Description: This is a simplified approach to calculating the variance of the whole life random variable in certain, very common circumstances.

Description: Since solvency assessment depends on a financial reporting framework, one needs risk metrics for use in financial reporting. The essay argues that conceptually, the cost of capital is the appropriate metric for reserves, while a probability level is the appropriate metric for capital. Then the essay advocates stress testing on specific scenarios as a better practical approach to ORSA.

Description: Under non-Aristotelian logic, there are multiple values, or shades of gray. Indeed, there may even be unexpected results from logical combinations, like “both” and “neither.” This article discusses how this insight should be applied to the current debate between formula-driven reserves with limited assumption flexibility and the reserve principles approach. For reserve standards, we do need both actuarial judgment grounded in reserving principles and restrictive formula methods or safe harbors.

Description: This paper demonstrates that the variance of the loss function for n-year term is greater than the sum of the variances of the loss functions for n-year pure endowment and n-year regular endowment plans. The result is true for both single premiums and annual premium plans.

Description: Discusses the influence of market-consistent pricing proponents.