Tax Reform: Implications on ModelsIntermediary) Background: Off Shore Reinsurance Direct Writer US Reinsurer Non-US Affiliate Reinsurer ... (Directly Offshore) Background: Off Shore Reinsurance Direct Writer Non-US Reinsurer Back to Example 1 ...
Description: "Tax reform took effect on Jan. 1, 2018 and institutes sweeping changes in the nation’s taxation policy for insurance companies and individuals. Actuaries should be prepared to quickly implement the new policies in actuarial models and address any challenges. In this session, we will focus on understanding the implications on modeling for existing products sold by life and annuity companies. The session will begin with a brief overview of the tax policy changes, followed by a discussion of the implications on actuarial models. This session idea focuses on modeling implications, but could be combined with implications on financial reporting, cash flow testing, product pricing, reinsurance strategy, etc. Specific topics covered will include: 1) Major changes to tax policy: corporate taxes, tax reserves, DAC tax, off-shore reinsurance, DTA/DTL, carrybacks/forwards 2) Summary of financial impacts on the industry: For the insurance industry, corporate rate decrease will be offset by smaller changes. 3) Implications on actuarial models a. High level i. Example: offsetting changes should be grouped together in a single reporting period b. Impacts from each update on: i. Input requirements ii. Methodologies and simplifications iii. Output requirements c. Challenges and potential solutions i. Examples: modeling the “base erosion AMT”; modeling the new accounting basis for amortizing the tax reserve impact"Hide
- Authors: Melanie Dunn, David McKay, Samuel Schauf, Yang Yu
- Date: Sep 2018
- Competency: External Forces & Industry Knowledge
- Topics: Financial Reporting & Accounting>Tax accounting; Public Policy