Several National Association of Insurance Commissioners panels have voted to advance a newly amended Standard Valuation Law, but the Life Insurance and Annuities Committee has not yet spoken.
The life committee has agreed to hold the Standard Valuation Law at its level and to discuss and, possibly, vote on the passage of the law, no later than 10 days before the NAIC fall meeting, which is set to start Sept. 21.
The SVL model serves as an example states can emulate when setting standards for calculating life insurance reserves.
The Life and Health Actuarial Task Force at the NAIC, Kansas City, Mo., is trying to amend the SVL to emphasize use of sensible principles, statistical forecasting techniques and actuarial judgment, and away from a reliance on unchanging formulas.
Three arms of the NAIC – the Premium Based Reserving Working Group, the Solvency Modernization Initiative Task Force, and the life committee- held a joint conference call Tuesday to review the proposed SVL amendments.
Members of the PBR Working Group voted 13-2 to endorse the SVL amendments. New York and Alabama voted against the amendments.
Members of the Solvency Modernization Initiative Task Force voted 8-2 for the amendments. On that task force, New York and Wisconsin cast the votes in opposition to passage.
The life committee was in line to vote on the SVL proposal.
The committee’s chair, Kermitt Brooks, the acting superintendent of the New York State Insurance Department, then spoke.
“I think it would be prudent to await for the completion of the valuation manual,” Brooks said.
A comment letter from the American Council of Life Insurers, Washington, “underscores the usefulness of understanding all underlying parts of PBR,” Brooks said.
But Brooks appeared to be trying to ease concerns about whether the SVL amendments would eventually be passed.
“It’s more of a coordination or process matter,” Brooks said.
If the amended Standard Valuation Law is passed by the life committee, the NAIC Executive Committee will then consider the amendments.
If the full NAIC approves the SVL amendments, it will be up to legislators and regulators in individual states to implement the SVL changes.
The ACLI is continuing to seek changes in the current version of the SVL draft.
Some of the individuals who joined the NAIC call Tuesday said they did not see the logic in passing an amended Standard Valuation Law without a Standard Valuation Manual.
Other participants are eager to pass the current version of the law, seeing passage as a step toward finally establishing a principles-based reserving system.
The American Academy of Actuaries, Washington, is supporting the SVL revision, saying that it is fit to be passed as is.
“The American Academy of Actuaries continues to encourage the NAIC and its Life Insurance and Annuities Committee to adopt the proposed revisions without delay to establish greater uniformity of life insurance reserve requirements across states,” Tom Campbell, vice president of the AAA Life Practice Council, said in a statement after the call.