Risk-based capital:
Life insurance and fixed annuities
The Academy’s principle-based initiative is divided into three areas on the capital requirements side: life insurance, variable annuities, and fixed annuities. Use this page to stay up to date on the life insurance and fixed annuity RBC efforts.
Life insurance
The Academy’s C3 Phase 3 Life Capital Work Group (LCWG) plans to evaluate the interest-rate and market risk (C3) component of the current formula-based life RBC framework, in the context of life products valued under a principle-based reserving approach. The LCWG will work with the Academy’s Life Reserve Work Group and will recommend changes to the life RBC formula, as needed.
More info
Fixed annuities
A new Academy group, the C3 Phase 3 Annuity Capital Work Group (ACWG), has several projects in the works.
The ACWG plans to examine the consistency of regulatory capital requirements for equity-indexed annuities (EIAs), fixed deferred annuities, and payout annuities. It will also review the consistency between the C3 Phase I interest-rate generator and other scenario generators that the Life Capital Adequacy Subcommittee (LCAS) has developed or is developing, as well as the consistency between C3 Phase I weighted percentile methodology and C3 Phase II conditional tail expectation methodology. The work group will also consider the need to continue or modify the formula-based minimum and maximum feature in C-3 Phase 1 methodology.
The work group was created by the Life Capital Adequacy Subcommittee.
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