Risks – Page 7 – [BonkNote]

Policyholder Behavior IAIS Question 83: NAIC Response: Lapse risk is an example of an overall important category of policyholder behavior, which is an important risk in a number of products such as universal life and variable annuities. (p11) 2015 0213 – IAIS – IAIS Insurance Capital Standard Public Consultation Document – Final NAIC comments –…

Policy Loans Loans LIRP – Life Insurance Retirement Plan Chris H. McElvaine: …I heard another policyholder at the annual meeting mention that he has taken advantage of his 6% policy loan provision. He has reinvested that money with the same company in an RRSP five-year interest certificate bearing a phenomenal rate of interest. Apparently he…

Nature of… The nature of the life insurance industry calls for a relatively conservative investment policy, with safety of principal being of highest importance. — ROBERT R. WYAND II 1977 – INVESTMENT STRATEGY AND PLANNING, Society of Actuaries – 16p

ICP 19 – Conduct of Business (COB) – IAIS iaisweb.org///icp-19 iaisweb.org/activities-topics/conduct-and-culture/ 2022 06 – IAIS – Supervisors’ use of key indicators to assess insurer conduct – 22p ….in the United States, the term “market conduct” instead of “conduct of business” is more widely used. 2015 0501 – AAA to IAIS – Committee Comments To IAIS On…

Reputational Risk I sincerely believe we have a flawed instrument in today’s sales illustrations. …we did not communicate the impact of change as well as …we should have. Our biggest mistake would be to delay. I don’t believe the consumer will tolerate or forgive us, let alone the regulators, if we do nothing. — Robert…

Interest Rate Risk – (C-3) In many jurisdictions, insurance companies have expended significant efforts to understand the sensitivity of their investment portfolios to underlying market risks, especially interest rate risk. 2001 11 – BIS / The Joint Forum – Risk Management Practices and Regulatory Capital Cross-Sectoral Comparison – 126p The mismatch between the cash flows…

Bank-Like The regulation provides for the pre-funding of cash values, so that the amounts will be available upon policyholder demand, and will not be contingent upon sufficient surplus being available at that time to cover what is the equivalent to a demand deposit. The regulation relies heavily on the NAIC Universal Life Insurance Model Regulation…

Macroprudential versus Microprudential Regulation Common Exposures Contagion Liquidity modeling Mass lapses macroprudential surveillance Systemic amplifiers Triggers NAIC Liquidity Stress Testing (LST) Framework NAIC MACROPRUDENTIAL INITIATIVE (MPI) – [link] Macroprudential Task Force (MPTF) of the American Academy of Actuaries Common Exposures 269 For instance, in 1991 six major life insurers, each with over $4 billion in…

Interconnectedness MGIC, for instance, which Baldwin bought for $1.l7 billion, had $380 million in real estate and other assets which Baldwin sold to raise cash for the purchase. But instead of selling only to outsiders, Baldwin has sold some of its assets, including stock of its own operating companies, to its own insurance companies. ”Some…

Assets https://www.acli.com/-/media/ACLI/Files/Fact-Books-Public/02FB19FChap2Assets.ashx?la=en#:~:text=Life%20insurer%20holdings%20of%20corporate,(Table%202.1%2D2.2). https://fred.stlouisfed.org/release/tables?rid=52&eid=804724#snid=804747