Description: Research is a primary mission of the Financial Reporting Section and is the largest use of section dues. This scorecard will keep section members informed about research projects sponsored or co-sponsored by the section.

Description: The author refers to a separate article in this edition of Risks and Rewards, in which Babbel, Gold and Merrill provide an excellent exposition of three approaches to present-valuing a series of risky cash flows and provide several insights into the way modern finance theory deals with risk. The purpose of this article is to bring these insights to the world of insurance risks and view them in relation to existing actuarial techniques. The author also discusses direct discounting and the actuarial appraisal method and their consistency.

Description: Read the September 2017 issue of The Financial Reporter published by the Financial Reporting Section.

Description: A summary of a scientific paper written to address the differences and similarities between the option pricing method now more commonly known as fair valuation and the actuarial appraisal method.

Description: In this article, we collected data from the companies’ roll-forward disclosures related to calendar years 2021 and 2022 on Market Risk Benefit and shared a high-level summary of the Market Risk Benefit volatility that a focus group of companies incurred and summarized the most common ways to mitigate volatility.

Description: Discussions of alternative approaching to setting ascribed premiums for market risk benefits under FASB targeted improvements.

Description: In this article, a numerical comparison of two commonly used FIA valuation methodologies is conducted to help insurers decide on the best methodology to use under GAAP LDTI and VM-22. We compared two modeling approaches to project the future index credits with the annual point-to-point crediting formula: Tthe stochastic equity crediting model and the deterministic option budget crediting model. The analysis is then extended to different levels of option budgets and the monthly average crediting formula. The advantages and disadvantages of the two equity return projecting approaches are also highlighted and will be discussed later in the report.

Description: This article discusses the risk management approaches of insurers. The author described some of the current practices of the total return approach, how the total return approach is used in managing risks as a process, and a model that takes future sales into consideration and determines the appropriate fair valuation method of an ongoing business.

Description: Article explores two very different approaches that are currently being considered for use in projecting credited rates on interest sensitive products and show how they can be reconciled with one another.

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.