Continued to work with the National Association of Insurance Commissioners (NAIC) to advance the principles-based initiative for reserves and risk-based capital (RBC). Top projects included recommending language for a proposed valuation manual to support life and annuity reserve proposals, and for a draft of Actuarial Guideline VACARVM, as well as developing proposals for life and annuity RBC requirements and formulating economic scenarios that can be used in determining principles-based reserves and RBC.
Advised the NAIC on potential proposals to revise the standard nonforfeiture law.
Reported to the NAIC on developing a long-term RBC solution for hybrid securities.
Drafted an update for the NAIC on statutory reserves for group life premium waiver benefits.
Undertook development of proposed preferred mortality tables, in partnership with the SOA.
Submitted reports and testified before the NAIC on the actuarial appropriateness of travel underwriting.
Developed practice notes on applying FAS 133 to variable annuities with guaranteed benefits, C3 Phase 2 RBC and AICPA SOP 05-1, and updated the practice note on Regulation XXX.
Formed numerous new work groups to undertake projects concerning discount rates, governance, group life tables, principles-based valuation, modeling efficiency, and pre-need mortality.
Accomplished all of this by utilizing the skills of more than 100 volunteers who put in thousands of hours on various projects.
— See recent Academy publications, analyses, and comments on public policy life issues, including Academy life reports to the NAIC.
Risk Management/Financial Reporting Council
highlights
The Risk Management and Financial Reporting Council:
In conjunction with the Actuarial Standards Board, responded to a Financial Accounting Board (FASB) invitation to comment on whether there is a need for valuation guidance specifically for financial reporting and how such a need might be filled.
Participated in a FASB roundtable discussion on the need for valuation guidance for financial reporting.
Commented to the International Association of Insurance Supervisors (IAIS) on its final exposure draft of a paper on a common structure for assessing insurer solvency.
Commented to the International Actuarial Association (IAA) on its exposure draft, Measurement of Liabilities for Insurance Contracts: Current Estimates and Risk Margins.
Met with the American Institute of Certified Public Accountant Insurance Experts Panel to discuss business combinations, Financial Accounting Standards 157 and 159, risk transfer in casualty reinsurance, valuation guidance, the IAA risk margin paper, restrictions on actuarial reports, and the International Accounting Standards Board (IASB) insurance contracts discussion paper.
Met with staff from the Securities and Exchange Commission’s (SEC) Office of the Chief Accountant to discuss convergence between U.S. Generally Accepted Accounting Principles (GAAP) and International financial reporting standards, property/casualty claim reserve disclosures, and pension accounting issues.
Commented to the IAIS on its paper on capital requirements and enterprise risk management for capital and solvency purposes.
Commented to the IAIS on its paper about insurers' use of internal models.
Commented to the SEC on its proposal to reconcile GAAP and international financial reporting Standards.
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