Description: This article intends to provide some background on how and when the state variation issues came about, why these issues present a challenge to the valuation actuary, what seems to be the current practice in dealing with these challenges, and how these issues can be addressed more effectively and efficiently in the future. From Society of Actuaries Financial Reporting Monograph, M-AS99-1.

Description: This paper addresses the classification of products according to their accounting standards: SFAS 60 for traditional products, SFAS 97 for interest sensitive products, and SOP 95-1 for participating products. In particular, the question of which products should be classified under the Statement of Position will be addressed. In addition, it will be shown that if a product's dividend formula passes on to the policyholder significantly less than a full asset share an over-reserving problem will occur if the Statement of Position is used as the accounting system.