Potential impact of changes in U.S. statutory reserve regulations on term insurance pricing

  • Print
  • Connect
  • Email
  • Facebook
  • Twitter
  • LinkedIn
  • Google+
By Daniel Rueschhoff | 02 March 2015
The changes implemented by the New York State Department of Financial Services (NYDFS) are expected to prospectively reduce term life insurance reserves by 30% to 35%. NYDFS proposed accomplishing this reduction by applying prospective mortality improvement factors and implementing a two-year full preliminary term period. What NYDFS did not say—but which has been communicated—is that it is opposed to principle-based reserves and doesn't plan to adopt VM-20. This research paper discusses the impact of these changes.