VM-20 Modeled Reserves Seminar

Date

June 05, 2018

Location

Embassy Suites Chicago Downtown
Chicago, IL

  • External Forces & Industry Knowledge

Event Home  |   Agenda  |   CPD  |   Hotel Information  |   Presenters and Moderator  | Registration

 

Registration is now closed. The SOA Customer Service Center is available to assist you Monday through Friday, 8:00 a.m. to 5:00 p.m. CDT. Please call +1-888-697-3900.

 

The Society of Actuaries and PolySystems are co-sponsoring their annual Reserves Seminars this June. The seminars offer a comprehensive and hands on look at on the latest U.S. reserving principles for VM-20, traditional life, universal life and deferred annuity products. 

All actuaries learn about reserving principles while in school or studying for exams. However, applying reserving principles as part of a company’s financial reporting process requires additional education that cannot be provided by a book. 

The Reserves Seminars have been specifically designed by PolySystems to demonstrate how to apply the fundamental principles of reserving to the practical, on-the-job demands of statutory, GAAP, and tax financial reporting. 

Registration is open to all. The concentrated syllabus and classroom style atmosphere of each seminar provides an environment in which new students and senior management alike will expand their knowledge and learn from actuaries with broad and deep experience in valuation processes.  

About The Sponsors

The Society of Actuaries (SOA) is the largest global professional actuarial organization. With unmatched research and education, and more than 28,000 of the highest skilled actuarial professionals, we prepare the individuals trusted to drive better business decisions and promote financial security in an ever-changing world.

PolySystems is a leading provider of comprehensive valuation, modeling and experience study software to life, health and annuity companies. PolySystems’ core strength is designing software solutions that meet regulatory reserve requirements. Their integrated solutions can be used to calculate reserves and capital, run asset/liability projections for CFT and planning, set assumptions, carry out sensitivity and stochastic analyses, manage inforce profitability, price products and more.

PolySystems has been co-sponsoring this Reserves Seminar with the SOA for over a decade and is an industry leader in U.S. reserving methods and techniques. PolySystems has over 100 actuaries and IT professionals working in Chicago, New Jersey and South Carolina to meet actuarial software needs at both the product and enterprise level.

Course Overview

Join us at the 2018 VM-20 Modeled Reserves Seminar for a comprehensive and introductory-level session on U.S. statutory reserving principles for modeled reserves on life insurance products under VM-20.

VM-20 brings long-awaited principle-based approaches to the world of statutory life reserves, allowing companies to use of their own assumptions and cash flow models when calculating the two modeled reserve components of VM-20, the deterministic reserve and stochastic reserve. Under the NAIC’s new Valuation Manual, many companies are required to transition to VM-20 reserve requirements on new life insurance issues by 2020. 

The presentation will cover five main components of VM-20: (1) the formulaic net premium reserve, (2) the modeled deterministic and stochastic reserves, (3) the formulaic deterministic exclusion test, (4) the modeled stochastic exclusion test and (5) VM-20 models.

The presenters will discuss important VM-20 requirements and other considerations for using cash flow models, including the modeling of non-guaranteed elements, the use of model simplifications and approximations and VM-20 constraints on asset projections related to economic scenarios, starting assets, reinvestments, derivatives programs, spreads and default costs.  VM-20 requirements for prudent estimate assumptions, a key element of VM-20 modeled reserve calculations, will also be covered. Spreadsheet examples on how to calculate credibility, determine margins and grade from company experience for mortality rates to the applicable industry table will be provided. Spreadsheets will also be used to present examples of the back-end calculations VM-20 requires on projected cash flows to determine the resulting deterministic reserve, stochastic reserve, and stochastic reserve exclusion test.  The session will conclude by discussing the VM-20 requirements for reinsurance and aggregation and the implications of two related sections in the new Valuation Manual: VM-G on Governance and VM-31 on the PBR Actuarial Report.

Course materials will be distributed via email the week before the class. Class participants are encouraged to bring laptops or tablets to dive into the spreadsheet examples along with the presenters. 

Syllabus

Overview of PBR/VM-20          

Component reserves in the final VM-20 minimum reserve calculation

VM-20 exclusion tests

Tax reserve under the new tax reform legislation

Cash Flow Models      

General VM-20 requirements

Economic scenarios

Modeling assets

Prescribed default cost methodology

Prudent Estimate Mortality     

Company experience mortality rates

The applicable industry table

Experience studies and credibility

Margins and grading

Policyholder behavior

Expenses

Calculating Modeled Reserves from Cash Flow Projections  

Deterministic reserve - GPV and DIM methods

Stochastic exclusion test - ratio test, demonstration, and certification methods

Stochastic reserve - GPVAD method

Satisfying the 2% collar test

Additional Considerations for VM-20 Reserve Calculations   

Reinsurance and aggregation

VM-G governance

VM-31 PBR actuarial report

Additional industry resources

Who Should Attend

Registration is open to all. PolySystems has specifically designed this seminar to demonstrate how to apply the fundamental principles of reserving to the practical, on-the-job demands of statutory, GAAP and tax financial reporting.  The concentrated syllabus and classroom style atmosphere of each seminar provide an environment in which new students and senior management working as actuaries or other professionals will expand their knowledge and learn from actuaries with broad and deep experience in valuation processes.

 

Back

Legend

Communication

Demonstrating the listening, writing and speaking skills required to effectively address diverse technical and nontechnical audiences in both formal and informal settings.

Professional Values

Adhering to standards of professional conduct and practice where all business interactions are based on a foundation of integrity, honesty and impartiality.

External Forces & Industry Knowledge

Identifying and incorporating the implications of economic, social, regulatory, geo-political and business changes into the design and delivery of actuarial solutions.

Leadership

Initiating, innovating, inspiring, creating or otherwise acting to influence others regardless of level or role toward a common goal.

Relationship Management & Interpersonal Collaboration

Creating mutually beneficial relationships and work processes toward a common goal.

Technical Skills & Analytical Problem Solving

Applying the actuarial knowledge, skills and judgment required to provide value-added services.

Strategic Insight & Integration

Anticipating trends and strategically aligning actuarial practice with broader organizational business goals.

Results-Oriented Solutions

Providing effective problem solving that addresses relevant interests and needs.