Life and Health Actuarial Task Force
Life and Health Actuarial Task Force Page
Summer 2009 Meeting Summaries Index

The Life and Health Actuarial Task Force met Thursday and Friday, June 11 and 12.

During these meetings, the Task Force:

• Discussed developments in international accounting for life insurance.

• Discussed the appropriate experience mortality tables and the margins on those mortality tables for the principle-based reserving system and for a net premium reserve system. The Task Force decided to delay development of a new commissioners’ standard ordinary (CSO) mortality table until 2012. The Task Force asked the Society of Actuaries (SOA) and the American Academy of Actuaries (AAA) to collect two more years of experience data for the 2012 table. The Task Force asked the SOA and the AAA to investigate the development of standard valuation mortality tables of guaranteed-issue and simplified-issue life insurance products, as well as annuities in payout mode.

• Discussed a presentation of the AAA regarding a methodology for setting prescribed default cost on existing fixed-income investments in VM-20, the section of the Valuation Manual for life insurance products.

• Discussed a presentation of the AAA Economic Scenarios Work Group regarding the development of a generator to produce interest-rate scenarios for capital and reserve development.

• Discussed a presentation by the American Council of Life Insurers regarding the timeline for an additional net premium reserve methodology for VM-20, the section of the Valuation Manual for life insurance products.

• Received a report from the AAA Nonforfeiture Improvement Work Group.

• Received a report from the Accident and Health Working Group.

• Adopted a revision to the Standard Valuation Law to enable the principle-based approach to valuation and implement the framework of a valuation manual.

• Discussed the proposals in the 2008 Capital and Surplus Relief package the Task Force had recommended for consideration.  The following were adopted:

• Model Regulation Permitting the Recognition of Preferred Mortality Tables for Use in Determining Minimum Reserve Liabilities (Model Regulation #815)
• Actuarial Guideline 1c
• Actuarial Opinion and Memorandum Regulation (Model Regulation #822)
• Valuation of Life Insurance Policies Model Regulation (Model Regulation #830)

• Discussed the application of Actuarial Guideline XXXIII to a new type of guaranteed lifetime income benefit in a fixed annuity.

• Received reports from subgroups on various portions of the Valuation Manual.

• VM-20 was amended and released for comment.
  
• Discussed the company survey on the Capital and Surplus Relief proposals.
  

• Discussed and exposed for comment the Generally Recognized Expense Table (GRET) for 2010 which was developed by the SOA.

Action Items:

• Adopted a revision to the Standard Valuation Law with the recommendation that the law and the Valuation Manual be adopted together.

• Released the VM-20 section of the Valuation Manual for comment.

• Released the 2010 GRET table for comment.

• Adopted the Model Regulation Permitting the Recognition of Preferred Mortality Tables for Use in Determining Minimum Reserve Liabilities (Model Regulation #815).

• Adopted Actuarial Guideline 1c.

• Adopted the Actuarial Opinion and Memorandum Regulation (Model Regulation #822).

• Adopted the Valuation of Life Insurance Policies Model Regulation (Model Regulation #830).