Description: ASU 2018-12 introduced a new concept called “market risk benefits” (MRBs). MRBs are a new accounting classification for benefits within deposit contracts, offering protection from “other than nominal market risk.” This applies to products with account values, including variable and indexed annuities with guaranteed living or death benefits attached (aka GMxBs). ASU 2018-12 Section 944-40-30-19D mentions both a non-option and an option-based valuation approach to account for MRBs. This article considers the option-based approach. The purpose is to highlight weaknesses in the current application of the option approach to MRBs, propose an alternative method, and consider the benefits of the new approach. The intent of this article is to persuade practictioners / actuaries / accountants that this is a better approach for applying the fair value option method to market risk benefits.

Description: In the world of digital excitement, Blockchain is the newest kid on the technology block. Pull up any search engine, punch in “Blockchain” and find yourself inundated with articles praising improvements over current centralized network systems that many insurers use. But is this praise warranted, and does Blockchain truly cure all ails? In this article, we pose commonly asked questions as well as provide answers from the perspective of an insurance company.

Description: Feature article discussing how leveraging intelligent automation can help financial services firms to automate processes, increase efficiency and consistency, and allow existing human labor to focus on more strategic activities while also improving customer experiences.

Description: Many retirement actuaries have experience developing, implementing, and monitoring Liability Driven Investing (LDI) strategies for plan sponsors. These strategies typically involve modifying a plan’s investment strategy to remove a significant portion of the investment and interest rate risk now or at some point in the future when specific triggers are met. The tactics often involve the use of fixed income assets to cash flow and/or duration match the liabilities. In the spirit of helping actuaries expand their roles in an evolving defined contribution world, this article explores the application of LDI and derisking strategies within defined contribution and individual retirement accounts. The economic theory behind this approach is called the lifecycle hypothesis, or lifecycle finance. The benefits of the lifecycle finance method are that it provides a safe approach to save for retirement and a secure source of floor income during retirement. Similar to pension plans, each individual has his or her own idiosyncratic needs, wants, and risks that should be considered. Actuaries are uniquely situated to help defined contribution plan sponsors, individuals, and even themselves implement the lifecycle finance approach by developing and distributing tools and methods that focus on income (rather than wealth), LDI strategies, and personalization.

Description: Discussion and Opinion on how randomness affects measurement of provider contracting risk-sharing agreements

Description: A list of the lessons the author learned through his own failure(s). The intent is to help readers avoid making the same mistakes and reflect on how far they've come.

Description: Setting the X Factor Percentile— Commentary by G. Thomas Mitchell from The Financial Reporter, October 1999, Issue No. 40.

Description: Describes Web 2.0 and discusses its benefits.

Description: Column from the Technology Section chair discussing technological advances since the early ‘90s.

Description: MG-ALFA software receives award for The Technical and High Performance Computing Innovation Partner of the Year Award. Microsoft wanted to recognize a partner that innovated by enabling simulation and modeling in the cloud, using windows HPC Server burst capability.