Description: Summary of recent surveys to life actuaries regarding assumptions surrounding policyholder behavior in the tail for universal life with secondary guarantees and minimum guarantees on variable annuities. This information is intended to examine and ultimately give guidance to actuaries on how to set policyholder assumptions in extreme scenarios.

Description: A short article looking at the results from an annual assumption survey of VA writers with a focus on changes companies observed and planned to make due to COVID-19. In the article we discuss what companies should be considering as they approach the 2020 year end assumption setting and audit season.

Description: This article begins with an overview of how the tax treatment of partial exchanges has evolved over the last decade or so, including the concerns that led the Service to resist giving taxpayers carte blanche on such transactions.The new guidance shortens from 12 to six months the window following a partial exchange in which the transaction could be called into question, and simplifies the regime by de-linking it from the exceptions to the section 72q penalty tax.4 Finally, the guidance provides coordination with recent partial annuitization legislation and answers to other open issues. This article then summarizes Rev. Proc. 2011-38 and elaborates on why the features outlined above are important and helpful improvements over prior guidance.

Description: Summary of research project designed to document method to credit interest rates to account value based products. The investment year method (IYM) can theoretically align with investment strategy and be fair to policyholders. These products were designed in the 1980s with guaranteed nominal rates above what is currently accessible so most products credit the guaranteed rate. This paper documents how it could be resurrected during the next interest rate cycle.

Description: ASU 2018-12 introduced a new concept called “market risk benefits” (MRBs). MRBs are a new accounting classification for benefits within deposit contracts, offering protection from “other than nominal market risk.” This applies to products with account values, including variable and indexed annuities with guaranteed living or death benefits attached (aka GMxBs). ASU 2018-12 Section 944-40-30-19D mentions both a non-option and an option-based valuation approach to account for MRBs. This article considers the option-based approach. The purpose is to highlight weaknesses in the current application of the option approach to MRBs, propose an alternative method, and consider the benefits of the new approach. The intent of this article is to persuade practictioners / actuaries / accountants that this is a better approach for applying the fair value option method to market risk benefits.

Description: Accounting Standards Update (ASU) 2018-12, commonly referred to as long duration targeted improvements (LDTI), is the most significant GAAP accounting change impacting the life insurance industry in the past 40 years. This article discusses the impact of LDTI on variable annuities (VA) and fixed indexed annuities (FIA) from a product development and in-force management angle. Detailed discussion topics include hedging and ALM, product strategy and development, and pricing. LDTI will cause many VA and FIA writers to re-evaluate their hedging and asset liability management (ALM) strategy following the move to fair value accounting under the new MRB requirement. Stakeholder appetite for accounting volatility and resulting changes to hedging and ALM may trigger changes in product mix and designs. In addition to updating pricing infrastructure to handle the new requirements, pricing actuaries will need to produce analyses to educate stakeholders on the risks and pricing implications of any changes to designs, hedging and ALM.

Description: Provide high level summary of predictive modelling.

Description: Provide high level summary of changes to Valuation Rates for Payout Annuities and similar contracts.

Description: Encourages readers to visit specified URL to read selected essays from “Life Insurance 2020 Foresight—A Call For Essays.

Description: Summary of the upcoming activities for the Smaller Insurance Company Section in 2016.