Leslie Jones, a life actuary with the South Carolina insurance department who spearheaded the issue for LHATF
, said after the vote that "this was a long, arduous project, but I think it is an excellent result."
And, Blaine Shepherd, a life actuary with the Minnesota Insurance Department, said that it was a good idea if LHATF
regulators kept abreast of any potential difficulties in the credit markets for insurers.
Larry Bruning, a Kansas life actuary and LHATF
chair, described how limiting PBR to certain life products initially could foster unfairness in the marketplace, potentially giving those products an advantage over products not part of PBR.
Additionally, Larry Bruning, a Kansas regulator and LHATF
chair, suggested that a transition could take place over a 3-year period.
subgroup also had a discussion about whether the Valuation Manual would have to be completed or nearly completed and introduced along with an amended SVL draft, or whether a more bare bones version could be introduced and developed over time.
Regulators were divided on whether it is an accounting or an actuarial issue, according to Mike Batte, LHATF
chair and New Mexico regulator.
During the LHATF
meeting, Gregory Jenner, executive vice president, taxes and retirement security, with the American Council of Life Insurers, Washington, expounded on that theme.
Tom Campbell, a life actuary with Hartford Life Insurance Company, Simsbury, Conn., and chair of the variable reserve working group at the American Academy of Actuaries, Washington, said members of the LHATF
should communicate their belief that variable annuities with guarantees are "toxic" if they really believe that to be true.
During further discussion of a principle-based solution, LHATF
voted to expose work of the American Academy of Actuaries' life reserve working group.
Mike Batte, LHATF
chair, asked, "What does the task force want to do with VA-CARVM?" He noted that to date, the ACLI, Academy and New York department have offered suggestions for reserving, but consensus has not been reached.
In February, the Affordable Life Insurance Alliance, Washington, offered a solution focusing on asset adequacy analysis and in April, the American Council of Life Insurers, Washington, offered a compromise proposal that embraced the work of LHATF
in the short term while a long-term resolution is developed.
During a discussion of the issue at LHATF
, prior to the 9-1 vote to advance the draft, several issues surfaced.