Life Practice Council highlights

The Life Practice Council:

• Supported the National Association of Insurance Commissioners (NAIC) adoption of the revised standard valuation law that enables principle-based reserving to be adopted by the states, contingent on the completion of the accompanying valuation manual. The council has provided extensive input to NAIC groups over the past several years throughout the revision process.
  
• Continued its work on the principle-based approach (PBA) effort by, among other efforts, submitting amendments to the NAIC valuation manual, making presentations on the treatment of asset default costs and net spreads, revising the C3 Phase III risk-based capital proposal in response to feedback from the NAIC and interested parties, and proposing a framework for corporate governance under a principle-based system.
  
• Presented several reports, in partnership with the Society of Actuaries (SOA), to the NAIC on the potential development of a 2008 commissioners standard ordinary mortality table, provided updates on the development of a preferred mortality table, and gave input on both the 2008 valuation basic table and payout annuities. The council also jointly sponsored two seminars and a webcast on PBA topics with the SOA.
  
• Submitted comments to the NAIC on an American Council of Life Insurers proposal for annuity illustration model guidelines.
  
• Presented a “PBA 101” educational session for regulators at the fall NAIC meeting, and presented educational sessions on PBA topics including quarterly webcasts, as well as presentations at meetings of the National Conference of Insurance Legislators and the NAIC.
  
• Published three new practice notes covering topics that included fair value accounting for Financial Accounting Standard Nos. 157 and 159, the calculation of embedded values for life insurance companies, the application of Actuarial Guideline 43 and C3 Phase II for risk-based capital calculations. The council also updated a practice note on compliance with Actuarial Standard of Practice No. 24 and the NAIC’s life illustrations model regulation.
  
• Submitted a letter to the Internal Revenue Service identifying several actuarial issues and concerns with a notice proposing changes to the tax treatment of life insurance contracts that mature after age 100.
  
  

Life Practice Council resources

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