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Old 03-16-2018, 12:08 AM
rhoucag rhoucag is offline
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Default VM/SVL/PBR/NAIC background questions

I have a few questions on the background of US Stat.

Is the following background correct?

1 - NAIC came out with the SVL at some point as a model law with not much authority until the states adopted their versions.
2 - CRVM and CARVM were model reg/law clarifications/expansions of the SVL or where they part of the SVL?
3 - The Academy started issued Actuarial Guidelines that sometimes essentially function as regulations.
4 - A lot of the AGs seem to be specific application of SVL/CRVM/CARVM to new product types or situations (such as AG39 and then AG43 on VA)
5 - Forward a number of years, the NAIC started coming out with the VM-00 and VM-XX.
This sounds like a way of codifying into law AGs that govern reserves.
6 - There was a 2009 revision of the SVL that seems to commit the States to all the VM-XXs if they approve the new 2009 SVL.

Is this the right gist of it?
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Old 03-16-2018, 12:45 AM
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kazh kazh is offline
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1-NAIC has no authority to regulate or adopt regulations. They develop models for the states to adopt. States encourage each other to adopt them, especially key laws.
2-CRVM and CARVM are in the SVL as amended.
3-The NAIC issues Actuarial Guidelines (AGs). They are included in the Examiner's Handbook, which financial examiners generally follow in auditing companies. AGs are not laws, and are legally considered clarifications of previously written model laws, but lately some of them have been written as if they were new laws, e.g., with effective dates.
4-AGs are often more specific. A few have been adopted despite being technically in conflict with the law they "clarify." If they conflict with the law, they're inappropriate.
5-VM provisions are generally prospective, i.e., affecting policies issued after the VM has become effective. AGs can be retroactive to the extent that they appropriately clarify a previously adopted law. Effective dates in some AGs make this very confusing, as it is unclear whether the underlying law meant something else before the effective date.
6-Yes, once the NAIC adopts VM-XX, it is automatically effective in those states that have adopted the revised SVL enabling the VM.

Conflicts between the AGs and the VMs continue to create awkward situations.
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Old 03-16-2018, 01:04 AM
rhoucag rhoucag is offline
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Thanks so much. I usually don't like it when a new reg isn't retroactive, at least for a while back. I can understand a phase in period to ease capital issues.

So does this cause any weird applicability issues between AG43 and VM-21? Since the former was effective for issues after 1980 or so and VM-21 is later.
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Old 03-27-2018, 12:45 PM
dunnigan dunnigan is offline
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Does anyone know any differences between AG43 and VM-21?
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