Life and Health Actuarial Task Force
March 28 - 29, 2008

The Life and Health Actuarial Task Force met on Friday and Saturday, March 28th and 29th, 2008. During this meeting, the Life and Health Actuarial Task Force, with comments from industry and the actuarial profession:
· Continued to work on various projects related to conversion to a principles-based system:
o The development of revisions to the Standard Valuation Law to enable principles-based reserves and
o The development of a valuation manual.
· Exposed for comment
o A proposed Actuarial Guideline to provide guidance for computing reserves for group term life waiver of premium benefits.
o A revised data format for statistical reporting of life insurance experience.
o Sections of the proposed valuation manual
o A draft of the proposed revised Standard Valuation Law
· Received reports from the following, which were primarily related to various mortality table projects and implementing a principles-based valuation system:
o Joint SOA/AAA Preferred Mortality Project Oversight Group
o LHATF subgroups working on sections of the valuation manual.
o LHATF Accident and Health Working Group
o Commissioner Al Gross (IAIS Technical Committee) on the decrease in reinsurance and securitization resources companies could be facing.
· Decided to request a joint subgroup with the Casualty Actuarial Task Force to address matters related to all actuaries, such as the processes of appointing an actuary and removing an appointed actuary.

The primary work of this meeting was to consider proposed amendment to the proposed revision of the Standard Valuation Law. Some of the key issues addressed were:
· Clarifying the valuation manual only applies prospectively except for the Actuarial Opinion Memorandum.
· Defining terms such as appointed actuary, qualified actuary and cash flows.
· Formatting of the proposed model law.
· Consistency corrections.

LHATF considered removing from the operative requirements the requirement that states adopt the revised Standard Valuation Law representing at least 50% of the applicable insurance in force. LHATF decided the current provisions offer balance between jurisdictions with limited amounts of insurance and jurisdictions with significant amounts of insurance.

LHATF added a provision in the proposed revisions to the Standard Valuation Law that permits commissioners to modify or opt-out of any provisions of the valuation manual through regulations.

LHATF considered the issue of how to handle the case when companies materially understate reserves. The Task Force consensus was that some punitive action was needed to prevent the worst case being a company being only required to change the reserves to an appropriate amount. LHATF requests the Life Insurance "A" Committee and Principles-Based (EX) Work Group provide guidance on this matter.

Action Items

None