach be adopted.
But Hartford Life’s Campbell countered that it would be best to adopt a better proposal.