Description: ASU 2018-12 introduced a new concept called “market risk benefits” (MRBs). MRBs are a new accounting classification for benefits within deposit contracts, offering protection from “other than nominal market risk.” This applies to products with account values, including variable and indexed annuities with guaranteed living or death benefits attached (aka GMxBs). ASU 2018-12 Section 944-40-30-19D mentions both a non-option and an option-based valuation approach to account for MRBs. This article considers the option-based approach. The purpose is to highlight weaknesses in the current application of the option approach to MRBs, propose an alternative method, and consider the benefits of the new approach. The intent of this article is to persuade practictioners / actuaries / accountants that this is a better approach for applying the fair value option method to market risk benefits.

Description: The article describes how the Smaller Insurance Company Section's Principle-Based Reserves Team is planning to provide information and guidance about principle-based reserves.

Description: On March 25, 2010, the Treasury and IRS issued Notice 2010-29. The new Notice follows-up Notice 2008-18, in which the Treasury Department Treasury and the Internal Revenue Service IRS identified concerns regarding proposed Actuarial Guideline VACARVM and suggested approaches that might be taken to address those issues. Actuarial Guideline VACARVM was effective, as AG43, beginning on Dec. 31, 2009. This discussion is the fourth in a continuing series of interdisciplinary dialogues in TAXING TIMES on selected tax issues related to proposals regarding principle-based reserves.

Description: Embedded Risk in Settlement Options on Older Life and Annuity Contracts

Description: it discusses the framework and modeling of the market consistent valuation of fixed indexed annuity, against the backdrop of the convergence of accounting standards and internal risk management.

Description: CARVM Reserves for Variable Annuities with Guaranteed Living Benefits by James W. Lamson from The Financial Reporter, June 2000, Issue No. 42.

Description: This article highlights features of the SOA's Regulatory Web Resource. The intent is to encourage greater use of the Resource among section members.

Description: Results of an industry survey on life insurance companies' efforts to implement the recently adopted Life Risk-Based Capital Phase II Instructions, which include new requirements for variable annuity contracts. Adopted by the NAIC on October 14, 2005, the new requirements are effective for year-end 2005. Also discusses a summary of the requirements set forth in the instructions.

Description: This article discusses tax and accounting issues that arise under a recently-issued Chief Counsel Advice in which the IRS applied a life insurance company tax rule to a nonlife company that issues life insurance products