State laws require life insurer companies to hold in reserve enough assets to pay all claims on policies the company has issued. The amount of reserves and capital required is based on set formulas. The National Association of Insurance Commissioners has been working on a new system known as Principles-Based Reserves (PBR). In the meantime, during the financial melt-down of 2008 and 2009 the life insurance industry sought a relaxation of the current reserve requirements to free up capital for investment and to carry out business operations. The NAIC’s Capital and Surplus Working Group rejected the industry’s sweeping proposals but approved other proposals impacting reserving requirements, reinsurance collateral and accounting procedures.
With the industry’s reserve requirements in flux, life insurance companies and their advisers need to stay informed on the current requirements. The Knowledge Congress is assembling a panel of experts to discuss the capital reserve requirements in a LIVE two-hour Webcast.
Course Level: Intermediate
Prerequisite: None
Method Of Presentation: Group-Based-Internet
Developer: The Knowledge Conference
Recommended CLE/CPE Hours: 2.0
(Please note, your State Bar or Accounting Board will make the final determination with respect
to continuing education credit.)
Advance Preparation: Print and review course materials
Course Code: 093870
Thomas Hampton
Commissioner
Larry Bruning
Chief Actuary
Peter S. Rice
Senior Counsel
Larry Bruning, Chief Actuary, Kansas Insurance Department
- Brief history of Valuation of Life Insurance Liabilities
- Describe the components of the Principle Based Approach (PBA) to Valuation
- Discuss the changes to the Standard Valuation Law to enable PBA
- Discuss the development of the Valuation Manual
- Discuss the impact PBA will have on statutory accounting, financial reporting and financial examinations
- Discuss the current PBA project time-line.
Peter S. Rice, Senior Counsel, Dewey & LeBoeuf LLP
1) Although NAIC leadership and LHATF deserve tremendous credit for moving principle based reserves and working on the capital relief proposals significant
challenges remain.
2) These challenges are both political and substantive.
3) Political challenges include:
A) Achieving uniform support at Commissioner level;
B) Addressing opposition from legislators (NCOIL in particular);
C) Satisfying small company concerns; and
D) Assuring industry commitment to helping get legislation enacted.
4) Substantive issues that remain include:
A) Solving concerns about corporate governance;
B) Figuring out how to do experience reporting; and
C) Addressing federal income tax issues.
Thomas Hampton, Commissioner, D.C. Department of Insurance, Securities and Banking
- A description of Principles Based Reserves
- The reason why US Insurance regulators are proposing the Change to this new reserving methodology
- Overview of the PBR Project; Expected Impact of Proposed Change to the Life Insurance Reserving System
- Risks if US regulators decide not to move to PBR.
- Life Insurance Companies
- Actuaries
- Accountants
- Consultants
- Insurance Attorneys
This is a must attend event for anyone interested in understanding capital reserve requirements.
- New guidance explained by the most qualified key leaders & experts
- Hear directly from key regulators & thought leaders
- Interact directly with panel during Q&A