The Academy’s Pension Committee released a new practice note, Valuing Benefits Payable as a Lump Sum. The purpose of the practice note—an exposure draft of which was released last September—is to provide information to actuaries on current and emerging practices in the development of liabilities and cost estimates for pension plans, with benefits paid as a lump sum.
Many pension plans offer benefits in the form of a single, lump-sum payment. In recent years, as plan sponsors have looked to manage risk, lump-sum payments have become more common. The practice note discusses the valuation of lump-sum benefits for financial accounting purposes, and utilizes a number of concepts related to interest theory.
ASB Approves Fourth Exposure Draft of Proposed ASOP on Modeling
Earlier this week, the Actuarial Standards Board (ASB) published its recently approved a fourth exposure draft of a proposed new actuarial standard of practice (ASOP) titled Modeling. The proposed ASOP will provide guidance to actuaries in any practice area when performing actuarial services with respect to designing, developing, selecting, modifying, or using all types of models. The third exposure draft of the proposed ASOP was released in June 2016. The comment deadline is May 15—information on how to submit comments can be found in the draft, which can be viewed here.
Don’t Forget to Order Your Academy Law Manuals
The latest editions of the Life and Health Valuation Law Manual and the Property/Casualty Loss Reserve Law Manual are available for order.
The Life and Health Valuation Law Manual contains a concise summary of the valuation laws (and NAIC regulations) of all 50 states, the District of Columbia, and Puerto Rico. It has been redesigned for 2019, streamlining the contents so users can easily access information. Order today.
The Property/Casualty Loss Reserve Law Manual contains a compilation of insurance laws relating to P/C loss and loss expense reserves for all 50 states, Washington, D.C., and Puerto Rico. Order today.
CMS’ Office of the Actuary released projections of estimated national health expenditures. The projections include estimated expenditures for health care spending from 2018 to 2027 by source of funds (Medicare, Medicaid, and private insurers), types of services, and sponsors (households, businesses, and governments). Read the Academy alert.
Public Policy Activity
The Individual and Small Group Markets Committee and the Risk Sharing Subcommittee sent a comment letter to the Centers for Medicare & Medicaid Services (CMS) on the proposed rule for the 2020 notice of benefit and payment parameters.
The Lifetime Income Risk Joint Committee, Retirement System Assessment and Policy Committee, and Social Security Committee sent a comment letter to the Bipartisan Policy Center (BPC) on the BPC’s 2016 Report of the Commission on Retirement Security and Personal Savings.
The RBC Tax Reform Work Group sent a comment letter to NAIC’s Life Risk-Based Capital (RBC) Working Group on its exposed guidance document on the interpretation of 2018 life RBC results.
The Life Experience Committee sent a comment letter to the Life Actuarial (A) Task Force to address questions that were raised during the NAIC Fall 2018 National Meeting regarding the current process used to develop the Actuarial Guideline 38 and VM-20 annual mortality improvement scale recommendations.
The Life Reserves Work Group submitted a comment letter to the Life Actuarial (A) Task Force regarding exposed amendment proposal form 2019-04, which seeks to provide clarification for expense allowance formulas for universal life with secondary guarantee.
“Making the Right Call: A Discussion of Professionalism Judgment”—March 21, professionalism webinar