U.S. life insurers are talking about the big new life insurance mortality table shift in some of the reports they file for life insurance policies and annuities that are classified as securities.
The National Association of Insurance Commissioners (NAIC) approved the new 2017 Commissioners’ Standard Ordinary (CSO) Mortality Tables — which help life insurers keep life insurance coverage in place past age 100 — two years ago,
In February 2018, the Internal Revenue Service agreed to let life insurers move to use of the 2017 tables, from the old 2001 tables.
(Related: IRS Blesses 2017 Mortality Tables)
Members of the NAIC’s Life Actuarial Task Force have been looking into letting issuers of guaranteed issue business keep using the 2001 tables in calculations of “minimum nonforfeiture standard values,” or calculations of what some consumers get if they drop their coverage.
But, for now, all insurers are supposed to begin using the 2017 CSO tables for all life products by Jan. 1, 2020.
Issuers of variable life and variable universal life policies and variable annuity contracts file many routine notices and reports with the U.S. Securities and Exchange Commission.
One of Lincoln Financial’s life insurance company subsidiaries recently noted in a filing with state insurance regulators, for an upcoming MoneyGuard III life insurance policy, that it will offer some provisions aimed at policyholders over age 121, in part because of the shift to the 2017 CSO Mortality Tables.
Searching state insurance regulators’ life insurance policy filings by keyword is difficult, but the SEC offers a keyword-based search tool that can be used to identify the term “2017 commissioners’” or “2017 CSO” in the SEC’s collection of variable insurance filings. The SEC has received about 200 filings that refer to those terms.
Here’s a look at three things we found when looked at a sampling of SEC filings that mention the term “2017 CSO.”
1. Some mentions are purely informational.
American Fidelity Assurance Company, for example, mentions the mortality table shift briefly in a registration statement filed in April for its AFPRIMEGROWTH Variable Annuity contract.
American Fidelity notes that life insurance reserves are principally based on the 2017 CSO tables and earlier CSO tables, with interest rate assumptions ranging from 2% to 6%, and that annuity insurance reserves have interest rate assumptions ranging from 3% to 8.8%.