Milliman: Interstate Compact Survey Report

Milliman research report designed to identify why some companies have not yet registered with or filed through the IIPRC and to gauge the experience of those companies which have filed Interstate Compact submissions. The survey asked companies 17 questions regarding the IIPRC and overall, revealed a high level of satisfaction for companies currently filing IIPRC submissions. Responses to the survey were submitted by 61 companies.

A field test of the principle-based approach to life insurance reserves and capital

The NAIC's recent revisions to the Standard Valuation Law mark a move toward principle-based accounting. This summary discusses the results of Milliman’s collaborative field test to evaluate the implications of the law’s final principal-based framework.

Consistent Performance Measurement: Aligning Risk, Value and Capital Management

Insurers know well that using a consistent approach to managing and measuring diverse risk portfolios is an ERM essential that can help them make informed decisions about pricing, product strategy, capital budgeting and linking pay to performance. And yet most insurers use any number of measurements to gauge financial results across varied businesses.

As part of Towers Perrin's ongoing series on embedding ERM in insurance, this new article sheds light on a consistent analytical framework that can be applied to an insurer's internal measurement and management system to align value assessment, risk and capital management.

Barr: Preemption Still In FIO Proposal - Regulatory,Legislative and Tax Issues - Life and Health Insurance News

The Treasury Department believes any Federal Insurance Office legislation will let the FIO preempt state laws that conflict with international trade agreements on the sale of insurance.

Michael Barr, assistant secretary of the Treasury for financial institutions, gave that assessment Thursday in Washington at an ALI-ABA Conference on Life Insurance Company Products.

Mathas Sees Opportunities In Recession - Distribution

Because the life insurance industry weathered the recession so well, it now has the opportunity to remarket itself to consumers as a reliable and secure place to put their money, says Ted Mathas chairman of New York Life Insurance Company, speaking at the 20th annual executive conference for the life insurance industry in New York.

“The New Normal” is Insanity

More and more, it seems, “Welcome to the new normal” is becoming the mantra of the day when it comes to the pace of our business enterprises. We hear it everywhere from the hip technology gurus (ahem) and the purveyors of new technology. But what exactly are we talking about here?

MIB: Life Activity Increases

U.S. life insurers received more requests for individual coverage in October than they did in October 2008, and activity for older applicants soared.

Pre-Game Coverage

Agents help prospective athletes insure their future—even before they’re eligible to turn pro.

Moody's: Rating Outlook For US Healthcare Insurers Remains Negative

There will be downward pressure on the ratings of US healthcare insurers as a result of political and economic uncertainties, according to a new report by Moody's Investors Service. However, the rating agency believes that the larger and more diversified insurers are better positioned, both financially and strategically, to meet these challenges.

New York To Insurers: Tell Us How You Really Did - Regulatory,Legislative and Tax Issues - Life and Health Insurance News

The New York State Insurance Department is ordering life insurers in the state to adjust assumptions about investment portfolio calls, prepayments and defaults to reflect the true state of the economy.

Stochastic Modeling Part Of VA Reserving Debate - Regulatory,Legislative and Tax Issues - Life and Health Insurance News

A discussion among regulators of how a new guideline for reserving for variable annuities should be crafted included talk about how reliable stochastic scenarios are in assessing reserving needs of companies.

IBI: Job Loss May Sow Seeds for Future Claims - Core Protection Products - Life and Health Insurance News

Rising unemployment rates could lead to an increase in morbidity and mortality rates even for workers who keep their jobs.

Assessing GLBA: Ten years after the "Fall of the Wall" - Practice Management - Life Insurance Selling

Was the tearing down of financial regulatory walls a good thing for the U.S. insurance industry and other members of the financial sector? Did the deregulation facilitate competition and innovation as its authors intended?

Making the transition from life to long-term care insurance

As financial services professionals, life insurance producers have the enormous obligation to help protect their clients, and their clients’ families, against the financial risks they face. However, many Americans today may be under-prepared to deal with the financial risk associated with the need for long-term care.

Guy Carpenter Fifth Annual Specialty Insurance Program Issuing Carrier Marketplace

Guy Carpenter's Fifth Annual Specialty Program Issuing Carrier Survey finds the Program Administrators and Managing General Agents (PA/MGA) market has remained remarkably consistent from 2008 to 2009, despite the outbreak of the worst financial crisis in more than 70 years. While the number of respondents perceiving market growth has declined since last year, the outlook remains quite upbeat, especially given the year's tumultuous market conditions.

Update: Risk Profile, Appetite and Tolerance: Fundamental Concepts in Risk Management

In April 2009, Guy Carpenter's Financial Intelligence Team published a briefing entitled Risk Profile, Appetite and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness. That briefing included definitions of Risk Profile, Appetite and Tolerance and how these concepts fit into an Enterprise Risk Management (ERM) framework. It also presented the results of their initial Risk Tolerance Benchmarking study, which summarized the information publicly disclosed in this area. The update to that study reinforces the conclusion drawn six months ago that (re)insurers increasingly recognize the value of metric-based frameworks and capital models in evaluating their portfolios. Further, as this trend of recognition gains momentum, so does the importance of being able to understand one's place in the rapidly changing risk management space. Accordingly, this briefing revisits the terminology definitions and updates the survey of companies' disclosures in this area.

LIDMA: ESignature Is Here

Most large life insurers that sell through direct marketing programs have electronic signature tools in place or plan to introduce them within the next 12 months.

The Life Insurance Direct Marketing Association, Atlanta, has published that finding in a summary of results from a survey of 14 large insurers.

BestWeek: Competition Among Insurance Domiciles Heats Up

Competition among domiciles is heating up as many countries and U.S. states vie to host insurance companies and their related business, according to the Nov. 2 BestWeek U.S./Canada. Regulating insurers is a good business for governments. Insurance business brings jobs without pollution and boosts tax revenue.

LIMRA: Life Insurers’ Sales Trending Upward

Outlining the challenges facing insurance and financial services companies under the new economic and business landscape, Robert Kerzner, president and CEO of LIMRA, LOMA and LL Global, opened the 93rd LIMRA Annual Meeting this week by telling attendees that 2010 holds a silver lining.

Systemic Risk Bill Includes Insurers

Drafters of the new systemic risk bill proposal have applied roughly the same to rules to insurers that they apply to other financial services companies.

Financial Crisis Reduces Life Reinsurance Premium Volume; But Demand For Cover May Rise As Insurers Seek More Protection - 10/28/2009 - insurancenewsnet.com

Demand for life and health reinsurance is expected to rise as direct writers look to relieve pressure on their capital after the financial crisis, observers say.

LTC Rates Continue To Rise

The recession may be depressing prices for some goods and services, but the cost of nursing home care, home health care aides and assisted living services is still going up.

Risk Matters: LTC Quarterly (Gen Re)

This edition looks at recent evidence concerning the frequency and burden of falls, the value of exercise programmes and the prediction of future falls.

Changes to Diabetes Monitoring

This Gen Re Risk Matters issues describes the changes to the HbA1c measurement and how underwriters should interpret them.

Suicide and Life Claims

Lead article from Gen Re's Claims Focus September 2009 newsletter. Also:

• Dead Men Walking
• Case Study - Fatal Sailing Accident during Honeymoon? Claims Events Abroad

Arbitrating Disputes In The Retakaful World (Dewey & LeBoeuf)

The remarkable economic growth that the Muslim world has experienced in recent years, together with a substantial increase in the availability of Shari’a compliant financing, has created a burgeoning demand for insurance products that are compatible with Islamic principles (commonly referred to as “takaful”). The market for takaful has grown at a precipitous rate and is expected to continue trending upwards. One estimate of the global takaful market anticipates an $11 billion industry by 2015.

QuickStats: Percentage of Adults Aged ≥65 Years Limited* in Activities of Daily Living (ADLs), by Poverty Ratio† and Number of Limitations --- National Health Interview Survey, Uni

During 2003-07, among adults aged ≥65 years, the poorest (<100% of the poverty threshold) were approximately twice as likely to need help with ADLs as the least poor (≥300% of the poverty threshold). Older adults were more likely to have 3-6 ADLs than 1-2 ADLs, except for the poorest group where the difference was not statistically significant.

Tables listing major natural catastrophes and insured losses: Charts and figures from Swiss Re

Includes data on the worst catastrophes in terms of victims and the most costly insurance losses in years starting at 1970.

Swiss Re: Term Life Rates Must Rise

Tough U.S. reserving rules and the effects of the financial crisis already are forcing insurers to increase term life prices, a reinsurer says.

Kurt Karl and David Laster, analysts in the New York office of Swiss Reinsurance Company, write in a report that term insurance prices have started to rise this year after falling sharply for 15 years.

Visions for the Future of the U.S. Health Care System

Essays on healthcare reform from the Society of Actuaries.

The Other Side Of The Coin

In today’s health care arena in the United States, two seemingly inexorable, and conflicting, forces seem to be on a collision course. Politically, the cry is for universal insurance coverage, or more accurately access, for health care. Economically, the common perception is that health care in the United States costs too much and doesn’t necessarily deliver as much bang for the buck as it should considering the price. Reconciling these forces seems at best difficult and at worst impossible, but there is a way.

SOA Essay: Can We Capture Potential Health Care Savings Without A Federal Takeover?

Most proposals for reforming the U.S. health care system of today focus on reducing the high cost of care. The standard thought process assumes that reducing costs will increase access to care by improving the affordability of health care and perhaps funding more care for the uninsured. An endless number of proposals focus on this issue. In fact, most of today’s initiatives are based upon lowering costs and/or “bending the trend.” Too few proposals address the core of this essay, “How do we capture those savings?”

The Financial Crisis and Lessons for Insurers

The CAS, CIA, and the SOA's Joint Risk Management Section Research Team and the SOA's Committee on Finance Research are pleased to make available a research report that examines the subprime mortgage crises and related financial consequences from the perspective of the insurance industry. The report was authored by a team led by Shaun Wang of Georgia State University.

Getting Up To Speed: ERM In The Life Insurance Industry

Article in the October/November issues of The Actuary magazine.

Foreign Travel Reinsurer Survey Report

The Foreign Travel Survey Subcommittee of the Society's Committee on Life Insurance Mortality & Underwriting Surveys has completed their report on the results of a survey on foreign travel underwriting practices of reinsurance companies.

Comprehensive reinsurance regulatory reform: An imperative for sustained industry performance | Swiss Re

An important contribution from a strong and viable insurance industry is to help foster a sound economy. Insurers and their reinsurers have a shared responsibility to sustained, solid financial performance in order to be able to protect critical assets for years to come.

This is why Swiss Re believes it is in everyone’s best interest to take a comprehensive approach to reinsurance regulation consistent with today’s realities and the global nature of the reinsurance business. The existing U.S. regulatory system has served the industry well in an environment where reinsurance regulation as well as accounting and reporting systems varied widely. Historically, it struck a good balance between competing interests. But the world has changed, as reflected by the global nature of reinsurance capacity and enhancements in regulatory oversight in other parts of the world.

Model Behavior: Managing Your Modeling Risks

The recent financial crisis demonstrated that sophisticated computer models are no substitute for sound judgment. As the life industry begins its recovery, companies and regulators alike are reconsidering the complex tools on which our business now depends and how to improve our collective skill at using them.

Darin Zimmerman, Senior Vice President and Chief Actuary, discusses the near-term future of modeling with Donna Claire, president of Claire Thinking, Inc., a consulting firm which specializes in risk management and regulatory issues.

In Times of Low Growth, Preservation is Key

LIMRA statistics indicate that life insurance sales have dropped across product lines, with a 23-percent drop in premium levels in the first half of 2009 compared to the same period a year earlier (U.S. Individual Life Insurance Sales Trends, Second Quarter 2009). Sales of higher margin and fee-based products, such as universal life and variable universal life, have suffered most, while term experienced only slight declines.

In the News: Life Settlements

Life insurers have focused much attention on non-recourse premium financing of life settlements. However, other approaches to life-insurance-as-profit-taking exist which avoid insurable-interest questions.

An Update on the Life Settlement Market

At the start of the year, many life insurers worried that rising unemployment and declining portfolio values would increase consumer demand for life settlements as a source of cash. Midway through 2009, we’ve seen the opposite. With few exceptions, brokers in the $12 billion life settlements industry report sluggish sales at sharply reduced prices.

Black Swans and Mortality Risk

In The Black Swan: The Impact of the Highly Improbable, Nassim Taleb explains the realm of the black swan. The former Wall Street “quant” turned philosopher describes two worlds: “Mediocristan,” where events far from the ordinary rarely happen, and “Extremistan,” where unexpected and unpredictable events – black swans – can occur.

Transamerica Reinsurance

Analyzing insured mortality by cause of death (COD) often provides insights that a typical actual-to-expected study may not reveal. Our proprietary Transamerica Experience Database (TED) provides an excellent resource for examining COD statistics for an insured population. In Part 1 of this two-part series, we will focus on analyzing TED deaths by various sub-categories and explore the possible reasons for variations in the distribution of COD. (By David Wylde, Research & Development Actuary in the October 2009 Transamerica Reinsurance Messenger newsletter)

Variable Annuity Guarantees: What Went Wrong & What's Next

The broad decline in financial markets worldwide had a significant impact on the insurance industry. Asset-intensive financial products, such as variable annuities with guarantees, have presented various challenges for insurance companies. In 2008, market declines and the ensuing market volatility resulted in losses even for companies with the most sophisticated market risk management programs, as unhedged residual risks took a toll on statutory surplus.

ACLI Elects 2010 Board of Directors at Annual Conference

The American Council of Life Insurers (ACLI), whose member companies provide financial and retirement security to millions of consumers, elected its 2010 chairman and Board of Directors today at its 2009 Annual Conference, Foundation for the Future.

Insurance Studies Institute Partners with Wharton School

The Insurance Studies Institute (ISI) and Professor Kent Smetters of The Wharton School of the University of Pennsylvania will work together on Designing a Systemic Risk Regulator, a research project to study the need and optimal design of a systemic risk regulator in light of the recent financial crisis.

Administration Signals Support for Antitrust Repeal

The antitrust exemption enjoyed by insurers is coming under increased scrutiny in the health care reform debate. In his weekly radio address, President Obama accused the insurance industry of seeking to thwart efforts at health care reform.

The Geneva Association: Health And Ageing

Articles on health, long term care and more with a global perspective.

The future of European insurance supervision

The way the insurance industry is supervised is going to change. Beyond that, certainties are few and far between, although the de Larosière publication does start to make certain outcomes more likely. While the view remains hazy, something substantial is emerging from the gloom with the powers-that-be considering radical changes and wanting them to happen quickly. Staying in touch with the debate, and contributing to it, is key.

Insurance in Turkey: Opportunities and Challenges

The Turkish insurance market has experienced a period of significant growth, expanding by nearly 25% in each of the last seven years. While future growth may be moderate, the sector still offers potentially enticing returns. The challenges faced by those building a presence in Turkey are varied, and ahead of Turkey's likely accession to the EU, keeping pace with new regulations, products and distribution channels is essential.

Model Behavior: Managing Your Modeling Risks

The recent financial crisis demonstrated that sophisticated computer models are no substitute for sound judgment. As the life industry begins its recovery, companies and regulators alike are reconsidering the complex tools on which our business now depends and how to improve our collective skill at using them. Darin Zimmerman, Senior Vice President and Chief Actuary at Transamerica Reinsurance, discusses the near-term future of modeling with Donna Claire, president of Claire Thinking, Inc., a consulting firm which specializes in risk management and regulatory issues.