For over four years now, and 15 post NAIC conference calls hosted by the American Academy of Actuaries, Washington, the discussion has centered around the development of principles-based reserving and how PBR will fit into the development of international solvency and accounting standards that are currently being developed.
The pieces are starting to come together.
During the 15th AAA update Donna Claire spoke of exciting news and was followed by Larry Bruning, chief actuary with the Kansas insurance department and a co-chair of the Life & Health Actuarial Task Force. Bruning detailed the advancement of the revised Standard Valuation Law during the summer meeting of the National Association of Insurance Commissioners’ in Minneapolis last month.
Bruning also updated Academy members about how the NAIC is reorganizing its work under a Solvency Modernization Task Force that will bring PBR as well as regulatory work on international accounting and solvency standards under its purview.
Can you see a picture yet?
Well, those speaking on the call say that while there is a great deal of work that still needs to be done, there is at least an outline.
Here are some of the takeaways.
• On July 28, the exposed SVL is up for adoption by LHATF’s parent, the Life & Annuities “A” Committee.
• Work will begin at LHATF’s fixed annuities subgroup to add to Section 22 of the Valuation Manual which deals with these products.
• Mike Bohner, a life actuary with the Texas discussed how pieces of the Valuation Manual including VM-0, are being worked on for a scheduled Jan. 1, 2012 implementation date.
• One of the hot topics of discussion this summer will be the PBR discount rate for reserves associated with VM-20, another section of the Valuation Manual.
• Phil Barlow, a District of Columbia regulator and chair of the Life RBC working group discussed the C3-Phase III project and how the group is estimating that work will be done by year-end so that it can become effective in 2010.
• The next project, Barlow says, will be C-3, Phase IV, which will update C-3, Phases I and II so that they are consistent for all annuities. That may be achieved by updating Phase III for all annuities. Phase IV is scheduled to be in place for 2010 or later and 2011 at the earliest.
• Nancy Bennett, a fellow with the Academy, rounded out the discussion by detailing how events including international accounting and solvency work, the plan of President Barack Obama to overhaul the financial services industry and other regulatory work may be moving regulation toward a more seamless, international system of oversight.