At the upcoming meeting of the National Association of Insurance Commissioners (NAIC) in Indianapolis, state regulatory leadership will begin in earnest to steer implementation of principle-based reserving, the so-called modernization of reserving for life insurers.
The Executive Committee of the NAIC will consider adoption of items from the PBR Implementation Task Force, including a plan to modify the regulatory system in order to implement PBR in about three years.
The PBR Task Force recommended to the executivecommittee that two major components as necessary to support the review and updating process: an NAIC-staffed actuarial team, or review board, and another working group to work on valuation analysis — a sort of think tank for reserving issues.
A team of actuaries with PBR certification, if it is developed, would be hired on as staff at the NAIC and the state regulators’ association would also contract with actuarial consultants — as it has done in the past to look at actuarial issues — and/or modeling experts to supplement this NAIC team.
Besides providing analysis, support and consistency, this team would also maintain a confidential database accessible by regulators “to support consistent judgment and treatment of PBR questions and issues,” according to the task force’s document, adopted July 26.