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Regulatory Resource for Actuaries: Life & Annuity

The SOA recently reviewed regulatory resource site metrics.  Web traffic has been lower than what would be needed to justify the volunteer effort and other costs associated with maintaining this tool.  For this reason, the SOA has made the difficult decision to terminate this initiative.  We thank you for your understanding.

Please reach out to David Schraub with any questions.

General Information Sources

Selected Topics


Last reviewed: 11/21/19


Recent Updates

General Information Sources

Actuarial Standards Board – Actuarial Standards of Practice (ASOPs)

The Actuarial Standards Board (ASB) establishes and improves standards of actuarial practice. These Actuarial Standards of Practice (ASOPs) identify what the actuary should consider, document, and disclose when performing an actuarial assignment. The ASB’s goal is to set standards for appropriate practice for the United States. 

Current ASOPs 
The link is to the current ASOPs which may be found on the Actuarial Standards Board website. The list can be filtered to display  Life ASOPs and  General ASOPs.

ASOP Discussion Drafts 
This link is to ASOP Discussion drafts. Discussion Drafts are released as an initial step in seeking comments on changes to existing or creation of new standards of practice.

ASOP Exposure Drafts  
ASOP exposure drafts. Exposure drafts are released by AAA for feedback from the actuarial community after obtaining Actuarial Standards Board (ASB) and legal reviews. 

ASOP Proposal - Setting Assumptions
Notable changes to the second exposure draft are revisions to the scope, including to indicate that when an actuary is assessing the reasonableness of assumptions set by others, the actuary should follow the guidance in section 3 to the extent practicable, and to clarify which ASOP will govern if another ASOP provides guidance on setting assumptions. The comment deadline for the second exposure draft is July 31, 2019. (Posted 4/2019)

ASOP No. 2 Revision Proposal – Nonguaranteed Elements (NGEs) for Life Insurance and Annuity Products
ASOP was updated to reflect current practices and provide additional guidance on the determination of NGEs. The comment deadline is July 15, 2019. (Posted 5/2019)

ASOP No. 22 Revision Proposal - Statements of Actuarial Opinion Based on Asset Adequacy Analysis for Life or Health Liabilities 
Changes to the exposure draft include revising the purpose and scope in sections 1.1 and 1.2 from applying to actuaries when providing a SAO for life and health insurers to applying to actuaries when providing a SAO relating to asset adequacy analysis of life and health liabilities. The comment deadline for the exposure draft ended June 1, 2019. (Posted 4/2019)

ASOP Proposal - Modeling                       
The draft changes include clearer accommodation of forms of modeling other than financial projection modeling (such as predictive and statistical modeling); A revision of Scope; Addition of Reasonable Model in the Aggregate, and related disclosure; Inclusion of Reliance on Experts; and Elimination of the Presentation of Results section.
The deadline for receipt of responses ended May 15, 2019. (Posted 3/2019)

ASOP No. 55 on Capital Adequacy Assessment for Insurers 
The ASB has adopted Actuarial Standard of Practice No. 55 regarding Capital Adequacy Assessment for Insurers. The effective date is November 1, 2019. (Posted 7/2019)


American Academy of Actuaries (AAA)

The American Academy of Actuaries is a professional association whose mission is to serve the public and the U.S. actuarial profession. The Academy assists public policymakers on all levels by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets qualification, practice, and professionalism standards for actuaries credentialed by one or more of the five U.S.-based actuarial organizations in the United States.

American Academy of Actuaries Life Practice Council Committees
The Life Practice Council oversees the Academy's public policy work on life insurance issues. This link provides an overview of the various committees and groups which support the Life Practice Council's mission. The following are examples of interest to the Life & Annuity community:

    • Life Capital Adequacy Committee 
      Addresses issues related to life and annuity risk-based capital (RBC) requirements.
    • Life Experience Committee 
      Interfaces with work groups of the Society of Actuaries (SOA) regarding experience studies.
    • Life Financial Reporting Committee   
      Responsible for topics related to life insurance financial reporting matters, focusing primarily on Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).
    • Life Products Committee 
      Focuses on emerging issues in product development including pricing, underwriting, and disclosures.
    • Life Valuation Committee 
      Addresses topics related to the valuation of life insurance and annuity products, focusing primarily on statutory valuation techniques.
    • Lifetime Income Risk Joint Task Force   
      Reviews and evaluates the risks and related issues of inadequate guaranteed lifetime income among retirees
    • Stress Testing Work Group
      Evaluates the use of stress testing in the calculation of reserves and capital.
    • Tax Work Group   
      Provides insights on tax issues related to life and annuity products

American Academy of Actuaries - Life Practice Notes  
Practice notes provide guidance to actuaries on various issues such as product development, market conduct, valuation, capital management, and risk management.

Life Illustrations Practice Note  
The Life Illustrations Work Group updated its 2018 practice note to reflect implications from the 2017 passage of the Tax Cuts and Jobs Act, pertinent to ASOP No. 24, Compliance with the NAIC Life Insurance Illustrations Model Regulation.

U.S. Qualification Standards  

This document describes the standards U.S. actuaries are required to meet (by virtue of the Code of Professional Conduct) to issue Statements of Actuarial Opinion when rendering Actuarial Services.


Federal Regulations & Legislation

Federal Insurance Office
The FIO was established by the Dodd-Frank Act which granted the FIO certain financial stability, monitoring, and international responsibilities. It advises the Secretary of the Treasury (Secretary) on major domestic and prudential international insurance policy issues and serving as a non-voting member on the Financial Stability Oversight Council (FSOC).

Securities and Exchange Commission -– Adopts Regulation Best Interest Proposed Rule
On June 5, 2019 the Securities and Exchange Commission  voted to adopt a package of rulemakings and interpretations designed to enhance the quality and transparency of retail investors’ relationships with investment advisers and broker-dealers, bringing the legal requirements and mandated disclosures in line with reasonable investor expectations, while preserving access (in terms of choice and cost) to a variety of investment services and products.  Specifically, these actions include new Regulation Best Interest, the new Form CRS Relationship Summary, and two separate interpretations under the Investment Advisers Act of 1940. The new rule has been adopted, effective June 30, 2020. (Posted 7/2019) 


International Standards

European Financial Reporting Advisory Group (EFRAG)
EFRAG is a private association established in 2001 with the encouragement of the European Commission to serve the public interest.  Its Member Organizations are European stakeholders and National Organisations having knowledge and interest in the development of IFRS and how they contribute to the efficiency of capital markets.  

International Financial Reporting Standards
IFRS Standards are set by the International Accounting Standards Board and are used primarily by publically accountable companies—those listed on a stock exchange and by financial institutions, such as banks.  A full listing of Standards can be found at this page, along with links to the unaccompanied Standards.  


Latest Life Insurance Prudential Standards
The Australian Prudential Regulation Authority (APRA) oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, private health insurance, friendly societies and most members of the superannuation industry. The APRA web page contains news and regulatory requirements.


Life Insurance Capital Adequacy Test

The Office of the Superintendent of Financial Institutions (OSFI) is an independent agency of the Government of Canada. OSFI has issue the final version of the Life Insurance Capital Adequacy Test (LICAT) guideline.

OSFI’s Latest guidelines on IFRS9 (Accounting)

OSFI’s latest guidelines on IFRS9 (Accounting) provide application guidance to Federally Regulated Entities (FREs) applying International Financial Reporting Standard 9 Financial Instruments (IFRS 9), and is effective when IFRS 9 is applicable to FREs.  

Hong Kong

The Hong Kong Insurance Authority is an insurance regulator independent of the Government. The objectives are to modernize the regulatory infrastructure to facilitate the stable development of the Hong Kong insurance industry, provide better protection for policy holders, and comply with the requirement of the IAIS that insurance regulators should be financially and operationally independent of the government and industry. Another important organization is the Actuarial Society of Hong Kong. (Posted 8/2019)

New Zealand

Professional Standards
The New Zealand Society of Actuaries web site includes professional standards.


Interstate Insurance Product Regulatory Commission

Adopted Uniform Product Standards  
Individual and Group Life and Individual Annuity product standards for the purpose of approval of policy forms, riders, and applications in 40+ states. Also contains IIPRC operating procedure information.

Docket Developing Standards 
IIPRC Pending standards under development or existing standard in the process of being reviewed.

Filing CSO Mortality Table Updates with the IIPRC  
Information on how to file 2017 CSO Mortality table changes to previously approved life insurance plans with the IIPRC. Contains additional links to product standard, checklists, and best practices.

Interstate Insurance Product Regulatory Commission 
The IIPRC adopts product standards for Annuity and Life Insurance products. Product standards for Annuity and Life Insurance products 


National Association of Insurance Commissioners (NAIC)

The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.

NAIC Committees, Task Forces, & Working Groups  
This link provides a summary and links to the individual web pages of the committees, task forces, and working groups which makeup the NAIC and carry out its functions. Each individual web page contains information such as meeting materials, exposure drafts, and related documents. The following are examples of interest to the Life & Annuity community:

NAIC Model Laws  
The NAIC creates Model Laws in an effort to promote uniformity across the industry. States individually enact insurance laws, which are generally the NAIC's Models Laws in their entirety or with changes. 


State Regulations & Legislation

American Academy of Actuaries –State Scan   
Legislative bill summaries and status on key topics for all 50 states.

California 2018 Actuarial Memorandum and Executive Summary  
Provides filing instructions and requirements associated with California's Actuarial Memorandum and Regulatory Asset Adequacy Issues Summary documents. (Posted 11/2018)

Illinois Department of Insurance   
Illinois DOI Company Bulletin 2018-11 with comments concerning Health Insurance Reporting, Rate Filings and Valuation Manual.  Illinois DOI Company Bulletin 2018-11 with comments concerning Health Insurance Reporting, Rate Filings and Valuation Manual. (Posted 11/2018)

New York State Department of Financial Services Financial Reporting and Reserve Valuation Requirements for Domestic Life Companies, Including the Annual Special Considerations Letter   
The Special Considerations Letter for 2019 has been Posted. Forms and instructions provided to domestic life insurance companies and fraternal benefit organizations doing business in New York and all insurers holding a certificate from the Superintendent as being accredited for the reinsurance of life insurance, annuities, or accident and health insurance for required filings. (Posted 11/2019)

New York State Department of Financial Services Financial Reporting and Reserve Valuation Requirements for Foreign Life Companies, Including the Annual Special Considerations Letter
The Special Considerations Letter for 2019 has been Posted. Industry Letters and Surveys are available for all foreign life insurance companies and fraternal benefit societies doing business in New York and all insurers holding a certificate from the Superintendent as being accredited for the reinsurance of life insurance, annuities, or accident and health insurance. (Posted 11/2019)

New York Adopts PBR Legislation  
The bills adopted are identical Assembly Bill No. A.11116A and Senate Bill No. S.8978A. PBR allows insurance companies to hold reserves based on credible experience that is tailored to the companies’ particular products, within the strict guidelines that will be set by DFS for New York. (Posted 12/2018)

New York Adopts PBR Emergency Regulation
The emergency regulation to begin the implementation of principle-based reserving (PBR) will become effective on January 1, 2020.  The emergency regulation affirms the Superintendent’s statutory authority to deviate from the (NAIC Valuation Manual to adjust reserves, if necessary, in order to protect New York policyholders and the State’s life insurance industry. (Posted 12/ 2018) 

New York Proposes Regulation 213
This proposed New York regulation specifies changes to the NAIC Valuation Manual for New York Reserves and was published in the New York State Register on October 30th for a 60-day public comment period.  A summary may be found here. (Posted 11/2019)

New York State Department of Financial Services – Insurance Regulation 210
NYDFS Rule establishing standards for the determination and any readjustment for non-guaranteed elements that may vary at the insurer’s discretion for life insurance policies and annuity contracts.

New York DFS - Suitability and Best Interests in Life Insurance and Annuity Transactions
The new Regulation 187 requires insurers to establish standards and procedures to supervise recommendations by agents and brokers to consumers with respect to life insurance policies and annuity contracts issued in New York State so any transaction is in the best interest of the consumer and appropriately addresses the insurance needs and financial objectives of the consumer at the time of the transaction.

The National Conference of Insurance Legislators (NCOIL)   
NCOIL helps legislators make informed decisions on insurance issues that affect policyholders and monitor federal / state authority under the McCarran-Ferguson Act.


U.S. Federal Taxation

Tax Code, Regulations, and Official Guidance
US federal taxation is addressed within the Internal Revenue Code (IRC). As not all tax issues can be definitively addressed by the IRC, tax regulation is also shaped by other sources such as Treasury regulations, revenue rulings, and court cases. This webpage provides general links to the IRC (Title 26 of the U.S. Code), Treasury regulations, and other official tax guidance maintained by the Internal Revenue Service (IRS).

Federal Income Taxation of Life Insurance Companies
Life insurance companies (see IRC §816 for definition of life insurance company) receive favorable federal income tax treatment. This link provides relevant sections of the IRC to determine the Life Insurance Company Taxable Income (LICTI) for federal income tax purposes. Of particular note to actuaries is IRC §807, defining tax reserves. A life insurance company would also be subject to the general provisions of the IRC for insurance companies (e.g., "DAC Tax" under IRC §848).

IRC §72: Taxation of Annuities & Certain Proceeds of Endowment and Life Insurance Contracts
This section of the IRC describes the portions of annuity, endowment, and life insurance contracts includible in gross income for federal income tax purposes.

IRC §7702: Definition of Life Insurance
To receive favorable tax treatment, a life insurance policy must meet the definition of Life Insurance as specified in IRC §7702. Policyholders generally make the reasonable assumption that life insurance contracts purchased from an insurer will be treated as life insurance for tax purposes—insurers (and their actuaries) should be diligent in designing their products to comply with federal income taxation definitions of life insurance.

IRC §7702A: Definition Modified Endowment Contract
A life insurance policy meeting the definition of life insurance under IRC §7702 (see above) is considered a Modified Endowment Contract if it satisfies the definition in IRC §7702A. While Modified Endowment Contracts still receive favorable tax treatment, certain limitation and penalties may apply (see IRC §72).

IRC §7702B: Treatment of Qualified Long-Term Care Insurance
A Qualified Long-Term Care Insurance Contract does not pay or reimburse expenses incurred for services or items reimbursable under the SSA or reimbursable but for the deductible or coinsurance amount, is guaranteed renewable, does not provide cash surrender value or other money that can be paid, assigned, or pledged as collateral for a loan, or borrowed and meets other requirements.

Tax Cuts and Jobs Act
This law amends the Internal Revenue Code (IRC) to reduce tax rates and modify policies, credits, and deductions for individuals and businesses. 



U.S. Generally Accepted Accounting Principles (US GAAP)

The Securities Exchange Act of 1934 granted the Securities and Exchange Commission (SEC) authority to promulgate financial accounting standards for non-governmental entities. The Financial Accounting Standards Board (FASB) was eventually created and designated by the SEC as the organization responsible for establishing and maintaining these accounting standards (US GAAP). In addition to FASB pronouncements, rules and interpretative releases of the SEC are also sources of authoritative GAAP for SEC registrants.


Accounting Standards Codification (ASC) Topic 944: Insurance
The Accounting Standards Codification (ASC) is the source of authoritative Generally Accepted Accounting Principles (GAAP) recognized by the Financial Accounting Standards Board (FASB). Topic 944 covers insurance and replaces the Statements of Financial Accounting Standards (e.g., SFAS 60, SFAS 97, SFAS 120, etc.) previously promulgated by FASB (pre-codification). The ASC can be viewed at this link for free by registering for the Basic View.

FASB Projects
This page provides information on the current projects being undertaken by the Financial Accounting Standards Board (FASB), including an agenda of current projects, active exposure drafts, discussion papers, and other project documents.


Selected Topics

Capital Standards

Capital Adequacy Exposure Draft
The ASB approved a third exposure draft of a proposed new ASOP titled Capital Adequacy Assessment. The ASOP will provide guidance to actuaries when performing professional services with respect to a review of the resiliency of an insurer through a capital adequacy assessment. The comment deadline ended March 1, 2019. (3/2019)

Group Capital Calculations Working Group
The charge of the NAIC Working Group is to construct a U.S. group capital calculation using an RBC aggregation methodology; liaise as necessary with the ComFrame Development and Analysis (G) Working Group on international capital developments and consider group capital developments by the Federal Reserve Board, both of which may help inform the construction of a U.S. group capital calculation.

Standards for Life Insurance Required Capital Levels 
Discussion Draft document which contains a proposal for an ASOP associated with current regulatory work on capital levels for life insurance products.



IFRS 17 International Accounting for Insurance Contracts  

EFRAG – IFRS 17 Project Page   

Project page for the IFRS 17 activity taken on by the European Financial Reporting Advisory Group (EFRAG) in support of the European Commission endorsement process.  This page includes information on the status of the project, recent announcements, and documents released throughout the project.  

IAA IFRS 17 Resource Page
The International Actuarial Association (IAA) is preparing materials to support IAA member associations and actuaries worldwide with the application and implementation of IFRS 17.   

IASB Issues IFRS 17    
The International Accounting Standards Board (IASB) has issued IFRS 17, global guidelines that require insurance companies to report specific information about the insurance contracts issued and the reinsurance contracts held. IFRS 17 will significantly impact insurer operations, including more transparency on returns and risk. The effective date of IFRS 17 as adopted, is January 1, 2021. During the November 2018 Board meeting, the IASB tentatively agreed to defer this effective date by one year.  (documents and a webinar)on the subject.  

IFRS 17 Limited Scope Exposure Draft
The IASB published the limited scope Exposure Draft containing key proposed changes to its accounting standard IFRS 17 Insurance Contracts. A 90-day comment period has been set, with responses to the amendments due by 25 September 2019. (Posted 7/2019)

Interest Rates

Current and historical federal and other interest rates

Composite Corporate Bond Rates 
Composite Corporate Bond Rate Table published by the IRS

Federal Reserve System Historical Interest Rates 
The H.15 release contains daily interest rates for selected U.S. Treasury and private money market and capital market instruments. It is published weekly.

Federal Reserve System Data Download 
This link is to capability to download historical interest rate data maintained by the Federal Reserve System.

IRS Monthly Interest Rate Updates 
Interest rate tables managed by the IRS.

Maximum Reserve Valuation and Maximum Life Policy Nonforfeiture Interest – Rates – New York 
The maximum reserve valuation and non-forfeiture interest rates, prescribed by Sections 4217 and 4221(k) of the New York Insurance Law, are specified in "Table A through Table H Rates." Such rates vary from year to year based on Moody’s corporate bond yield averages for 12 and 36 months ending on June 30, and weighting factors prescribed by Section 4217. The Moody’s averages are provided for years 1981 to present. (Posted 10/2019)

VM-20 Spreads & Defaults

VM-22 Daily Corporate Rates


Principle-Based Reserving

Actuarial Standards of Practice (ASOP) 52- Principle-Based Reserves for Life Products under the NAIC Valuation Manual
This standard applies to actuaries when performing actuarial services on behalf of life insurance companies, including fraternal benefit societies, in connection with the calculation or review of reserves for life insurance policies subject to “VM-20: Requirements for Principle-Based Reserves for Life Products” in the Valuation Manual (VM-20).

PBR in Practice AAA Resource Page
The Academy has assembled materials to assist actuaries and regulators as the U.S. moves into the implementation phase of PBR for life insurance.

PBR Resource Assumptions Manual
This resource manual is intended to provide a step-by-step, sample framework for setting, updating, and governing life insurance assumptions for PBR and other valuation frameworks. (3/2019) 

PBR Model Governance Checklist
The PBR Checklist Subgroup of the Life Practice Council of the American Academy of Actuaries (Academy) has developed a model governance.

AAA Practice Note on Life Principle-Based Reserves Under VM-20
This practice note covers principle-based life insurance reserve valuation practices for individual life insurance and represents the views of actuaries that have been involved in the development of the proposed life reserving standards. The purpose is to assist actuaries with implementation of the principle-based life reserve valuation approach adopted by the NAIC.



Reinsurance (E) Task Force
The NAIC has issued updated proposed revisions to the Credit for Reinsurance Model Law and the Credit for Reinsurance Model Regulation to address the reinsurance collateral provisions of the covered agreements between the United States and the European Union and the United Kingdom.  (Posted 3/2019) 


Valuation Manual (VM)

The Valuation Manual (VM) together with the Standard Valuation Law (SVL) form the framework for PBR. Development of the VM is ongoing and the reader should be aware that the version presented in the link(s) below may not represent the most current version available.  Various versions are presented in the table below.

2019 Edition of the Valuation Manual Effective 1/1/2019

2020 Valuation Manual LATF Adopted Amendments
The link details the LATF Adopted Amendments.

2020 Edition of the Valuation Manual (VM) Effective 1/1 2020
Redline Version  
Clean Version 

U.S. GAAP Targeted Improvements for Long-Duration Contracts

Accounting Standards Update 2018-12: Targeted Improvements for Long-Duration Contracts
On August 15, 2018 FASB issued an Accounting Standards Update (ASU) for the financial reporting of long-duration contracts such as life insurance, disability income, long-term care and annuities.

ASU 2018-12—Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration FASB Project Page
On August 15, 2018, the FASB completed its project on the accounting for long-duration contracts issued by insurance entities by issuing the amendments in Update 2018-12.  The new guidance will apply to insurance entities that issue long-duration contracts such as life insurance, disability income insurance, long-term-care insurance, and annuities. The new guidance will not apply to policyholders. (Posted 4/2019)

FASB Updated Effective Date Announced
At the October 16, 2019 Board Meeting, FASB  affirmed its previous decisions related to the effective date of the amendments in Update 2018-12 on targeted improvements for Long-duration insurance contracts. (Posted 11/2019)

AICPA Guidance
The Insurance Expert Panel discusses and deliberates key insurance issues to identify implementation issues for targeted Improvements to the Accounting for Long-Duration Contracts. The link includes a list of potential implementation issues and will be updated as the Insurance Expert Panel continues its discussions. (Posted 10/2019)