Despite concerns on the conservatism (or lack thereof) on some reserving approaches, the NAIC’s vaunted Principles-Based Reserves (PBR) document should be able to come up for adoption by the NAIC at its March National Meeting in New Orleans, according to a key member of the Life Actuarial Task Force (LATF).
On a conference call to discuss VM-20, the section of the NAIC Valuation Manual for individual life insurance Thursday, actuary and Deputy Director of the South Carolina Department of Insurance Leslie Jones said the March adoption date would clear the way for the NAIC to get a packet together for legislatures meeting in 2013, the year some states who meet biannually do convene.
The valuation law was adopted a couple of years back, but the valuation manual will be a “living, breathing document,” said Jones, who also chairs LATF.
“We feel we are very close to finalizing VM-20,” Jones said on the call, which resulted in a compromise on an investment issue, but not a valid vote, as there was no quorum.
The task force wants to knock out four key issues of VM-20 during four hour and half conference calls, she said, noting that all the preliminary work done so far by the task force and the outside actuarial consultant, Towers Watson, has narrowed concerns down to 1) the reinvestment break, 2) difficulties with the net premium reserve (calculation), 3) credibility blending and 4) margins.
“We can resolve each issue by the end of the call or have a game plan to get it resolved by end of call,” Jones said. “That is how we are going to get it done by March. The states that only meet every two years meet in 2013 so this is the year to do it. It is important to stay focused and get it done,” she said.