(by Terry Long)
Terry Long, FSA, MAAA, of our Kansas City office, and Mark Whitford, FSA, CERA, MAAA, of Franklin Templeton gave a presentation at Session 2.1 on The Challenge of Today’s Low Interest Environment at the SOA 2013 Life Insurance Conference which was held in New Orleans on April 15-17. Today’s interest rate environment is challenging for life insurers in markets around the world. A sustained low-rate environment makes it difficult for life insurers to achieve their target spreads. Also, today’s policy responses of central banks may increase the chance of a rapid rise in interest rates in the future. This scenario is also challenging for the financial management of life insurers. In this session, Terry and Mark reviewed approaches to quantify interest rate exposure, the strategic options available to life insurers, and the techniques used to implement these strategies in the market.
Terry Long, FSA, MAAA, and Leon Langlitz, FSA, MAAA, of our Kansas City office will be facilitators at the SOA 2013 Annual Meeting in San Diego, CA on October 21-23. Terry Long and Leon Langlitz will serve as facilitators for Session 129 Buzz Group: Current Topics Impacting the Smaller Insurance Company. Discussion will range from the impact of the existing economic situation to the state of regulation.
Tom Handley, FSA, MAAA, of our Kansas City office, is the moderator for "Session 41 PD: Rate Review—Federal and State Perspectives" on June 11, 2013 at the 2013 SOA Health Meeting which will be held in Baltimore, MD. There are new rules for rate review. Some of the issues to be addressed include: Compliance with both federal and state requirements—is it a burden? Will states use the Rate Review Template from the Center for Consumer Information and Insurance Oversight (CCIIO)? Are states moving to expand their rate review authority? Will states modify reporting requirements to coordinate with federal, and should states do this? Rate review threshold—what is reasonable? What do regulators expect to see in the rate filings to justify changes?
We are pleased to announce that Christopher J. Merkel, FSA, MAAA, has joined the L&E Kansas City office where he specializes in managed health care. Chris’s experience has touched virtually every area in the health care sector, including serving as an Appointed Actuary, Individual & Commercial group pricing, reserving, Medicare Advantage annual bid submission with CMS, M&A, provider contracting analysis, trend development, financial forecasting, experience studies, and rate filing submissions. His hands-on experience with assisting insurance companies expand into new states and territories is providing solutions to our Consumer Operated and Oriented Plan (CO-OP) clients as they navigate the volume of changes that are occurring in the health insurance market.
Dave Dillon, FSA, MAAA, MS, of our Dallas office, will be speaking on “Additional Actuarial reserves - When do you need them and How Much?” on July 24, 2013 at the Society of Financial Examiners 2013 Career Development Seminar which will be held in Summerlin, Nevada. This presentation includes a discussion on how SSAP 54 defines reserves that must be established for an A&H contract including Premium Deficiency Reserves. The AOMR requires that reserves are adequate in light of company assets. Similarities between these actuarial requirements can cause much confusion. The purpose and scope of these actuarial requirements will be clarified.
Terry Long, FSA, MAAA, of our Kansas City office, and Mark Whitford, FSA, CERA, MAAA, of Franklin Templeton will give a presentation at Session 2.1 on "The Challenge of Today’s Low Interest Environment" at the SOA 2013 Life Insurance Conference which will be held in New Orleans on April 15-17. Today’s interest rate environment is challenging for life insurers in markets around the world. A sustained low-rate environment makes it difficult for life insurers to achieve their target spreads. Also, today’s policy responses of central banks may increase the chance of a rapid rise in interest rates in the future. This scenario is also challenging for the financial management of life insurers. In this session, Terry and Mark will review approaches to quantify interest rate exposure, the strategic options available to life insurers, and the techniques used to implement these strategies in the market.
Terry Long, FSA, MAAA, of our Kansas City office, is the Program Committee Chair for the SOA's 2013 Life & Annuity Symposium to be held in Toronto on May 6 & 7. Terry is also the moderator for the Closing General Session (Session 95) which is on "Issues and Trends Facing the Insurance Market: A Discussion with Industry Leaders".
L&E has had its GSA Schedule Contract Number GS-23F-0083N under Schedule Number 520 - Financial and Business Solutions extended by the GSA for another five year period. Our service area is actuarial services. The contract award period is from Dec. 12, 2012 through Dec. 11, 2017. Interested parties can check out our GSA Advantage Contractor Information.
Glenn Tobleman, FSA, FCAS, MAAA, of our Dallas office was a speaker for the Life and P&C Actuarial Update session at the IASA Texas Chapter 2012 Fall Conference in Irving, Texas on November 16. Staying up to date on the best practices in analyzing and calculating the biggest liability on the balance sheet is vital as companies re-shape their products to meet current consumer needs and more effectively estimate future unpaid losses. This session discussed current considerations for both P&C and life insurance companies. In addition, Glenn specifically discussed the principle-based approach to setting reserves for Life Insurance companies (“PBR”) and provided examples of how reserves will be computed based on a principle-based approach.
Terry Long, FSA, MAAA, of our Kansas City office, gave a presentation on Innovation and Compliance at the 2012 ACORD Implementation Forum which was held in Ft. Lauderdale, Florida on October 23. Innovation and technology are driving changes across the industry including a need for new products for new markets. You need to be ready to deploy products faster than ever before to be competitive. However, many of these changes include compliance aspects which you need to consider during the development process. Implementers gained new perspectives and insights into the intersection of compliance and products during this session.
Terry Long, FSA, MAAA, of our Kansas City office, was a panelist at the SOA 2012 Annual Meeting & Exhibit's Session 104 WS - Low Interest Rates: Financial and Product Implications in National Harbor, MD on October 16. This workshop addressed the impact of low interest rates.
Leon Langlitz, FSA, MAAA, of our Kansas City office, was a presenter for Session 11 - Smaller Insurance Company Section Hot Breakfast on October 15, 2012 at the SOA 2012 Annual Meeting & Exhibit in National Harbor, Maryland. This session provided a brief update on the Smaller Insurance Company Section's activities. Attendees had an opportunity to raise issues in which the section should become involved during the upcoming year.
L&E was an exhibitor at the Society of Actuaries 2012 Annual Meeting & Exhibit in National Harbor, Maryland on October 14 - 17. Our door prize was a $150 gift certificate to Fiorella's Jack Stack Barbecue of Kansas City. Jack Stack has been a premier BBQ restaurant in Kansas City for 50 years. The lucky winner was Susan Allen, FSA, MAAA of United American Insurance Company and Globe Life and Accident Insurance Company. Congratulations Susan and enjoy the flavor of Kansas City.
Our thanks to everyone who visited our booth.
Tom Handley, FSA, MAAA, of our Kansas City office, has been elected to the Society of Actuaries’s Health Section Council for a one-year term which begins in October.
Terry Long, FSA, MAAA, of our Kansas City office, and Don Walker, ASA, MAAA, of Farm Bureau Life Insurance Company of Michigan gave a presentation on Low Interest Rate Environment on August 7, 2012 at the 27th Annual Farm Bureau Actuarial Conference which was held in San Antonio.
Dave Dillon, FSA, MAAA, MS, of our Dallas office, was a presenter for "C14 - Clear as Actuarial Mud - Contract Reserve Strengthening vs. Premium Deficiency Reserves vs. Asset Adequacy Analysis" on July 31, 2012 at the Society of Financial Examiners 2012 Career Development Seminar which was held in Dallas. This presentation included a discussion on how SSAP 54 defines reserves that must be established for an A&H contract including Premium Deficiency Reserves. The AOMR requires that reserves are adequate in light of company assets. Similarities between these actuarial requirements can cause much confusion. The purpose and scope of these actuarial requirements were clarified.
Scott Morrow, FSA, FIA, MAAA, of our London & Kansas City offices, will be speaking on "Implications of Mortality Improvement in Product Pricing" at the NALC Fall 2012 Conference in Williamsburg, VA on September 21.
Tim DeMars, FSA, FIA, MAAA, and Scott Morrow, FSA, FIA, MAAA, of our London & Kansas City offices, are on the Actuarial Standards Board's Life Settlements Mortality Task Force. This committee is in charge of creating a new Actuarial Standards of Practice (ASOP) on mortality assumptions for the life settlement market. The ASOP is meant to give guidance to Actuaries working in the life settlement market on how best to perform A/E mortality studies.
Lewis & Ellis, Inc. are now members of the Institutional Life Markets Association (ILMA). ILMA is a trade association serving primarily investors' interests in the longevity and mortality-related marketplace. By creating innovative capital market solutions, ILMA members help to expand consumer choice in one of their most important assets - their life insurance. The Association is a leader in establishing best practices and in raising awareness about this growing and vital industry. Roger Annin is the primary contact at L&E for ILMA.
Tim DeMars, FSA, FIA, MAAA, of our London & Kansas City offices will be speaking on "Life Expectancies: Portfolio Managers and Advisors Talk about the Results" at The Life Settlements Conference 2012 - a DealFlow Media Event in Las Vegas on September 10.
Scott Morrow, FSA, FIA, MAAA, of our London & Kansas City offices, presented the Annuity survey results portion of the SOA Research Department's Mortality Improvement Survey Webcast on Tuesday, July 24.
Roger Annin, FSA, FIA, MAAA, and Scott Morrow, FSA, FIA, MAAA, of our London & Kansas City offices, serve on the SOA's Mortality Improvement Survey Subcommittee and are two of the authors of the Report of the Society of Actuaries Mortality Improvement (Life – Reinsurer), Report of the Society of Actuaries Mortality Improvement (Life – Direct), and Report of the Society of Actuaries Mortality Improvement (Annuity). These reports present the results of the Mortality Improvement Survey for reinsurers of life insurance, direct insurers, and insurance companies and respondents who write annuity business conducted by the Society of Actuaries (SOA) Committee on Life Insurance Mortality and Underwriting Surveys.
Terry Long, FSA, MAAA, of our Kansas City office will be a facilitator at the 2012 Valuation Actuary Symposium in Los Angeles on September 11. Terry Long will serve as a facilitator for Session 58 OF - Smaller Insurance Company Chief and Corporate Actuaries Forum. This popular forum, now in its tenth year, has a unique format and focus on issues faced by actuaries in leadership positions at smaller insurance companies.
In June, Financier Worldwide spoke with Tim DeMars, FSA, FIA, MAAA, of our London & Kansas City offices, about the outlook for life settlement funds for their 10 Questions column. Life settlements are viable investments because of regulatory constraints that create an arbitrage opportunity after a policy is issued. Financier Worldwide is a leading publisher of news and analysis on the global corporate finance market place.
The Standard Valuation Law (“SVL”) defines the minimum standards to be used in the calculation of life insurance and annuity reserves. Due to the current low interest rate environment, it is all but certain that the maximum valuation interest rates for 2013 life insurance issues will decrease. For life insurance contracts with interest guarantee periods of more than twenty years, the maximum valuation interest rate will automatically decrease from 4.00% to 3.50%. As a result, all products currently issued using 4.00% reserve factors will need new reserve factors based on a 3.5% valuation interest rate if they are issued in 2013.
Lewis & Ellis' actuaries are prepared to provide expert guidance to our clients and have summarized options and how to plan for these changes in 2013 Changes in the Valuation Interest Rate. It will be updated on a regular basis. So, please check back regularly for updates.
Cabe Chadick, FSA, MAAA, of our Dallas office, served as the Interim Chief Actuary for the California Department of Managed Health Care from March through June 2012. In that role, Cabe helped the Department with policy issues resulting from the Patient Protection and Affordable Care Act, including health insurance rate reviews, exchange development, as well as reinsurance and risk adjustment.
California has a unique two-agency insurance/health plan oversight system with the Department of Managed Health Care overseeing HMOs and the Department of Insurance overseeing traditional insurers. The Chief Actuary must liaison with the CA DOI, consumer groups, CA health plans, as well as new federal rate review authorities. The Department of Managed Health Care is growing its actuarial staff, and Cabe enjoyed his contribution to that effort as well.