Description: S&P reissued a second Request for Comment (RFC) in May 2023 that proposed changes to their insurer capital adequacy methodology and assumptions, and suggested these proposed changes may become effective at the end of 2023. This paper is to highlight the notable changes between the current capital model criteria and the proposed model. We also discuss major changes from the first RFC and the second RFC, as well as several key items that still require enhanced guidance and clarification. Our analysis is based on information gathered from S&P's public comments, conversations with industry participants, and publications released by S&P Global as of July 2023 when this paper was written. Most U.S. life insurers are rated by S&P using their U.S. Life Statutory Capital model, while other insurers use the GAAP/IFRS Capital Model. Statutory financials will remain the starting point for U.S. life insurers under the proposed model, however there will be additional adjustments made to these numbers in an effort to create consistency and comparability with other accounting and solvency regimes.

Description: The “X” Factor — Are You Ready? by Larry Gorski from The Financial Reporter, June 2000, Issue No. 42.

Description: Embedded Risk in Settlement Options on Older Life and Annuity Contracts

Description: In November 2020 the Life Actuarial (A) Task Force unanimously passed APF 2020-08 which adds a third permissible method in the Valuation Manual to determine company experience mortality rates. This article describes the three methods

Description: Perspectives on the Valuation Manual.

Description: The 2020 edition of the Valuation Manual permits mortality data aggregation thereby enhancing credibility but also has accompanying requirements and addresses calculation of company experience rates.

Description: “X” Factor—Modified Select Factor Adjusted Mortality Rates by Larry M. Gorski from The Financial Reporter, May 1999, Issue No. 39.

Description: As companies implement PBR, this article outlines challenges regarding the treatment of accelerated underwriting under VM-20 and in light of future innovation.

Description: This article is aimed to cover the following: 1) Provides an assessment of income volatility under Long Duration Targeted Improvements (LDTI) for several key types of long duration contracts along with select illustrations, and compares against those under current GAAP, 2) Discuss areas where accounting policies or methodologies can influence income volatility, and 3) Show how a company's management reporting can be adapted to help explain income variances under LDTI.

Description: Federal Tax Issues Under the 2001 CSO Mortality Tables