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

  • 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
  • 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 

  • 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

  • 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 - Fundamental Concepts of Actuarial Science, Society of Actuaries, by Charles L. Trowbridge

  • 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