We have been following requests for relief by life insurance companies with respect to capital and reserve requirements in the current difficult economic situation. Following the NAIC’s rejection of proposals by the ACLI, individual insurers began to apply for relief to their domiciliary regulators, and two more state departments have published positions with respect to such issues. The Delaware Insurance Department has adopted two regulations (1212 and 1215) by Emergency Orders, which address the valuation of life insurance policies and the recognition of preferred mortality tables for use in determining minimum reserve liabilities. The Illinois Division of Insurance has promulgated Company Bulletin 2009-02, which rejects blanket relief, but which states that the Division would consider relief on a company-by-company basis. Posted to the Division’s web site are letters to eight companies relating to such requests. The first such letter, approving a request from Allstate Life Insurance Company relating to the accounting and valuation methodology for market value adjusted annuities, may be viewed here.
Of more industry-wide interest, the NAIC has posted a detailed chart which purports to summarize various permitted and prescribed practices, taken from annual statements submitted by various companies.