After decades of work
by Academy volunteers,
it looks like the era
of principle-based
reserving for life
insurance products
is finally upon us.
DONNA CLAIRE expected principle-based val- uation systems to take hold in the life insurance industry soon after the state of New York adopt- ed rules that required asset adequacy analyses of reserves. The requirement that companies develop economic models on the value of their eserves seemed to herald the move away from simply applying standard formulas. That New York decision occurred 26 years ago. “While serving on the advisory committee im- plementing the asset adequacy analysis in New York, I anticipated that just a few years down the road we would go to a principle-based system,” said Claire, adding, “I was a little optimistic.”
IllustratIon b Y george abe
JAN | FEB. 13 CONTINGENCIES 21
