Description: In the June 2014 issue of Product Matters, Doug Robbins of Pacific Life authored a fascinating article entitled “Velocity of Diversification.” Therein, he proposed a pricing measure that describes the “…speed at which confidence in profitability is attained”. How can stochastic modeling of mortality be applied to analyze the velocity of diversification, and how would that measure be affected by volatility in the underlying assumptions?

Description: The NAIC approved the 2012 Individual Annuity Reserve table as the standard for computing reserves for individual annuity contracts and developed a model law regulation for states to adopt. On February 17th, 2015, ACLI submitted a letter to Alexis MacIvor, Chief of the Insurance Branch in the IRS Office of Chief Counsel, notifying her that as of December 24, 2014, 26 states had approved the 2012 IAR Table as the reserve standard for immediate annuity contracts issued on or after January 1, 2015. The letter thus confirms that the 2012 IAR Table is the Prevailing Commissioners' Standard Table for purposes of computing life insurance reserves under section 807(d) of the Code for individual annuity contracts.