Regulators – AIG – FCIC

  • YPFS: Since AIG is an insurance company, what was the role of the insurance regulators and their interaction with the Fed during this time?
  • Baxter: Part of the reason some people were not comfortable that the Trust owned 80% of AIG was because the investment could be subject to the jurisdiction of state insurance supervisors.
    • We worked with multiple state insurance supervisors and their national organization, the National Association of Insurance Commissioners (NAIC).
    • From the perspective of a federal supervisor, you are working with a collection of state insurance commissioners with very different financial support and very different capabilities.
    • With that understood, the insurance commissioners have significant political power.
    • That combination is one of the complicating factors for AIG and this became an issue with respect to the Trust.
    • ……………….
    • The insurance commissioners really didn’t help the rescue of AIG, but they didn’t harm it either.

2018 1120 – Lessons Learned Oral History Project Interview: Thomas Baxter – 19p

  • AIG has put together a term sheet for NYSID , which they will be discussing this evening.
  • The term sheet would outline all pieces of liquidity plan, and plans for debt and equity injections, plans for asset sales as well as regulatory forebearance to move assets from subs to parent.
  • NYSID: Dinallo outlined the same plan that AIG gave us earlier — ie move muni’s from P&C subs to parent, and parent send equity in life insurance subs to the P&C subs in return.
  • There are a number of multi-state regulatory hurtles to this, but Dinallo thinks it is possible to do.
  • Dinallo described P&C companies in NY and PA as having very large capital cushions, and so he thinks that they can accommodate this.
  • He also noted negative consequences in insurance markets in general if AIG goes down (ie cost of insurance is likely be much higher if they file) and negative consequencies in muni bond market if GICs default so regulatory forbearance can be justified politically.
  • They are very happy to speak with our experts (Elise and team) tomorrow with more details.
  • My impression is that while they are comfortable with the capital dilution at the P&C companies, they are less knowledgable and comfortable about the equity value of the life companies, so they have work to do on that front.

2008 0913 – FCIC – FRB email (Mosser) – SB-AIG-35651 – 1p

Premium – Regulator – Universal Life

  • Commissioner Hager of the Universal & Other Plans (A) Task Force stated that there appeared to be disclosure problems with universal life plans and that the identification of these items should be placed on the Actuarial Task Force agenda.
  • Some of the items identified which should be disclosed:
    • (2) adequate disclosure of the fact that a premium quoted will not support the contract for the whole life if the policy is a universal life policy;

1988-2, NAIC Proceedings – Universal Life Insurance Model Regulation, Proceeding Citations

  • Roger Strauss (Iowa) said a fundamental issue was that the consumer realize that the premium is being paid from someplace. 
    • He said that was the most important issue to him and if it were to be included in the basic illustration then he would want to show the numbers with an asterisk beside them saying that they were being paid from other than the consumer’s pocket.

 1995-1, NAIC Proceedings

ESG – Economic Scenario Generator

  • Academy’s Economic Scenario Generator Work Group
  • 16. Discussed the ESG Implementation Timeline and Overview of Treasury Model
    • Pat Allison (NAIC) reviewed the implementation timeline for the economic scenario generator (ESG) (Attachment TwentyFive).
    • She noted that the first three milestones have been completed and reminded the audience that the presentation given to the Task Force and the Life Risk-Based Capital (E) Working Group on Oct. 27 is posted on the groups’ web pages

2020 Fall – NAIC – LIFE ACTUARIAL (A) TASK FORCE – 247p

1987 – GOV (House) – Developments In State Insurance Regulation

  • 1987 0701, 0729 and 1014 – GOV (House) – Developments In State Insurance Regulation, James J. Florio (D-NJ)  —  [BonkNote]
    • [PDF-511p-GooglePlay, VIDEO-?]
    • 1987 0701 – General Overview
    • 1987 0729 – Life Insurance Company Solvency
    • 1987 1014 – Financial Guarantee Insurance
    • House – Committee on Energy and Commerce – Subcommittee on Commerce, Consumer Protection, and Competitiveness
  • (p11) – NAIC – John Washburn – Illinois Insurance Commissioner and Vice President of the NAIC
    • (p25) – Market Conduct and Other State Regulatory Mechanisms
      • Additionally, the NAIC is considering amendments to the NAIC Model Rules Governing the Advertising of Life Insurance which will impose new restrictions and disclosure requirements on universal life products and establish standards for marketing and advertising of life and annuity products.
  • (p59) – State of Minnesota, Commissioner of Commerce – Michael A. Hatch  Very frankly, I don’t think that the current situation with regard to the insurance industry works very well, and I think it has to be addressed at a national level, particularly if we perhaps follow some of the schemes, some of the devices that have been used in other areas of regulation, and I refer specifically, for instance, to the banks.
    • After all, as we all know from reading in the newspapers and the complaints from various industries, they are all selling each others’ products today anyway, and as long as everybody calls for a level playing field, there ought to be a level approach as to how they are regulated.
  • (p59) – State of Minnesota, Commissioner of Commerce – Michael A. Hatch
    • Indeed, as Commissioner Corcoran had mentioned with regard to life insurance, I think the issue with regard to the life insurance industry will make the property casualty pale by comparison in the future.
      • It is a much bigger industry, it is selling products not normally associated with the traditional life insurance products, and that is good, there is nothing wrong with that.
      • But it does mean it is a different type of product, and perhaps we ought to borrow from others, for instance bank-related products, security-related products, take a look at the type of regulation that ought to be applied.
  • (p91) – State of Minnesota, Commissioner of Commerce – Michael A. Hatch
    • There is not a whole lot of difference between many of the products sold by the life insurance industry and the bank products. They are very similar, and security products for that matter. Mutual funds, annuities. Bank deposits, et cetera.
    • Depending on what annuity you are talking about or single premium, whole life or whatever, it is a similar product. You have to regulate differently. Between securities and banking you have overlaps. There are overlaps all over the place. 
  • 1988 0729 – Life Insurance Company Solvency
  • (p105) – James Florio (D-NJ) – In recent months it has been suggested to the subcommittee that problems are developing in the life insurance industry as well, problems that could be at least as damaging as the problems we have had in property and casualty insurance.
    • (p105-106) – tendency for some insurance companies to invest heavily in junk bonds.
    • (p106) –  A related concern is that the burden of misguided investment strategies might fall on other insurers and their policy holders.
      • In States that have guarantee funds, solvent insurers have to contribute to the fund to pay claims for an insolvent company. 
    • (106) – These forces have transformed the industry and I am not sure the public perception and understanding has kept pace with these changes. I am hopeful that today’s hearing will begin the process of improving our understanding.
    • (106) – The life insurance industry contributes in a number of ways to important aspects of our economy, providing security to individuals and capital for American businesses.
      • We need to find out whether the ability of the industry to perform any of its functions is in any way jeopardized and whether adequate accountability exists to ensure the public interest continues to be served.
    • (p106) – Millions of Americans have staked their wellbeing on the life insurance industry.
      • If problems exist, we need to ensure that they are addressed, so that the crisis of which some have warned never occurs. 
    • (p108) – What it is that we are trying to do is to understand about the industry, we are trying to understand what the problems are and quite frankly and quite candidly, some of us at least are trying to formulate appropriate responses at the time that I suspect the responses are going to be demanded by the American public.
      • If the current wave of insolvencies continues and if the evidence that has been presented to us that the existing patchwork quilt of guarantee plans that we have around the States is not going to provide appropriate remedies for individuals, then it may be that at some point there will be the need for some type of remedial response and such a response can only be a meaningful one if we understand the fundamentals of the industry and the fundamentals of some of the problems associated with different aspects of the financial services industry, one of which, of course, is the insurance industry.
      • So with our responsibility of gathering facts….

InsureU – NAIC

  • Universal Life Insurance – Includes guaranteed annual cash value growth but no investment flexibility.

insureuonline.org/insureu_type_life.htm – <Bad Link>

  • Insure U offers unbiased and trusted consumer resources from the NAIC.
  • The program’s robust website provides consumers with helpful tips and information about insurance-and because individual coverage needs vary, materials are provided for various life situations.
  • The site also features quizzes and public service announcements to help consumers Get Smart About Insurance.

2011 1207 – NAIC/FIO Meeting on Market Conduct – (Documents shared with FIO to facilitate discussion are attached) – 83p

  • insureuonline.org/insureu_type_life.htm – <Bad Link>
  • Life Insurance: It’s more than a death benefit
  • Permanent Life Insurance Options
  • Unlike term insurance, all permanent policies remain in place as long as the premium is paid.
  • They also all have a cash value component that increases over time and allows the owner to borrow against that cash value.
  • There are four types of permanent life insurance:
    1. Whole Life Insurance
      • Offers a fixed premium for the duration of the policy, guaranteed annual cash value growth and a guaranteed death benefit.
      • Does not provide investment flexibility and, once established, you are not allowed to change the policy coverage.
    2. Universal Life Insurance
      • Allows the policyholder to determine the amount and timing of premium payments (within certain limits) and to adjust coverage levels as needs change.
      • Includes guaranteed annual cash value growth but no investment flexibility.
    3. Variable Life Insurance
      • Allows allocation of investment funds across stocks, bonds or money market accounts with different levels of risk and growth potential.
      • A minimum cash value is not guaranteed because of market fluctuation, and coverage amounts cannot be changed.
      • Exposes the policyholder to greater market risk, but has the potential for greater long term returns compared to whole or universal life insurance policies.
    4. Variable Universal Life Insurance
      • Combination of variable and universal life insurance.
      • Offers the most flexibility (compared to other permanent life insurance options) with the ability to vary premium payments, investments and coverage amounts.
      • Allows investment in a variety of market products chosen by the policyholder, and may allow policyholders to make tax-free transfers among investments.
      • Exposes the policyholder to greater market risk than whole or universal life policies.
  • 138. Some supervisors publish conduct-related information that can help to mitigate risks to consumers.
    • Example from the United States: Consumer Information and Education
  • The National Association of Insurance Commissioners (NAIC) provides a variety of public information useful for consumers.
  • Information and tools that U.S. state insurance supervisors have found helpful to make available to consumers include:
    • the NAIC’s Consumer Information Source (CIS) which provides key information about insurers consumers can use (for example, before purchasing insurance), including closed insurance complaints, licensing information and key financial data.
    • INSURE U – Get Smart About Insurance, which is a public education program created to assist consumers with information about insurance issues. INSURE U is designed to help insurance consumers as their lives and needs change, and to educate them about how to avoid being scammed.
      • Since its 2006 launch, INSURE U has featured public service announcements (PSA), consumer alerts, news releases, mobile apps along with integrated social media campaigns, in order to help consumers understand difficult topics.  (p31)

2015 0617 – IAIS (Draft) – ISSUES PAPER ON CONDUCT OF BUSINESS RISK AND ITS MANAGEMENT

Consumer Information Source (CIS) – NAIC

  • 5. Receive Brief Update on Consumer Information Source (CIS)
    • Suggested Wording Mr. Lisson said regulators from Colorado, New York and North Carolina and Dr. Brenda Cude are currently working on recommendations for simplification of the wording on the NAIC Consumer Information Source (CIS) Web page.
    • He added that the recommendations will also include revisions to some of the statistics and how they are calculated. He said a draft document is currently circulating among the individuals working on this issue.
    • Ms. Baker said her concern is that the language used on the CIS Web page does not match the content of the market analysis-related sections of the Market Regulation Handbook.
    • Mr. Belo said this issue is not yet final and will continue to be analyzed by the individuals charged with this project.

2009-3, NAIC Proc.

  • The state insurance regulators also have launched an interactive tool to allow consumers to research company complaint and financial data using the NAIC Web site.
  • Called the Consumer Information Source, this web-based tool allows consumers to file a complaint, report suspected fraud and access key financial and market regulatory information about insurers.
  • NAIC Consumer Information Source (CIS) provides information about insurance companies consumers can use before purchasing insurance.
  • Through the CIS consumers can access information about insurance companies, including closed insurance complaints, licensing information and key financial data. (p9)

2011 1207 – NAIC/FIO Meeting on Market Conduct – (Documents shared with FIO to facilitate discussion are attached) – 83p

American Academy of Actuaries (AAA) to NAIC – IUL

  • 2014-1, NAIC Proc.
    • Patricia Matson (Academy) …said the Academy Life Committee is monitoring the indexed universal life (IUL) illustration discussions in order to modify the current ASOP or adopt new ASOPs as needed.
  • 2015 0811 – AAA to NAIC (IULSG) – paper for the National Association of Insurance Commissioners (NAIC) Life Actuarial Task Force (LATF) Indexed Universal Life (IUL) Illustration Subgroup, American Academy of Actuaries  – 5p
  • 2019 0308 – AAA to NAIC (IULSG) – IUL Illustration Subgroup – 
  • – AAA to NAIC (IULISG) – IUL Illustration Subgroup, American Academy of Actuaries Work Group Comment Letter on Illustrations for IUL Products under AG 49 – 2p
    • Life Illustrations Work Group comment letter to NAIC IUL Illustrations (A) Subgroup on the exposed menu of options regarding illustrations for Indexed Universal Life products under Actuarial Guideline 49. 
  • 2019 0628 – AAA to NAIC (IULISG) – IUL Illustration Subgroup – American Academy of Actuaries Work Group Comment Letter on IUL Products to NAIC – 4p
    • Life Illustrations Work Group comment letter to NAIC in response to questions on the illustrations of Indexed Universal Life products under Actuarial Guideline 49. 
  • 2020 0221 – AAA to NAIC (IULISG) – IUL Illustration Subgroup – American Academy of Actuaries Comment Mr. Fred Andersen Chair, IUL Illustration – 144p
    • Includes: 1991-1992 – SOA – Final Report* of the Task Force for Research on Life Insurance Sales Illustrations, Society of Actuaries – 142p

1980s – ACLI to NAIC

  • To: Member Company Chief Executive Officers
  • From: Blake T. Newton, Jr., President, American Council of Life Insurance – Date: April 22, 1980
    • The purpose of the meeting was to discuss concerns about the liquidity conditions and the possibilities of future adverse developments.
    • The company people wanted to be sure that Mr. Volcker  [Chairman of the Federal Reserve] was fully aware of the potentials of the situation and to arrange a liaison between his staff and the staff of the Council and this aim was accomplished.
    • In the meantime, we have begun to explore the means by which the resources of the business might be applied to alleviate any temporary extreme liquidity problems that might arise for a particular member company.

1980-2, NAIC Proceedings

[Paul Volcker: 1979-1987, Chairman of the Federal Reserve]

  • 1982-1, NAIC Proceedings – 1981 1215 – Letter – ACLI to NAIC – Cost Disclosure for Universal Life, by the Special Task Force of the ACLI Cost Disclosure Subcommittee to NAIC Task Force on Life Insurance Cost Disclosure – 4p
  • STATEMENT ON BEHALF OF THE AMERICAN COUNCIL OF LIFE INSURANCE TO THE NAIC (A) COMMITTEE’S TASK FORCE ON LIFE INSURANCE COST DISCLOSURE, December 15, 1981
    • Since universal life insurance was then being marketed only on a very limited basis, the council task force’s proposals did not address this product.
      • The council has now developed a  recommendation for universal life insurance, which we would like to present for your consideration.
    • The essence of the proposal is that universal life insurance be treated for cost disclosure purposes as a life insurance plan with a nonguaranteed cost element.
      • Thus, the policy summary would show for the prescribed policy years the anticipated premiums and, both on the guaranteed and currently illustrated bases, the death benefits, cash surrender values, and endowment amounts, if any.
      • The life insurance cost indexes would be calculated on the currently illustrated basis, using the anticipated premiums, and would be required to be shown along with corresponding nonguaranteed elements.
      • An additional item of information that is recommended to be required in the policy summary is the point at which the policy will expire based on the policy guarantees and the anticipated premiums shown in the summary.  (p399)

1982-1, NAIC Proceedings – ACLI Paper on Cost Disclosure for Universal Life Products – 4p

  • STATEMENT ON BEHALF OF THE AMERICAN COUNCIL OF LIFE INSURANCE TO THE NAIC (A) COMMITTEE’S TASK FORCE ON LIFE INSURANCE COST DISCLOSURE, December 15, 1981
    • … the policy summary should include a statement on the point at which the policy will expire based on the policy guarantees and the anticipated premiums shown in summary.
    • …Universal Life should be treated as a life insurance plan with a nonguaranteed cost element for cost disclosure purposes.

1982-1, NAIC Proceedings – ACLI Paper on Cost Disclosure for Universal Life Products – 4p

  • It should be noted that a policy would not necessarily be classified as a “scheduled premium” policy simply because the specifications page might set forth a “planned premium” (a concept characteristic of current universal life insurance policies).
  • This is because the planned premium, in most cases, is set by the insured, not the insurer.

— ACLI

1983-1, NAIC Proceedings 

  • ACLI – ATTACHMENT TWO – STATEMENT ON BEHALF OF THE AMERICAN COUNCIL OF LIFE INSURANCE TO THE NAIC MARKET CONDUCT SURVEILLANCE (EX3) TASK FORCE, June 13, 1988
  • My name is Anthony T. Spano
  • Our proposal involves a method known as the “range” approach”  provide illustrations based on different assumptions. 
  • ⇒ This would serve to demonstrate to the consumer the effect on future benefits of changes in assumptions.
  • Also, illustrations based on other than the company’s current scale can provide particularly useful and timely information if a change in experience is anticipated.
  • We would point out some additional advantages of the availability of the range approach as opposed to a limitation of illustrations to current scale:
  • It is often difficult to define exactly what “current scale” is, since a company may, for example, have a different scale for current issued business as opposed to existing business.
  • A current scale limitation would favor companies using a new-money interest crediting approach versus a portfolio approach when interest rates are rising; the opposite would be true when interest rates are declining.
  • A current scale limitation would disadvantage companies that may be acting prudently by lowering current rates when interest rates decline.
  • Current scale illustrations may not be realistic in certain situations, such as at the peak or trough of an interest rate cycle.
  • Availability of the range approach might ease pressures on companies to produce aggressive current scale illustrations.
  • In concluding, we thank you again for agreeing to keep the dialogue open on this important issue.  We respectfully ask your favorable consideration of our proposal and stand ready to work with your task force in any way that might be helpful.

—  1988 0613 – Letter – ACLI to NAIC – A Statement on Behalf of the American Council of Life Insurance to the NAIC Market Conduct Surveillance (EX3) Task Force, Subgroup on Life Advertising Issues – 3p  

1988-2, NAIC Proceedings – PROPOSED AMENDMENT TO NAIC MODEL ADVERTISING RULES

1980s – AAA – American Academy of Actuaries – NAIC

  • 1981-12 – AAA – Journal of the American Academy of Actuaries re: Manipulation, Dividends, Life Insurance Buyer’s Guide -12p
    • Date: June 2, 1981
    • To: NAIC Life Insurance (C3) Subcommittee, From: AAA – American Academy of Actuaries – John Harding
      • Background: This statement was presented at a meeting of the Task Force on Manipulation, Lapsation, Dividend Practices and Annuity Disclosure of NAIC Life Insurance (C3) Subcommittee as a status report of the activities of the Committee on Dividend Principles and Practices.
      • This statement follows previous submissions on this subject to the NAIC (see statements 1979-14, 1960-18, and 1980-32) .
  • 1986-2 NAIC Proc. – NAIC Technical Services (EX5) Subcommittee 
    • DATE: June 11, 1986
    • TO: NAIC Technical Services (EX5) Subcommittee
    • FROM: American Academy of Actuaries Liaison Committee – ATTACHMENT ONE
    • Carl R. Ohman – Committee Chair
      • The American Academy of Actuaries Committee on Liaison with NAIC was established early last year to provide on-going, mostly non-technical, coordination and communication between the Academy’s Executive Committee and the NAIC Technical Services (EX5) Subcommittee on issues of actuarial significance to insurance regulators.
  • 1987–2, NAIC Proceedings –
    • Date: October 30, 1986
    • To: NAIC
    • 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.
  • 1987-2, NAIC Proceedings
    • Date: – ? –
    • To: NAIC –
    • From: AAA- American Academy of Actuaries, William T. Tozier, Chairman of the Task Force on Non-Guaranteed elements.
    • RE: Attachment Four – Comments Received from Industry Regarding Proposed Amendments to NAIC Model Rules Governing the Advertising of Life Insurance
      • Recommended modifications specific to definitions and sales illustrations directly related to life insurance products which contain “non-guaranteed elements;” e.g. values, premiums or benefits whose amount is not guaranteed by the term of the contract.
      • Response: The suggested changes were consistent with the intent of the proposal; and were incorporated into the draft of the rule.
  • 1988-2, NAIC Proceedings – (p409) – Letter – AAA to NAIC (LAHTF)
    • Now, on to the business at hand. The major changes you propose are the following
      1. A minimum credited interest rate of 3%.
      2.  Maximum mortality charges
      3. A required paid-up option.
    • p410 – In our June 1987 report, we waffled on whether a paid-up option should be required on flexible premium products. As
      mentioned earlier, there are technical arguments that none is required because premium default does not occur. However,
      the intent of the SNFL appears to require it. We are not opposed to the paid-up option requirement. We do have several
      comments and questions, as follows: 
  • 1988-2, NAIC Proceedings – (p495) – LATF, Life and Health Actuarial Task Force 
  • The Life and Health Actuarial Task Force (LATF) asked the American Academy of Actuaries Life Committee to develop amendments to the valuation and nonforfeiture provisions of the NAIC’s Universal Life Model Regulation.
    • In a letter to John Montgomery, dated Oct. 22, 1986, Gary Dahlman, chairperson of the Academy’s Committee on Life Insurance, stated that a Universal Life Task Force (ULTF) would be created to work on this problem.
    • The work of the ULTF has proceeded in several phases.
      • The first phase attempted to document the LATF’s concerns relative to the current model regulation and to suggest standards and criteria for evaluating proposed revisions.
        • A preliminary report covering this initial phase was presented for the December 1986 meeting of the LATF, with the objective being to achieve a consensus on the major issues before proceeding to the development of solutions.
          • A copy of the report (without attachments) is included in Appendix A.
      • The second phase has been an analysis by the ULTF of the problems identified with the current model regulation and the development of our initial conclusions and recommendations regarding the concerns described in the December report.
        • The target was a preliminary report that could be discussed at the June meeting of the LATF.
        • ⇒  This is that report.
        • With input from the LATF, it is hoped that a more complete report from our task force could be ready in September.
  • 1989-1, NAIC Proceedings – Society of Actuaries – Task Force on Nonforfeiture Principles Interim Report-Tentative Conclusions (p612-?)
    • Universal Life
      • 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)

AAA - American Academy of Actuaries to NAIC

1980s

  • 1981 - AAA - Journal - Statement 1981-12 - Exhibit C - Possible Changes In Some Sections Of The Life Insurance Buyer's Guide (LIBG), American Academy of Actuaries
  • 1981-2, NAIC Proceedings - AAA to NAIC Task Force on Manipulation, Lapsation, Dividend Practices and Annuity Disclosure - re: Report of the Committee on Dividend Principles and Practices - ATTACHMENT ONE-B, American Academy of Actuaries - (p732-734) - 3p
  • 1988-1, NAIC Proceedings - AAA - Task force report on valuation & nonforfeiture provisions of Universal Life Model Regulation, American Academy of Actuaries - p494-
  • 1988-2, NAIC Proceedings - AAA - Report of the Committee on Life Insurance of the American Academy of Actuaries on the NAIC Life Insurance Yield Comparison Index, American Academy of Actuaries - p512-

1990s

  • 1999 10 - AAA - Report of the American Academy of Actuaries' Equity Indexed Universal Life Work Group to the Life and Health Actuarial Task Force of the NAIC - 19p

2000s

  • 2001 12 - AAA to NAIC - Risk Management in the Insurance Industry - Session 7a, American Academy of Acturies - 51p
    • Non-traditional risks pose the greatest threat - Top three were:
      1. customer loyalty
      2. competitive threats
      3. operational failure (p43)
    • C. Life Insurance is only Balance sheet where 99% of the reserves (the major liability risk item) include no indication of what the company actually believes about the listed future obligations other than that they are adequate.  (p49)
  • 2005 03 - 2005-1, NAICProceedings - AAA to NAIC - Progress Report of the American Academy of Actuaries' Universal Life Work Group - Presented to the National Association of Insurance Commissioners' Life and Health Actuarial Task Force, American Academy of Actuaries - Attachment Twenty-Four - Life and Health Actuarial Task Force -3/10-11/05 - 43p
    • Universal Life Work Group Initial Modeling Results, American Academy of Actuaries - 34p
  • 2005 09 - AAA to NAIC - Framework for Life Reserve Valuation Main Report 09-01-2005, American Academy of Actuaries - 43p
  • 2006 01- AAA to NAIC - Life Practice Council Cycle Report, American Academy of Actuaries - 7p
    • A. Risk-Based Capital
      • The Life Capital Adequacy Subcommittee (LCAS) made significant progress with the National Association of Insurance Commissioner's (NAIC) Capital Adequacy Task Force's (CADTF) solution for C-3 risk for equity guarantees (C-3 Phase 2), which would replace the traditional factor-based approach with a non-formulaic (principles-based) approach based on internal models.
  • 2006 12 - AAA to NAIC - Report on Valuation Effects of a Principle Based Approach ("PBA") For Accumulation Type Universal Life, American Academy of Actuaries' Life Reserves Work Group Modeling Subgroup, American Academy of Actuaries - 15p

2010s

  • 2014 0523 - AAA to NAIC IULISG - IUL Illustration Subgroup - Life Illustrations Work Group comment letter to the Life Actuarial Task Force on ACLI proposal for an Actuarial Guideline for Indexed Universal Life Illustrations., American Academy of Actuaries - 3p
  • 2014 1205 - AAA to NAIC - Comments on Exposure Draft of Life Insurance and Annuity Pricing ASOP - Life Products Committee (LPrC) comment letter to Actuarial Standards Board on exposure draft of an Actuarial Standard of Practice (ASOP) on Life Insurance and Annuity Pricing., American Academy of Actuaries - 6p
  • 2015 0311 - AAA to NAIC IULISG - IUL Illustration Subgroup - Life Illustrations Work Group comment letter to NAIC Life Actuarial (A) Task Force on exposed actuarial guideline for indexed universal life illustrations., American Academy of Actuaries - 4p
  • 2015 0414 - AAA to NAIC IULISG - IUL Illustration Subgroup - Life Illustrations Work Group comment letter to NAIC Life Actuarial (A) Task Force on proposed actuarial guideline for indexed universal life illustrations., American Academy of Actuaries - 2p
  • 2015 0930 - AAA to NAIC LIAC - (Julie Mix McPeak - Chair, Life Insurance and Annuities (A) Committee) -  re: LIBG, Illustrations, American Academy of Actuaries - 3p
  • 2016 1218 - AAA to NAIC LIAC - LIWGCommentsNewWorkingGroup_012816, , American Academy of Actuaries - 1p
  • 2017 1019 - AAA to NAIC LIBGWG -  Work Group Comments on Life Insurance Buyer's Guide Discussion Draft - Non-Guaranteed Elements Work Group comment letter on the NAIC's Life Insurance Buyer's Guide (A) Working Group discussion draft, American Academy of Actuaries - 2p
  • 2017 1031 - AAA to NAIC - Committee Comment Letter on Proposed ASOP - pricing of life insurance and annuity products, American Academy of Actuaries - 11p
  • 2018 0831 - Letter - AAA, American Academy of Actuaries to NAIC (Liquidity Assessment (EX) Subgroup, Re: Scope of Insurers Subject to Liquidity Stress Test - The American Academy of Actuaries Life Practice Council's Macroprudential Task Force (MPTF) - 4p
    • At times, liquidity risk arises because liquid markets become temporarily illiquid. Moreover, a liquidity event can be triggered by factors that are noneconomic, such as a loss of confidence related to a ratings downgrade.
    • It is somewhat less clear that the scope criteria are congruent with the microprudential objectives of the framework.
    • It may be useful to review historical significant liquidity-related events (above a certain size) to determine whether the scope criteria would have captured these entities within the exercise.
      • For example, neither cash-outs of life insurance policies nor contractual downgrade provisions are included within the proposed scope criteria.