Gary Bleetstein, ASG Partner-Oct. 2019

 

There has been as you know much discussion and questions as to why there is such a fuss being made about PBR- Principle Based Reserves and the 2017 CSO Mortality Tables.

 

Well, the fuss is because effective December 31, 2019 – ALL CURRENT LIFE PRODUCTS THAT HAVE NOT BEEN ADJUSTED CANNOT BE ISSUED ANY LONGER!

 

Principle Based Reserving – PBR is an NAIC requirement effective January 1,2020 that states a carrier must have compliant products or the old non-compliant products may not be permitted to be issued. For over 100 years, products were reserved based on actuarial assumptions. The new PRB is a required modeling valuation based on new technology, product pricing and reserves which are based on a Given reserve structure throughout the industry.

 

The 2017 CSO rules which give the Insurer’s in calcultaing cash values, statuartor reserves and pricing.

 

So why such as fuss ?

 

The fuss is really over which products and which carriers will have approved products by January 1, 2020, and the big issue is which carriers will have completed the re-pricing and what products will be availabe where and when ?

 

Consensus is that term pricing may be reduced and permanent product pricing may decrease or increase but in no case substantially.

 

In other words, the industry expects products that are re-priced should look similar to those being sold today.

 

At ASG, we will try and send updates on a regular basis to keep you informed about the products and availablilty and we also have a link on our website to assist you with questions.

 

 

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