Mortality at older ages has been an increasingly important issue to address for new products and profitability of current products. As people are living longer, assumption for health at older ages is important. Experience at these ages is starting to develop, but is not yet credible. Companies competing for older age business need to be careful of how the older age mortality is developing versus what they are assuming in their models. As actuaries face the outlook of principle based approaches and the assumptions required under that approach, and as companies develop new product designs, many are interested in assumptions and experience of other companies.

The purpose of this project is to identify the assumptions companies have for their life insurance products both that issue to older ages and the long term older age assumptions for younger ages that will achieve an older age. The knowledge from this research will assist actuaries in establishing, validating, and evaluating the sensitivity of the assumptions in their product pricing, valuation and projection models.

This would be a survey of what companies are assuming for mortality at older ages including new business written to an older insured as well as the assumption for those who are surviving into older ages. The survey would address older age assumptions and the slope of mortality leading to those older ages. Included in this survey would be preferred underwriting assumptions at issue or attained older ages, overall mortality assumed, and if any specific methodology used by the company to develop the older age assumptions.

The issues to be investigated include but are not limited to:

• Maximum issue ages by product
• Mortality slope at older ages
• Level of mortality at older ages
• Methodology for wearing off preferred underwriting
• Amount of business written to and/or inforce at older ages
• Any adjustments made to older age mortality given recent reports/experience

The scope of research should include products that issue to older ages. Researchers will need to define appropriate breakdowns for the survey, including product (Ex. Term or UL, with or without secondary guarantees, etc.) and modeling objective (Ex. Pricing vs. cash flow testing) to ensure comparability and to assist in defining specific data requirements for the study. It is expected that follow-up telephone and/or in-person interviews with some of the survey respondents may be required to gather additional information and insight into some of the issues.

The Researcher(s) will compile and analyze the survey responses and summarize the results of the survey in a report made available to the SOA membership. Within the report, the Researcher(s) is encouraged to offer additional solutions to the problems and issues identified.

It is expected that the Researcher(s) will work closely with a Project Oversight Group (POG) in finalizing the information to be collected, the survey questionnaire and/or interview questions, and the final report of survey results. The Researcher(s) will also provide the POG with periodic progress reports. Members of this group will be available to provide feedback and guidance to the Researcher(s) as needed.

To keep costs at a minimum, the intent is for the SOA to administer the survey utilizing SOA online survey software and other resources.

To facilitate the evaluation of proposals, the following information should be submitted:

1. Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education, and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
2. An outline of the approach to be used, emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted, and possible limitations of the analysis, specifically what the Researcher(s) will do with inconclusive or otherwise incomplete survey results.
3. Cost estimates for the research. We expect to reach agreement on a fixed cost for this project with the Researcher(s).

While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.

4. A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions.
5. Ideas regarding the form and distribution of the final report, both for immediate release and for permanent reference (e.g., submission to the North American Actuarial Journal).
6. Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.

The SOA's Product Development Section is responsible for the selection of the proposal to be funded. Input from other knowledgeable individuals also may be sought, but the Product Development Section and/or other sponsoring committees will make the final decision. The SOA's Research Actuary will provide staff actuarial support.

Any questions regarding this RFP should be directed to:

Ronora Stryker
SOA Research Actuary
e-mail: rstryker@soa.org
f: 847.273-8514

If you intend to submit a proposal, please send written notification by October 7, 2011 to:

Jan Schuh
SOA Research Administrator
f: 847.273.8556
e-mail: jschuh@soa.org

Please email a copy of the proposal to:

Jan Schuh at jschuh@soa.org

Proposals must be received no later than October 14, 2011. It is anticipated that all researchers who have submitted proposals will be informed of the status of their proposal no later than November 18, 2011.

Note: Proposals are considered confidential and proprietary.

The Society of Actuaries reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available to proceed. The Society of Actuaries also reserves the right to redirect the project as is deemed advisable.

The Society of Actuaries intends to copyright and publish the results of this research. The research will be considered work-for-hire and all rights thereto belong to the Society of Actuaries. However, appropriate credit will be given to the Researcher(s).