Minimum assumptions

[CuriousGeorge]

SVL prescribes assumptions that define the minimum statutory policy reserve that a company can report. What if you want to use a different set of assumptions for your reserve calculation (e.g. a different mortality table)?

Say the alternate calculation produces higher reserves on 95% of the policies and lower on the other 5%, and the aggregate reserve is 20% higher than the minimum standard. Can you report the alternative assumption reserves as your policy reserve, as long as the aggregate reserve is higher than the minimum standard reserve, or are you required to also go back and establish additional reserves on the 5% that had lower reserves?

[Steve Grondin]

Originally Posted by CuriousGeorge

you are required to also go back and establish additional reserves on the 5% that had lower reserves

This.

[dunnigan]

It's not quite what the OP is asking, but would that kind of aggregate test be appropriate when your domiciliary state has one minimum standard and another state has a different minimum standard?

[Steve Grondin]

Originally Posted by dunnigan

It's not quite what the OP is asking, but would that kind of aggregate test be appropriate when your domiciliary state has one minimum standard and another state has a different minimum standard?

Yes. Dom state is policy level. Other filing states (where co is an admitted alien) would be aggregate level.

So if there is are some policies where Vactually held > Valien, it can be used to offset other policies where Vactually held = Vdom < Valien.

But a policy where Vactually held > Vdom cannot be used to offset another policy where Vactually held < Vdom, because the second situation can't exist.

[FattyMcGee]

This is all true until we get to Principles Based Reserves. Then you can demonstrate sufficiency for a whole group of policies, even if some of them within the group (say, everything under age 40) would be deficient on their own.