NAIC SUMMER MEETING WRAP-UP

Update on Mortality Tables
Mary Bahna-Nolan, the Academy’s vice president for life issues, provided an update on the development of the Guaranteed Issue, Simplified Issue, and Preneed mortality tables by the Joint Academy/SOA Preferred Mortality Oversight Group at the Life Actuarial (A) Task Force (LATF) meeting. She noted that accelerated underwriting is an emerging trend.

LATF Adopts VM-20 Modifications
LATF adopted amendment proposals from the Joint Academy/SOA Preferred Mortality Oversight Group for modifications to VM-20 section 9.C.3.a, Section 9.C.3.g and VM-M section 2. The modifications update VM-20 to reference the 2015 Valuation Basic Table (VBT) and remove reference to the 2008 VBT and updates VM-M to include the 2015 VBT.

LATF Exposures

• Academy proposal to modify treatment of YRT in the Stochastic Exclusion Ratio Test. Exposure ended Oct. 2.
• Academy 2017 CSO Valuation Manual Amendment proposals for nonforfeiture and valuation, which include changes to the VM-02, VM-20, VM-A, and VM-M. Exposure ended Sept. 17.
• Amendment proposal from the Joint Academy/SOA Preferred Mortality Oversight Group for modifications to VM-20 section 9.C.3.d defining the underwriting criteria scoring procedure to be used by companies to score every risk class for preferred risk class structure. Exposure ended Sept. 18.
• Two amendment proposals regarding VM-31, including one on the requirements of VM-31 and a second on documentation of items in the PBR Actuarial Report. Exposures ended Sept. 18.
• Proposal to allow for the election of the 2017 CSO mortality table for companies that elect to use current reserve formulas during the three-year PBR transition period. Exposure ended Sept. 17.

ACADEMY LIFE PRACTICE COUNCIL UPDATES

Post-NAIC Update Webinar
The Life Practice Council held a post-NAIC meeting webinar on Aug. 27 that provided an overview of the NAIC Summer 2015 National Meeting. The webinar included an account of the LATF meeting, the Life Risk-Based Capital (E) Working Group meeting, an update on mortality, and other topics.

PBR Panel Discussion at NCOIL
Academy Senior Life Fellow Nancy Bennett discussed PBR at a Life Insurance & Financial Planning Committee panel discussion at the National Conference of Insurance Legislators (NCOIL) Summer Meeting in July.

PROFESSIONALISM

ASB Adopts Draft ASOP on PBR
The Actuarial Standards Board (ASB) adopted a draft of an actuarial standard of practice (ASOP) in August titled Principle-Based Reserves for Life Products. The ASOP provides guidance to actuaries when performing actuarial services in connection with developing or opining on PBR for life insurance that are reported by companies in compliance with the NAIC’s SVL and the VM as adopted in December 2012.

Because the standard involves compliance with a regulation that has not yet taken effect and may undergo changes before it takes effect, the standard will remain in draft form until the VM is adopted. When the VM and the enabling SVL take effect, the standard will be released or, possibly, modified and re-exposed, as further changes may be necessary.

UPCOMING

Annual Meeting and Public Policy Forum
In celebration of its 50 years of service to the public and the U.S. actuarial profession, the Academy is holding its 50th Anniversary Gala in conjunction with its Annual Meeting and Public Policy Forum Nov. 12-13 at the Washington Marriott Wardman Park. Session topics at the Public Policy Forum will include:

• Professionalism Issues Related to PBR
• Captives, Past and Future: XXX, AXXX, and Others
• The Path of PBR Adoption and Implementation—The When and How of Day 1.

To register or for more information, please visit the Academy’s website.

PBR PROGRESS

Thirty-six states, representing more than 60 percent of U.S. direct written premiums, have adopted new Standard Valuation Laws (SVL) as of Oct. 5 that would allow life insurers to start using PBR calculations. Additionally, legislatures in California and North Carolina passed SVL bills but they had not been signed by governors to date. PBR will be effective only after a supermajority of states and territories (42), representing 75 percent of written premium, adopt the revised law and will apply only to new life insurance business.

STATES ADOPTING NEW SVL