Life Insurance: Overview and Implementation of VM-20

This session will cover topics such as the calculation of the minimum reserve; examples of the Deterministic Reserve, the Stochastic Reserve, and the Net Premium Reserve; the deterministic and stochastic exclusion tests; recent changes to VM-20; and key issues impacting the implementation of VM-20.

Mortality Overview: Life Insurance

This session will include consideration of aggregation of products in determining mortality rates and credibility percentages and blending into industry tables.

Additional Liability Assumption Overview

This session will cover the main assumptions necessary for a Term and/or Universal Life with Secondary Guarantees (ULSG) PBR model. Assumptions covered will include lapses, premium persistency, credited rate function, expenses, and taxes; and the assumption governance manual.

PBR Life Insurance Asset Overview

This session will include considerations of choosing inforce assets for PBR testing, assets to be assumed for reinvestments, and use of tables for spreads and default assumptions.

Break

PBR Life Insurance Reinsurance Overview

This session will include considerations made by ceding companies and  reinsurers in projecting reinsurance cash flows. It will also cover some current reinsurance issues pertaining to PBR that are being considered by the National Association of Insurance Commissioners (NAIC).

Break

Modeling Overview and Model Governance

This session will cover the requirements around PBR modeling, including specific inputs, projection capabilities, and output formats. Issues around inforce compression, scenario generation, cross-model leveraging, model validation, and practical modeling decisions will also be discussed during this presentation. Included here will be applicability to variable annuities. An overview of the Model Governance Practice Note, Model Governance Checklists, PBR Website; specific information on practice notes, Actuarial Standards of Practice (ASOPs), PBR Analysis Template, and other sources of PBR information.

Questions and Answers on the Day’s Topics

Variable Annuities: Reserve Change Analysis and Pricing Projections

This session will focus on what can cause changes in reserve levels, as well as discuss methodologies used in pricing projections.

Break

Variable Annuities: Changes to VM-21 & Risk-Based Capital (RBC) C-3 Phase II, Setting Variable Annuity (VA) Liability Assumptions

This session will include an overview of framework changes, including stochastic and Standard Projection components, scenario changes, new disclosure calculations, transition, and next steps. It will also include assumption setting considerations for the stochastic projections. 

Break

Variable Annuities: ​​​​​​​Standard Projection Methodology—Basics & Disclosures

This session will cover the two approaches to calculating the Standard Project Amount—Company-Specific Market Path (CSMP) vs. Conditional Tail Expectation with Prescribed Assumptions (CTEPA).

Variable Annuities: ​​​​​​​Standard Projection Prescribed Assumptions and Implementation

This session will focus on implementation considerations for the Standard Project Amount (e.g., withdrawal cohort delay method, conforming and nonconforming lapses, differences between Guaranteed Actuarial Present Value (GAPV) and actual projections, keeping contracts inforce).

Variable Annuities: ​​​​​​​New York Regulation 213 on PBR

This session will focus on the changes to PBR that will be required for filing in New York.

Questions and Answers on the Day’s Topics

NAIC PBR Reviews

This session will feature discussion of reviews that have been done by NAIC staff, the California Department of Insurance, and other states.

Break

Reviewing PBR

Reviewing PBR from an Auditor’s Perspective: What auditors are looking for in a PBR review regarding methodologies used, governance controls, experience studies, etc.

Preparing for Regulatory and Auditor PBR Reviews: What companies are typically doing to prepare for PBR reviews by regulators and auditors. 

Break

Sample Reports and Regulatory Review

This session will include reviews of VM-31 (reporting), VM-51 (experience studies), a sample report, and Annual Statement changes.

Break

Regulatory Updates

This session will feature a regulatory focus, including brief discussion of the NAIC PBA staff activities, such as: asset spreads and defaults, experience studies, future plans regarding regulatory reviews of VM-20 and VM-21 reports.  It will also discuss future updates on VM-20 (life), VM-21 (variable annuities), VM-22/23 (fixed annuities and valuation interest rates), VM-31 (reporting), VM-51 (experience studies), and long-term care.

Questions and Answers on the Day’s Topics