1980s – Actuarial – Snippets

  • Whenever you are working on something new and innovating, it is always a good idea to look back and see what the ancients called it.

—  Charles W. McMahon

1980 – SOA – Product Innovation – Response to Consumer Needs in the 1980’s, Society of Actuaries – 14p

  • The challenge we face as actuaries is to lead the industry into the 1980s developing the products to pass along the investment success  . . and likewise, the investment failure, to develop the systems to support them and to work with and I must emphasize work with the state and Federal regulators to develop the environment to govern them.

—  Denise F. Roeder

1980 – SOA – Non-Participating Life Products with Non-Guaranteed Premiums, Society of Actuaries – 22p

  • Some of our problems, however, have been caused by regulatory bodies. 

—  Barbara J. Lautzenheiser

1981 – SOA – The Life Insurance Business — The View of Consumerists, (rsa81v7n38) – Daniel F. Case – Moderator, Society of Actuaries – 18p

  • 1981 0602 – Journal – AAA – American Academy of Actuaries – Statement 1981-12 – p144-155 – 12p
    • LIBG – Life Insurance Buyer’s Guide – NAIC
  • Suggested language which should accompany the illustration, must necessarily be brief.
  • We believe, however, that in all cases there should be an identification of the method of investment income allocation used, because of the significantly different illustrative result, in addition, each required exception statement that appears in the suggested Schedule ii would also need to be briefly summarized.”

1981 – Journal, American Academy of Actuaries – 382p

  • Maybe he is not getting all the disclosure he needs, as far as the continuing benefit is concerned, when the interest rates change from that illustrated. 

—  Gary P. Monnin, Senior Vice President, Chief Actuary of American Founders Life Insurance Company

1982 – SOA – Universal Life (rsa82v8n111), Society of Actuaries – 14p

  • Future developments are foreseen to include a switching from traditional life insurance to universal life…  (p5)

1982 07 – AAA – (EAR) – Enrolled Actuaries Report – <Actuarial – WishList>

  • 1984 1212 – AAA – The NAIC And The Actuarial Profession – Attachment Three – American Academy Of Actuaries
    • Statement of Stephen G. Kellison, Executive Director Of The American Academy Of Actuaries To The NAIC Technical Services Ex5 Subcommittee
    • The purpose of this statement is to speak in favor of establishment of a more organized coordination between the NAIC and the actuarial profession.
    • The American Academy of Actuaries is the public interface organization for the actuarial profession in the U.S. and includes actuaries in all areas of specialization within its membership.
    • The balance of this statement discusses ways of achieving stronger liaison.

1985-1B, NAIC Proceedings

  • The Academy views its role in the government relations arena as providing information and actuarial analysis to public policy decision makers so that policy decisions can be made with informed judgment.
  • For example, the determination of required contribution levels to plans to provide benefits and the setting of appropriate reserve levels to meet future obligations are actuarial in nature.

1984 – Journal – American Academy of Actuaries

  • Broken down to its simplest basis, universal life has eliminated the concept of “plan of insurance“, and, through the computer, coverage has been unbundled into “protection” and “savings” elements. 

 —  Christian J. Desrochers

1983 – SOA – Universal Life (RSA83V9N212), Society of Actuaries – 24p

  • Life insurance, because it is a nontangible product, is extremely susceptible to being perceived as whatever people think it to be.

—  Larry Silkes


1983 – SOA – Universal Life Valuation and NonForfeiture: A Generalized Model, by Shane A. Chalke and Michael Davlin, Society of Actuaries – 72p
  • The “unbundling” of services and other product differences between Universal Life and Ordinary Life cause current literature to be inapplicable, as well as insufficient, for Universal Life. 

1984 – Journal – AAA – American Academy of Actuaries – 271p 

  • The Academy views its role in the government relations arena as providing information and actuarial analysis to public policy decision makers so that policy decisions can be made with informed judgment.
  • For example, the determination of required contribution levels to plans to provide benefits and the setting of appropriate reserve levels to meet future obligations are actuarial in nature.

1984 – AAA – Journal, American Academy of Actuaries

  • In our Universal Life products, we need to find that critical point, or what is as important, what is the best level of premium relative to the target premium.
    • You don’t want all target premiums.
    • In fact, the lower the premium is, the closer to the minimum premium, the happier we are.
    • How do we communicate that to our agency people?

—  Richard Schwartz, product marketing function for the agency distribution systems for the Sun Life Group of America

1986 – SOA – Organizing the Product Development Function, rsa86v12n216 – Society of Actuaries – 46p

  • Finally, I just would like to make a small pitch for the “mystique” of whole life.
    • If we come up with a retrospective approach for nonforfeiture, then we are hastening the viewpoint that life insurance, no matter what kind is nothing more than term insurance plus a side fund.
  • I think the industry has some vested interest yet in keeping the impression that there is more to it than that.
    • It is not just term insurance plus a side fund.
  • If it is strictly term insurance plus a side fund, then we weaken our arguments for favorable tax and regulatory treatment.

—  Douglas Doll

1989 – SOA – Status Report on Standard Nonforfeiture Law Revisions, Society of Actuaries – 14p

  • LIFE COMMITTEE OF THE IASB
  • The function of the Committee is to develop actuarial standards of practice in the life insurance area.
  • In accordance with procedures prescribed by the Interim Actuarial Standards Board, this Committee is responsible for the development of Recommendations and Interpretations (To be announced)
  • Subcommittee on Dividends and Other Non-Guaranteed Elements

—  William T. Tozer, Senior Vice President, 1966 – Product Risk Management, Kentucky Central Life

1986 – AAA – American Academy of Actuaries Yearbook – 406p

  • Date: 1986 1030
  • To: Commissioner Fox
  • From: AAA – American Academy of Actuaries
  • RE: NAIC Model Life Insurance Cost Disclosure Regulation – Recommended Changes to the NAIC Model Life Insurance Disclosure Regulation – Attachment Two 
  • Products that contain non-guarantee charges, benefits or premiums have become a very significant portion of today’s life insurance market.
    • Universal life insurance is only one example of such a product.
    • Various insurance departments and members of the American Academy of Actuaries have expressed concerns about sales disclosures used with non-guarantee element products.
    • As a result, the Academy appointed a task force on nonguarantee elements.
    • This task force recommends that the NAIC Life Insurance Disclosure Model Regulation be amended to incorporate the enclosed changes.
    • At the time the latest revision was made in the Life Insurance Disclosure Model Regulation, generally accepted actuarial standards had not been established for dividends paid by stock life insurance companies.
    • As a result the revisions apply only to mutual life insurance companies.
    • Generally accepted actuarial practices have now been developed for dividends paid by stock life insurance companies.
      • As a result we recommend that any references to mutual life insurance companies in a model regulation be eliminated.
  • If the task force can be of any assistance to you, please let me know.

—  Yours truly, William T. Tozer, Chairman – Task Force on Non-Guarantee Elements, American Academy of Actuaries

1987-2, NAIC Proceedings 

  • With this product, the mechanic is “unbundled” and open.
  • But events that are now observable may be misinterpreted.
    • [Bonk: “this product” = Universal Life

—  Douglas Doll

1988-2, NAIC Proceedings

  • The Task Force also believes that manipulative patterns of COl deductions will be weeded out by their GMP test.
  • Examples have been given to the regulators that a whole life product filed in their state today that offered cash values that were equal to 1941 CSO 2.5% values would probably be approved, as long as the paid-up values were on the more current non-forfeiture basis, but a similar UL product would not be approved.

—  Philip K. Polkinghorn

1988 – SOA – Update on Universal Life Reserves and Non-Forfeiture Values, Society of Actuaries – 36p

  • 1989-1, NAIC Proceedings – Society of Actuaries – Task Force on Nonforfeiture Principles Interim Report-Tentative Conclusions (p612-?)
    • Unlike adjustable life, where a current plan is defined, but is subject to change, a universal life policy at any time has only a “minimum” and a “maximum” plan….  (p662)
  • Finally, I just would like to make a small pitch for the “mystique” of whole life.
    • If we come up with a retrospective approach for nonforfeiture, then we are hastening the viewpoint that life insurance, no matter what kind is nothing more than term insurance plus a side fund.
  • I think the industry has some vested interest yet in keeping the impression that there is more to it than that.
    • It is not just term insurance plus a side fund.
  • If it is strictly term insurance plus a side fund, then we weaken our arguments for favorable tax and regulatory treatment.

—  Douglas Doll

1989 – SOA – Status Report on Standard Nonforfeiture Law Revisions, rsa89v15n223 – Society of Actuaries – 14p

  • The foundations of actuarial science are not so esoteric or so abstruse that the average well-informed business person has great difficulty in understanding them.
    • There are, however, points at which the actuarial view and that of the general public can come into conflict.
  • Actuaries will do well to recognize where these potential trouble spots are, and to do what they can to resolve misunderstandings. (p78)

1989 – SOA – Book – Fundamental Concepts of Actuarial Science, Society of Actuaries, by Charles L. Trowbridge – 90p