Description: Thoughts on the future of financial reporting.

Description: Businesses across the board have been drastically impacted by the effects of COVID-19 over the course of 2020, and insurance was not immune. Perhaps most relevant to this industry’s current capital and liquidity concern is the prevailing low interest rate environment. This has been a global trend in the last decade, and treasury rates in much of the developed world are at or near zero. Reduced investment returns limit an insurer’s ability to achieve their desired return on equity, eliminating previously profitable strategies that depended on the leverage of life and annuity balance sheets. Focus and activity have instead shifted to other methods to counteract the low interest rate markets and accompanying capital strain. Examples include increased mergers and acquisitions (M&A) activity within the insurance industry and an increasing focus by private equity firms in the insurance market for asset-intensive products, both of which reflect the goal of increasing yield rates on capital.

Description: In 2014 several aspects of the ACA are driving the need for valuation actuaries to consider establishing payables or receivables during 2014 or at year-end. These programs include the 3Rs (risk adjustment, reinsurance and risk corridors) on insurers’ financial statements. As each of these programs includes a retrospective settlement process, financial statements may need to include estimates of amounts payable or receivable. The health insurance providers (HIP) fee and cost-sharing reductions (CSRs) and their potential impacts on insurer financial statements also need to be considered. The Society of Actuaries Health Section Council and Financial Reporting Section Council jointly developed a survey to gauge how actuaries are progressing with respect to these new potential assets or liabilities. The survey was sent to the members of the Health Section and the Financial Reporting Section. This article summarizes the results of that survey.

Description: Feature article discussing the current International Accounting Standards Board IASB Exposure Draft ED. A model of 10 year level term life insurance is use to demonstrate the amortization of residual margin. Residual margin is to be set at issue as the amount which offsets any gain at issue that would otherwise be recorded after accounting for fulfillment cash flowd and an explicit risk adjustment.

Description: The article summarizes implications of rising interest rates on U.S. GAAP and statutory financial reporting for life insurers, highlighting potential tailwinds from steady increases and headwinds from sharp increases. We further provide insights into how insurers can leverage ALM programs and interest rate risk hedging practices to favorably position themselves in a rising rate environment

Description: Federal Tax Issues Under the 2001 CSO Mortality Tables

Description: This article focuses on the market risk benefit (MRB) measurement model and will examine a generic guaranteed minimum death benefit (GMDB) in the context of LDTI and its impact from both the ceding entity and the reinsurer standpoints.

Description: Observations of the meeting in Orlando of the 2017 Living to 100 Symposium, including summaries of the remarks by the guest speakers.

Description: A methodology for calculating risk margins related to policyholder behavior risks for guaranteed living benefits on variable annuities when measuring fair value under FAS 157.

Description: This article highlights some key implications for PAA and Related Disclosure Requirements under IFRS 17.