The National Association of Insurance Commissioners could have a new version of the Standard Valuation Law ready for consideration by state legislators by January 2010.
Leslie Jones, a South Carolina regulator and co-chair of the Life & Health Actuarial Task Force at the NAIC, Kansas City, Mo., gave that assessment during a recent discussion of work on the SVL.
The SVL model sets the standards for calculating life insurance reserves.
The LHATF wants to complete the SVL amendments and vote on them during the NAIC’s winter meeting, which is set to start Dec. 5 in Grapevine, Texas, Jones said.
The LHATF also is plowing ahead with efforts to complete the Valuation Manual, Jones said.
The manual is a guide that will help users implement the revised SVL.
To get both the SVL amendments and the manual ready for adoption by the full NAIC by November 2009, the LHATF needs to adopt the valuation manual by September 2009, by the latest, and preferably by June 2009, according to participants in the SVL discussion.
To keep the project on schedule, LHATF subgroups need to complete parts of the valuation manual by March 2009, regulators said.
The SVL and valuation manual efforts have been shaped by efforts to shift the U.S. life insurance industry to a “principles-based” reserving system.
Advocates of a PBR approach want to shift to an emphasis on general principles, “stochastic” statistical forecasting techniques and thoughtful use of actuarial judgment, and away from reliance on static formulas.
Regulators are trying to speed up the work by making decisions about Valuation Manual specifics.
With regard to Section 20 of the valuation manual, for example, regulators decided during the LHATF discussion to require insurers to use standard scenarios developed by regulators rather than company-specific scenarios.