Thursday, March 25, 2010

Treasury Department Issues Guidance on Actuarial Guideline 43

The U.S. Treasury Department has released guidance on Actuarial Guideline 43 which addresses reserving for variable annuities.

The guidance, Notice 2010-29, will offer interim guidance until it is determined whether a new principles-based approach to reserving is finalized and put in place in the states and, if so, what that final product will look like.

Among the provisions in the guidance is a point stating that the standard scenario amount determined under AG 43 will be treated as a life insurance reserve for federal income tax purposes if the requirements of the guideline, including the account value return assumptions are met.

The American Council of Life Insurers and the American Academy of Actuaries, both in Washington, are still reviewing the just released guidance.

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