Albert said that if a company could not use the new CSO Tables and used the current 1980 CSO Table instead, it would cause "inconsistencies in reserving from year to year."
Regulators have included this point in the draft of a model regulation to accompany the new CSO Tables because of the difficulty in obtaining sufficient data to develop these new tables.
That difficulty highlights a trend that regulators and insurers agreed was more prevalent today than during the development of the 1980 CSO Tables. "Companies are watching costs more and not participating in studies because it is very expensive," Albert says. "It was always a problem and it is getting worse. The question is how to reverse it."
Regulators discussed two approaches: having experience data available when it is requested and having companies provide data every year.
William Carroll, a life actuary with the American Council of Life Insurers, said the ACLI opposes the yearly requirement. If such a requirement were mandated, he said, there would be practical considerations that need to be worked out. For example, he said, the elements of the data call would need to be identified and that data currently needed could be specified. But it would be impossible to determine what data will be needed 10 years down the road, he added. "This is a huge, unnecessary job."
In addition to the cost of participating in studies, concern over the confidentiality of proprietary company data was also raised.
Reproduced from National Underwriter Life & Health/Financial Services Edition, June 24, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
