Description: The article described two methods for calculating the benefit ratio described in AICPA Standard of Practice SOP 03-1. Method 1 calculates the benefit ratio as the quotient of the expectation of A and the expectation of B where A is benefits and B is assessments. Method 2 calculates the benefit ratio as the expectation of the quotient of A and B.

Description: This article analyzes two common interpretations of SOP 03-1 in determining the guaranteed minimum death benefit GMDB liability in a variable annuity contract, and it analyzes the resulting impact on the initial GMDB reserve and on the volatility of GAAP earnings as actual experience emerges. This analysis could be applied to the guaranteed minimum income benefit GMIB, guaranteed minimum accumulation benefit GMAB, guaranteed minimum withdrawal benefit GMWB and other guaranteed benefits in a variable annuity contract that are subject to SOP 03-1, and the conclusions would be similar.

Description: This article provides the reader with some insights regarding tax planning under the new required methodology.

Description: A pension actuary and a life actuary collaborate to express public pension liability and asset issues in terms and figures that an insurer would use