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Principles-based reserving: Variable annuities

The Academy’s Variable Annuity Reserve Work Group (VARWG) is working with the NAIC’s Life and Health Actuarial Task Force to develop proposed Actuarial Guideline VACARVM, or AG VACARVM (Commissioners Annuity Reserve Valuation Method for Variable Annuities Redefined). The proposed AG VACARVM interprets reserve valuation standards for variable annuities and other products offering guaranteed benefits. Its principles-based approach is similar to the one used in C-3 Phase II to determine risk-based capital for those products.

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