The National Association of Insurance Commissioners has formed a working group to focus on efforts to develop principles-based reserving life insurance rules.
The plenary, the body that includes all voting members of the NAIC, Kansas City Mo., approved the formation of the group, and officials say it should attract high-level participation by state insurance commissioners.
The working group held its first organizational meeting here at the NAIC's summer meeting.
The actuaries and others working on principles-based reserving want to move the insurance industry away from dependence on static reserving formulas, toward use of general actuarial principles, modern statistical forecasting methods and reliance on actuaries' judgment.
Many life insurers say a shift to principles-based reserving will reduce reserve requirements, allowing them to find new uses for some of the cash now locked away in reserves.