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Old 02-13-2018, 10:51 AM
cheeznstix cheeznstix is offline
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Default Is AG38 subject to VM-30?

In forming the statement of actuarial opinion for business subject to AG38, does the appointed actuary need to follow the prescribed wording outlined in VM-30 in order to avoid describing and rationalizing additional or revised wording in the opinion? Or are AG38 opinions not subject to VM-30?
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Old 02-13-2018, 02:40 PM
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AG38 is in the NAIC Examiner's Handbook, affecting valuations under the pre-PBR laws. VM-30 is effective when PBR is effective, prospectively, affecting only new business. Cross-references seem confusing.
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Old 02-13-2018, 03:32 PM
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So what approach are companies taking with their actuarial opinions then? Follow VM-30 for non-AG38 opinions and do whatever they were doing before for AG38 opinions?
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Old 02-13-2018, 05:13 PM
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AG38 is in the NAIC Examiner's Handbook, affecting valuations under the pre-PBR laws. VM-30 is effective when PBR is effective, prospectively, affecting only new business. Cross-references seem confusing.
I think you're mistaking VM-30 (Actuarial Opinion & Memorandum Requirements) for VM-20 (PBR).
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Old 02-13-2018, 05:21 PM
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So what approach are companies taking with their actuarial opinions then? Follow VM-30 for non-AG38 opinions and do whatever they were doing before for AG38 opinions?
Short answer - what were you doing with your Statement of Actuarial Opinion & Memorandum before 2017? Did it not cover the AG38 business?

(Just my opinion)
I don't think VM-30 carves out sections covered by other AGs (IUL, VUL, VA, and certainly ULSG) - instead, I think the opinion covers all liabilities in Exh 5-8, IMR, allocated AVR and policyholder dividends (everything in the table), and where you need additional opinions, those also need to be issued.

And to answer your previous question, my understanding is that if you do not check "Prescribed Wording" and actually use the wording in VM-30, you do have to disclose why and how your words differ.

This is different from the AOMR in that there is much more prescription in VM-30. This was meant to make it simpler for regulatory analysts to understand actuarial opinions.
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Old 02-13-2018, 06:26 PM
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Originally Posted by wat? View Post
Short answer - what were you doing with your Statement of Actuarial Opinion & Memorandum before 2017? Did it not cover the AG38 business?
Ah, the traditional actuarial approach, "What did you do last year?"
And I was thinking along those lines in this case.

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. . where you need additional opinions, those also need to be issued. . .
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Old 02-13-2018, 08:51 PM
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Ah, the traditional actuarial approach, "What did you do last year?"
And I was thinking along those lines in this case.
Well, not to say that whatever was done last year was correct, but that the adoption of the Valuation Manual probably shouldn't change the reporting requirements of AG38 & AOMR and how those interacted.
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Old 02-14-2018, 09:20 AM
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Originally Posted by wat? View Post
Short answer - what were you doing with your Statement of Actuarial Opinion & Memorandum before 2017? Did it not cover the AG38 business?

(Just my opinion)
I don't think VM-30 carves out sections covered by other AGs (IUL, VUL, VA, and certainly ULSG) - instead, I think the opinion covers all liabilities in Exh 5-8, IMR, allocated AVR and policyholder dividends (everything in the table), and where you need additional opinions, those also need to be issued.

And to answer your previous question, my understanding is that if you do not check "Prescribed Wording" and actually use the wording in VM-30, you do have to disclose why and how your words differ.

This is different from the AOMR in that there is much more prescription in VM-30. This was meant to make it simpler for regulatory analysts to understand actuarial opinions.
I'm struggling to find a helpful answer in this response. Honestly, I can't even really follow what you're saying. Thanks for trying though.
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Old 02-14-2018, 01:30 PM
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I'm struggling to find a helpful answer in this response. Honestly, I can't even really follow what you're saying. Thanks for trying though.
For last year's SAO on reserves & the annual statement, which basically assesses whether your reserves are adequate, did it include or exclude the AG38 business? If it included it, how did you test/state the reserve adequacy?

If it excluded AG38, why was it excluded from the scope?


ETA: I think I understand your question now. VM-30 is specifically for the SAO that goes along with the life insurance annual statement ("Blue Book"), also known as the Actuarial Opinion & Memorandum. If you need to issue an SAO separately about the AG38 business, then that needs to be done, but doesn't necessarily have to have the language in VM-30. (Your AG38 opinion shouldn't be contradictory to your Blue Book SAO, though.)
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Last edited by wat?; 02-14-2018 at 01:37 PM..
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Old 02-14-2018, 02:09 PM
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I think you're mistaking VM-30 (Actuarial Opinion & Memorandum Requirements) for VM-20 (PBR).
VM-30 is a prospective part of PBR. It is not a regulation or current requirement where PBR is not yet effective.

The AOM requirements are in a model reg, which has been the law in every state for many years.
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