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Academy Addresses Retirement Issues With the NAIC
Two Academy members participated in the NAIC Center for Insurance Policy and Research (CIPR) Symposium on retirement issues earlier this week. Lifetime Income Risk Joint Task Force member Mark Shemtob presented on lifetime income insurance products and related issues, including various types of annuities and the importance of consumer education; the joint task force is charged with addressing the risks and related issues of inadequate guaranteed lifetime income among retirees. Warren Jones, chairperson of the LTC Terminations Work Group, was a panelist on a discussion about the future of long-term care support and services. The presentation was a continuation of the Academy’s ongoing efforts to identify lifetime income solutions for older Americans and how annuities and insured products can help meet the needs of this population.
Recently Released
The Summer 2015 edition of Retirement Account contains articles on the Pension Committee’s revised practice note on mortality assumptions; testimony from Ellen Kleinstuber, vice chairperson of the Pension Committee, to the ERISA Advisory Council; and news and announcements on upcoming Academy pension events.
Alerts
- The U.S. House of Representatives passed a series of bills related to Medicare this week, including legislation to repeal the medical device tax, establish a three-year demonstration program within Medicare Advantage (MA), and make other MA changes. Read the full alert here or on the member section of the Academy website under “Health Issues.”
- The Department of Treasury on Wednesday issued proposed and temporary rules for implementing the Multiemployer Pension Reform Act of 2014. The proposed and temporary rules provide a framework for “critical and declining status” multiemployer plans to apply for a reduction of pension benefits. The revenue procedure and application requirements were also released. The public comment period ends Aug. 18, 2015. Read the full alert here or on the member section of the Academy website under “Pension Issues.”
 Representing the U.S. Profession Internationally
- Academy President Mary D. Miller and President-Elect Tom Wildsmith attended the Canadian Institute of Actuaries (CIA) 50th Anniversary Annual Meeting celebration in Ottawa, Ontario, and at their gala dinner, Miller presented the Institute with a vase inscribed with both logos and our shared birth year of 1965 to commemorate our shared history with that organization. Both organizations were formed to be the one national organization for actuaries of all practice areas in their respective countries.
From the Actuarial Standards Board (ASB)
- Capital Adequacy Assessment for Insurers, a discussion draft developed by the Enterprise Risk Management (ERM) Committee of the ASB, is now available for comment. The ERM Committee seeks input on a proposed actuarial standard of practice (ASOP) that will provide guidance to actuaries involved in the preparation or review of capital adequacy assessment work for life or health insurers, property and casualty insurers, and similar entities, including the preparation or review of an Own Risk and Solvency Assessment (ORSA) report. Please send comments by July 15.
Public Policy and Professionalism Outreach
Academy volunteers and staff presented updates of the Academy’s ongoing work at the recent Health Meeting of the Society of Actuaries. Audrey Halvorson, Susan Pantely, and Martin Staehlin of the Health Care Delivery Committee discussed possible reforms that would address health care costs, including models of care delivery, Medicare and Medicaid reform, and prevention and wellness programs. Halvorson joined Vice President for Health Cathy Murphy-Barron, Senior Health Fellow Cori Uccello, and Academy President-Elect Tom Wildsmith in sharing recent efforts to provide legislators and regulators leadership, objective expertise, and actuarial advice on risk and financial security issues. Finally, Joeff Williams of the Council on Professionalism gave a presentation on actuarial professionalism, providing an overview of the Code of Professional Conduct, the U.S. Qualification Standards, and professionalism considerations related to new and emerging practice areas.
- The Financial Regulatory Task Force sent a letter to the U.S. House Financial Services Committee on the Financial Stability Oversight Council 2015 annual report. The letter highlighted the contributions of actuarial professionalism to U.S. financial stability.
- The Academy’s Public Plans Subcommittee and the Pension Finance Task Force submitted separate comments for the ASB’s July 9 hearing on public pension issues.
Upcoming Events
- Reminder: ASB to Hold Hearing on Public Pension Plans: The ASB will hold a public hearing on the need for new or revised ASOPs applicable to actuarial work regarding public pension plans on July 9 at the Ronald Reagan Building and International Trade Center in Washington. Read more here.
- Register now for the Profits Followed By Losses Webinar: The Profits Followed by Losses Subgroup will hold a webinar on July 1 to discuss its new practice note. Chairperson Robert Frasca of the subgroup and member Charles Chacosky will provide background on the Accounting Standards Codification (ASC) 944-60 Premium Deficiency and Loss Recognition guidance, which provides the accounting foundation for situations of profits followed by losses; the identification of profits followed by losses and common situations in which they are encountered; and actuarial approaches that may be considered to address situations of profits followed by losses in GAAP-basis financial statements. Learn more and register for the webinar here.
Deadline Approaches for Academy’s Highest Awards
In the News—Extensive Coverage
As lawmakers prepare to address the possible elimination of federal premium subsidies in states participating in the federally facilitated marketplace in the wake of the King v. Burwell case before the Supreme Court, the Academy’s issue brief Implications of Proposed Changes to the ACA in Response to King v. Burwell continues to serve as a valuable resource to media outlets reporting on that possible outcome.
A front-page New York Times article is the latest national media story to directly cite the issue brief in its reporting of Capitol Hill activity leading up to the ruling, expected later this month. The Times quoted the Academy’s brief: “An immediate or near-term elimination of federal premium subsidies would cause massive disruption in the individual market. Potentially millions of people would drop coverage, and the average costs of those remaining insured would soar.”
Other sources that cited the issue brief this week include Daily Kos, Houston Public Media, The Center for American Progress Action Fund, and Avalere Health. - An editorial by The (Riverside, Calif.) Press-Enterprise cites the Academy issue brief, The 80% Pension Funding Standard Myth. The editorial board points to the Academy’s analysis in urging financial discipline by county supervisors.
- JD Supra mentions the Academy in a story examining the Centers for Medicare & Medicaid Services’ proposed new rule for Medicaid managed care regulations. The story notes that the proposed rule would require Medicaid managed care rate setting to be actuarially sound and quotes from the Academy’s Actuarial Soundness report, issued in 2012, which states, “There is no federal regulatory requirement that rates be actuarially sound for a particular MCO [managed care organization]. ...An MCO reasonably could decide to accept rates for a particular year, knowing that it expects an underwriting loss in that year. Such a decision may be a reasonable business decision, given that the MCO is entering a new market or expects underwriting gains to emerge in the future.” The story also ran in Mondaq.
- The Pension Committee practice note Selecting and Documenting Mortality Assumptions for Pensions was posted in BenefitsLink Retirement Plans Newsletter.
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