The National Association of Insurance Commissioners is getting ready to alpha test a new, possibly more flexible approach to setting and assessing life insurance company reserves.
The Life and Health Actuarial Task Force at the NAIC, Kansas City, Mo., has prepared for the arrival of the NAIC Valuation Manual, which will reflect a principles-based reserving philosophy, by creating a PBR Testing Subgroup.
The testing subgroup will advise the NAIC’s Principles-Based Reserving Working Group and the Life Insurance and Annuities Committee, officials say.
The NAIC helps state insurance regulators develop and standardize insurance regulations and legislative proposals.
Advocates of a PBR approach want insurers and regulators to make more use of actuarial judgment and modern statistical forecasting methods when setting reserves, and less use of static, one-size-fits-most formulas.