Description: This article discusses XXX reserve financing, one of the most common life insurance industry capital markets funding transactions.

Description: Description of FASB redeliberations on targeted improvements for long duration contracts as of the end of 2017, including a summary of the anticipated impacts

Description: A change in the way in which statutory life insurance and annuity reserves are determined in the United States is heading toward adoption. Currently, the Actuarial Opinion and Memorandum Regulation AOMR combines formulaic factor-based minimum reserves with reserve adequacy testing. The American Academy of Actuaries Academy is working with the National Association of Insurance Commissioners NAIC to finalize the basic framework of a principles-based reserve PBR methodology, based on a gross premium valuation, for life insurance products. The NAIC Life and Health Actuarial Task Force LHATF has also been considering Actuarial Guideline VACARVM that would introduce a PBR method for the valuation of variable annuity contracts.

Description: The paper explores developments through 2006 in the application of market-consistent concepts to the measurement of fair values of liabilities for financial reporting purposes. A set of criteria is presented that should be useful in the evaluation of proposed fair value measurement approaches where inputs based on prices observed in an active market with reliable transaction prices are not available. Based on these criteria, one approach is examined that might serve as a basis for the fair value measurement of the liability of life insurance contracts and other financial instruments issued by insurers.

Description: Describes a process for identifying relevant industry experience to credibility-weight with relevant company experience to set modeling assumptions and margins.

Description: VM-20 requires prudent estimate assumptions that are based upon a combination of company experience, industry basic tables and prescribed margins. VM-20 has requirements on how company experience is defined, and also requires that additional margins be established if the actuary does not consider the prescribed margins to be adequate.

Description: Implementation of Statement of Position 03-1 for Lapse Protected Life Products

Description: On June 10, 2016, the Taxation Section hosted a webcast entitled “Federal Income Tax Issues Every Company Must Consider under Life PBR.” Panelists Kristin R. Norberg, Mark S. Smith, and Peter H. Winslow led the audience through an exploration of the many potential tax issues and areas of interpretation that will arise once principle-based reserves (PBR) becomes the new statutory financial reporting regime for life insurance contracts. This brief article recaps the webcast and provides an update on continuing PBR adoption activity.

Description: An observation is made regarding the impact interest rate scenarios have on VM-20 stochastic reserves.

Description: Article summarizes how life insurers have financed redundant XXX and AXXX reserves in the past and how methods may change under principle-based reserves.