In the third quarter of 2019, Milliman consultants and actuaries conducted a survey to establish market best practices in the application of VM-21: Requirements for Principle-Based Reserves for Variable Annuities. Written into the requirements are several decision points for the application of the standard which are at the discretion of the carrier. The survey summarizes responses from 25 variable annuity carriers regarding these decision points. The carriers surveyed are diverse in terms of total in-force account value and material account value exposure to living and death benefits.
The Financial Accounting Standards Board issued accounting standard update 2018-12 on August 15. It contained targeted changes to the accounting for long-duration insurance contracts. This paper by Milliman actuaries William Hines, Zi Xiang Low, and Karthik Yadatore summarizes the main resulting changes to the accounting of life insurance and annuity products.
The Financial Accounting Standards Board (FASB) has proposed significant changes to accounting standards for long duration insurance contracts to address several stakeholder concerns. In this report, Milliman consultants discuss the impact of the FASB’s proposed changes on earnings and equity for several illustrative product types. They also examine the industry’s preparedness to adopt the new guidance.