PBA Implementation Guide

The Smaller Insurance Company and Financial Reporting Sections along with the Committee on Life Insurance Research are pleased to announce the release of a research report to provide a better understanding of the key considerations an insurer would encounter in making a principle-based framework for determining reserves and risk-based capital (PBA) a reality.

Authored by Tim Cardinal and Steve Stockman of Actuarial Compass, LLC, the PBA Implementation Guide provides verbal summaries and visual flow chart overviews of various VM-20 and PBA components and requirements, Case Study Road Maps, and action items to bridge the gaps and implement PBA. The Guide has been developed through interviews and analyses from responses to a survey questionnaire.

Enhancements from the prior 2013 PBA Implementation Guide:

  1. Revisions as if it were based on the text contained in the November 22, 2015, VM.


  2. Provides an additional chapter outlining what’s new and different in the November 22, 2015, VM since the December 2012 version (Chapter 0).


  3. Provides a second report (PBA Implementation: Beginning Tales) that identifies issues based on feedback and lessons learned from companies in the middle of implementation, including considerations in moving from implementation to production.


  4.  Provides numerical examples of several required calculations (PBA Implementation: Calculation Examples).


The opinions expressed and conclusions reached by the authors are their own and do not represent any official position of the Society of Actuaries or its members. The Society of Actuaries makes no representation or warranty to the accuracy of the information. In addition, the discussion, flow charts, case studies, action items, and examples presented in these papers and software are for educational purposes. They are not to be viewed as an authoritative statement by the Society of Actuaries on implementing a principle-based framework for determining reserves and risk-based capital.


PBA Implementation Guide

PBA Implementation Guide Case Studies & Templates

Asset Defaults and Spreads Example

DR Example

Term DET Example

Term NPR Example

SERT Example

VM20 Mortality Example

PBA Implementation: Beginning Tales

Thank You

The Sponsors and authors would like to thank the following individuals who served on the Project Oversight Group:

  • Joeff Williams, FSA, MAAA, Chair
  • Todd Erkis, FSA, CERA, MAAA
  • Henry E. Egesi, FSA, MAAA
  • Michael Fruchter, FSA, MAAA
  • Pamela A. Hutchins, FSA, MAAA
  • Mike Y. Leung, FSA, MAAA
  • Donna Novak, FCA, ASA, MAAA
  • Kathryn Shelton, FSA, MAAA
  • Brad Shepherd, FSA, MAAA
  • Jason Kehrberg, FSA, MAAA
  • Andrew J. Rarus, ASA, MAAA
  • David Wang, FIA, FSA, MAAA
  • Tim Cardinal, FSA, CERA, MAAA
  • Jan Schuh, SOA Senior Research Administrator
  • Ronora Stryker, ASA, MAAA, SOA Research Actuary

  The sponsors and authors also would like to thank the companies and regulators that participated in the study.