Description: The goal for an insurance firm is to maximize value. This paper describes the approach using an objective function of the Option Adjusted Value of Distributable Earnings OAVDE. The paper provides a review of the evolution of accounting treatment suggests a methodology for estimating market value of assets and liabilities extends that market value to the value of the firm using OAVDE and illustrates how this methodology can be incorporated into an insurance firm's financial management. From Society of Actuaries Financial Reporting Monograph, M-AS99-1.

Description: This paper identifies several implicit assumptions underlying the use of the lognormal distribution for modeling the periodic change in the interest rate of a given maturity, tests those assumptions against historical interest rates, and presents additional information from those tests. A discussion of the paper follows. From Transactions of Society of Actuaries 1991, Vol. 43.

Description: 1996 Valuation Actuary Symposium. Questions asked and answered included: 1. What do regulators expect or want as far as asset adequacy analysis for shorter-term liabilities such as IBNR? 2. What responsibility does the appointed actuary have in verifying reserves for reinsured business? 3. If the assets for the market value adjusted annuity are held in a separate account and valued at market, what rates should be used to present value the projected guaranteed benefits? 4. May a company perform the cash-flow testing based on the low level of reserves held in the domiciliary state rather than the higher reserve actually held in the state with the special state in filing? 5. Have there been any situations where an opining valuation actuary has been held personally responsible?

Description: 1996 Valuation Actuary Symposium. The purpose of this session is to enhance understanding of what it means to have an adequate reserve based on cash-flow testing by taking the audience into the world of interest rate models and interest rate model generators.

Description: 1998 Valuation Actuary Symposium. In this open forum questions were fielded by the panel of experts. Some of the questions: 1. How do you pick spreads for use in your reinvestment strategy? 2. What's generally being done in terms of dynamically modeling policyholder lapsation? 3. How do companies treat riders and dump-in premiums and estimated gross profits for GAAP? 4. What impact does the current interest environment have on testing you are going to do this year? 5. Are there any suitable techniques for trying to aggregate the variable products with the fixed products?

Description: This paper presents a policy-year model for GAAP valuation of reinsurance accepted on the coinsurance and modified coinsurance bases. Also presented are the interrelationships between the model's methodology and statutory accounting procedures, a discussion of experience-refunding situations, and a demonstration of the model's ability to yield GAAP profits as a level percentage of premium. From Transactions of Society of Actuaries 1981, Vol. 33.

Description: This session at the 1998 Valuation Actuary Symposium presents a framework for managing surplus based on the knowledge bases of the CFA designation and the SOA curriculum for the finance and investment specialty.

Description: This paper will use a sample example to examine the relationship between the pricing objective of ROI and the corporate profit measure of ROE. From Transactions of Society of Actuaries 1987, Vol. 39.

Description: 1997 Valuation Actuary Symposium, Session 17 discusses market value measures and its uses in asset liability management.

Description: 1992 SOA Annual Meeting, Washington, D.C. This session on cash-flow testing for product actuaries covered the following topics: 1. Guidance notes designed to help in writing up reports on cash-flow testing. 2. Investment strategies in product design. 3. Surplus requirements.