Description: Asset cash flow modeling and asset assumptions are growing in importance with PBR especially considering the low interest rate environment. The Academy’s Life Practice Council and Life Valuation Committee have formed a Low Interest Rate Asset Adequacy Testing Task Force which has conducted an industry survey to raise awareness and summarize the actuarial best practices for financial reporting actuaries practicing in today’s very low interest rate environment. As the scrutiny on the asset side ratchets up, actuaries must consider how best to develop the asset assumptions as well as model the reinvestment and disinvestment strategies. Coherent assumptions and modeling practices across modeling exercises are expected while respecting the purpose of each calculation.

Description: Future mortality improvement is an important assumption in the valuation of life insurance and annuities. In this session, presenters will discuss the work of the Mortality Improvement subgroup of the American Academy of Actuaries’ Life Experience Committee and the Society of Actuaries’ Preferred Mortality Oversight Group Valuation Basic Table Team in developing mortality improvement scales for AG-38 and VM-20. In addition, two recent SOA efforts on mortality improvement will be examined. Research on developing a broader framework for modeling mortality improvement assumptions is being developed to enable U.S. actuaries additional ways to follow a consistent approach across a variety of actuarial practice applications. Results from a study on U.S. population mortality by socioeconomic category and how it fits into the broader consistent framework will be presented. Additionally, results of a survey on mortality improvement practices of life insurance companies and reinsurers in Canada and the U.S. will be shared.

Description: As the portion of inforce business valued under PBR grows, it becomes increasingly important to not only calculate reserves for point-in-time valuation but to also project reserves. This is especially critical for actuarial functions such as pricing, business strategy/forecasting, and asset adequacy testing. In this session, we will review PBR projection techniques based on work completed by the American Academy of Actuaries when developing the PBA Projection Practice Note. In addition, this session will examine specific challenges that can arise when actuaries use models to project reserves at future dates. Topics covered include mortality improvement, credibility, scenario generation, starting asset projections, and various other technical issues related to nested modeling requiring both inner and outer loop projections.

Description: After 23 years, the new guidelines for insurance contracts have been released, which describe life insurance economic behavior and show its operating results in an unprecedented and complex accounting language. The management of the insurance industry, as well as accounting and actuarial professionals, will face new challenges. This speech started from the basic logic of accounting and the framework of the standards, combined with the insurance industry's operating rules and accounting characteristics, to illustrate the orientation of the new insurance contract standards. From the internal and external perspectives of life insurance operation, this paper used common management language to discuss the understanding of the new insurance contract standards, the focus issues of the industry and the key issue of the effective implementation of the new standards -- the deep integration of accounting and actuarial.

Description: While our ability to access and analyze large quantities of data is better than ever, many long-term products suffer from sparse data in critical risk areas, such as deep in-the-money lapse experience and long-term utilization rates for income guarantees. The presenters will explore industry-level annuity experience data for these types of situations, and discuss quantitative approaches to addressing them in pricing and other applications.

Description: This session will review limited fluctuation credibility, and how to apply that approach to a GLM. Alternative credibility approaches through the lens of ASOP 25 will also be discussed.

Description: This 2008 supplement addresses the issues that have arisen in life insurance tax laws related to IRC 7702 and 7702A since the book was published in 2004. It also enhances and clarifies issues that were addressed in the text, adding detail and further discussion.

Description: These are presentation slides to supplement, Mortality Under Standard Individuality Life Insurance Between 1999–2002 Anniversaries from ARCH, January 2006.

Description: One important lesson learnt from the recent financial crisis was that overreliance on financial models could lead to unforeseen and harmful consequences. Model risk management (MRM) is becoming a core and mandatory component in enterprise risk management for many financial institutions, especially Fed/OCC CCAR-compliant firms. In recent years, insurance companies are also being required to have model risk management programs by Solvency II, ORSA and other supervisory guidance. MRM is not just model validation. It consists of governance and policies regarding a model's life cycle including data, model development, model test and implementation, model validation, model monitoring and documentation. It also provides guidelines and standards for risk assessment and model inventory management. The presenters will discuss current and best practice MRM, approach for model validation and auditing, as well as topics for technical issues such as types of model risks. It will also discuss the differences between Fed/OCC standards and Solvency II standards. At the conclusion of the session, attendees will be able to: Describe best practice in model risk management; Explain requirements and standards; and Develop model validation procedure.

Description: Due to the development of mobile internet, Chinese insurers now have a variety of valuable ways to collect and use customers' health data.The speaker will share his experience in heath data application in the following fields:Using data to customize health information and suggestion for customers;Using data to stimulate customers' needs for insurance products; and Using data to provide tailor-made products and services