• II. Proposed Changes in the Standard Valuation Law
  Draft of November 20, 1972

1973-1, NAIC PROCEEDINGS

• lt may be of interest to convey some of the highlights, - - - excerpts of these communications follow:
  • We could accept the judgment of many, but not all, financial experts that we are now in a "new era" of economics in which interest rates will continue at a relatively high level for many years, if not permanently.
  • But, if the experts should prove wrong, this choice would, in time, lead to considerable financial losses to companies under long-term, investment-type policies, assuming a reasonable level of lapse rates.
  • The "new era" experts may be right, but they may be wrong, no one knows.  And, it is of paramount importance to a life insurance company that it continue to be solvent on any reasonable assumptions.

--  THE PROPOSED CHANGES IN THE STANDARD VALUATION AND NONFORFEITURE LAWS - As Recommended by the Joint Actuarial Committee of the Life Insurance Association of America and the American Life Convention - December, 1972

1973-1, NAIC Proccedings