Description: Income i.e., immediate annuities are insurance products that benefit from mortality pooling, so they can generate the highest level of lifetime “income now” per dollar of retirement assets put to work. Including an income annuity as a portion of a retirement portfolio often results in an immediate increase in the level of income generated by that portfolio while at the same time ensuring that a portion of the total income is payable for a lifetime.

Description: This article is to outline the new requirements for valuation rates in VM-22, highlighting key differences and example calculations to enhance understanding.

Description: This article describes the attempt to discover a product for the elderly already receiving long term care, which focused on impaired annuities, and finding the appropriate distribution options.

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.

Description: This paper applies the research in Prospect Theory of Kahneman and Tversky to explain why sales of annuities lag sales of life insurance products. The author theorizes that life insurance is easier to sell because customers perceive themselves to be in the domain of losses, while potential annuity customers perceive themselves to be in the domain of gains. Kahneman and Tversky showed us that people are mostly risk averse in the domain of gains and risk seeking in the domain of losses. Purchase of an annuity or life product is a risky investment. Customers will find it easier to take the risk in the life insurance domain of losses than the annuity domain of gains. The author then proposes a hybrid life annuity product that might address both mortality and longevity risk in one product that would allow both products to be more competitive than stand-alone products.

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

Description: Contains two separate articles, called notes. The first note, “A note on correlation in mean variance portfolio theory,” is an elementary discussion of how negative correlation coefficients can be, given any set of N random variables. The second note, “Two essential formulas in actuarial science and financial mathematics,” gives a more or less self-contained introduction to Jensen’s inequality and to another formula, which the author decided to call the “survival function expectation formula.”

Description: Three papers use sophisticated actuarial methods to develop a straightforward retirement income strategy that can be implemented in virtually any IRA or 401(k).

Description: The paper summarizes results from two doctoral dissertations. The first discusses integration of insurance products with investment products to mitigate the risk of outliving one’s assets. The second discusses modeling and pricing for the longevity risk in the secondary market in insurance, including a provision for adverse deviation PAD.

Description: China’s pension system has transformed from traditional retirement system based on command economy to modern pension system based on market economy.