Compass

A Product Double Header: 2017 CSO Table & PBR (9/14/17)

LifeTrends partnered with an independent actuarial consultant, Timothy Pfeifer, FSA, MAAA, to publish a white paper regarding the impact of the new 2017 CSO Table and PBR.

 Here are a few excerpts from the article (document link below):

 "Two highly significant regulatory requirements have been adopted by state regulators in recent years which will have substantial impact on the development of new life insurance products in coming years. The two requirements are the adoption of a new standard mortality table, called the 2017 Commissioners Standard Ordinary (CSO) Table, and Principles Based Reserves (PBR). 

 Why are we faced with yet another CSO Table update?

 The last standard industry mortality table was completed sixteen years ago in 2001, and was known as the 2001 CSO Table. Since that table was developed, the industry has changed in many ways. Examples include much greater experience with preferred risk mortality, more accelerated underwriting, more experience at larger face amounts, more older-age experience, and more knowledge relative to causes of death.

 What is PBR and what factors are considered in its calculation?

 For over 150 years, life insurance companies have calculated statutory reserves (reserves reported to state insurance regulators) using fairly basic actuarial formulas. These formulas have used conservative variables, so the resulting reserves were often very conservative." 

 Read the full whitepaper here: A PRODUCT DOUBLE HEADER: 2017 CSO TABLE & PBR