LIFE PRACTICE COUNCIL UPDATES
Third PBR Boot Camp
The Life Practice Council hosted its third PBR Boot Camp in Orlando, Fla., May 22–24, which featured 18 dynamic, interactive sessions. The 105 attendees received targeted instruction and also participated in intensive, focused discussion groups, which provided an opportunity to share insights and learn from others’ experience following January’s PBR implementation.
Comments on PBR ASOP Exposure Draft
The PBR Governance Work Group submitted comments in May to the Actuarial Standards Board (ASB) on the exposure draft for a new ASOP, Principle-Based Reserves for Life Products.
PBR Under VM-20 Practice Note
The Life Principle-Based Approach Practice Note Work Group released the practice note, Life Principle-Based Reserves Under VM-20, in May to assist actuaries with the implementation of the PBR valuation approach adopted by the NAIC as detailed in the Requirements for Principle-Based Reserves for Life Products—VM-20.
APF on VM-20 Language on Policy Loans and Separate Account Assets
The Life Reserves Work Group submitted an amendment proposal form in May to LATF regarding the VM-20 wording on modeling of policy loans and separate account assets.
Comments on VM-20
The Life Reserves Work Group submitted comments in May on two LATF proposed amendments to VM-20—a comment letter related to additional definitions and another comment letter related to proposed changes to Section 2G.
Model Governance Practice Note
The PBR Model Governance Practice Note Work Group released a new practice note in April to provide additional information for practicing life actuaries seeking to better understand models, model risks, model governance, and related issues, as they implement PBR.
Simplified Issue, Guaranteed Issue, and Accelerated Underwriting Presentation
Mary Bahna-Nolan, chairperson of the Academy’s Life Experience Committee and SOA Preferred Mortality Oversight Group, presented updates to LATF in April on its work on guaranteed issue and preneed mortality tables, and simplified issue and accelerated underwriting mortality under VM-20.
Report on Guaranteed Issue Mortality Tables
The Life Experience Committee and SOA’s Guaranteed Issue/Simplified Issue/Preneed Working Group gave a report to LATF in April on 2017 guaranteed issue mortality tables, including spreadsheets with a blended mortality table, a male mortality table, and a female mortality table.
The Life Practice Council held post-NAIC webinars in April and January to give updates on the NAIC’s Spring 2017 and Fall 2016 national meetings that focused on LATF activities, and actions by other groups regarding PBR and other life topics.
Academy Launches ‘PBR in Practice” Resource
The Academy in January launched “PBR in Practice,” a web page that assembles materials to assist actuaries and regulators as actuaries in most states move into the implementation phase of PBR for life insurance.
NAIC MEETING ACTIVITY
At the NAIC’s 2017 Spring meeting, LATF adopted:
VM-22 Subgroup Report (pgs.111-136) that provides the methodology for determining valuation interest rates for income annuities.
Four amendments (pages 164-174) for non-substantive changes to the VM, including moving the tables from VM-20 Appendix 2 to the Related Documents tab on the task force web page.
A bill was introduced in the New York Senate in May that would enable life insurers to employ the VM for PBR, and similar legislation was pending in Massachusetts. In March, the governor of Wyoming signed legislation that allows insurers to start using the VM.
To date, 47 states representing more than 87 percent of U.S. direct written premiums have adopted a new Standard Valuation Law (SVL) to enact PBR. This exceeds the threshold of 42 states and territories with 75 percent of written premium set by the NAIC for implementation of the VM, and life insurers in most states can start utilizing PBR on Jan. 1, 2017.
States Not Yet Adopting New SVL (percent of direct written premium as of June 20, 2017)
*Percentage of U.S. life underwriting
PBR Boot Camp for Regulators
The Life Practice Council is planning a regulator-only PBR Boot Camp in Las Vegas on Sept. 11–13. More details will be available shortly on the Academy’s website.