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April 28, 2006 at 11:21 AM
Life insurers and life actuaries are taking different approaches to developing preferred mortality tables that will be used to implement principles-based reserving.
The differences are raising concerns ranging from timing to perceived consistency to professionalism, according to a discussion among regulators, industry and actuaries held by the Life & Health Task Force of the National Association of Insurance Commissioners, Kansas City, Mo.
Paul Graham, a life actuary with the American Council of Life Insurers, Washington, asked regulators to amend a charge so that work could be done either by the American Academy of Actuaries, Washington, or the Society of Actuaries, Schaumburg, Ill. ACLI wants the change to provide more flexibility and, potentially, a quicker delivery of the revised tables, Graham said.
LHATF approved that part of the request but declined to act on a second component of the request, which was to look at the way tables are being developed.
The actuarial profession is working on a new mortality study that would take new data and create preferred and nonpreferred tables.
Graham said an interim preferred mortality table should use the 2001 CSO Table as a foundation and then split it to develop a preferred mortality table.
The reason is that the industry could lose credibility with the U.S. Treasury Department or Congress if it told them that the 2001 CSO Table was appropriate for tax purposes and then presented them with a very different table later on, he argued during the discussion.
