Keeping up with Regulatory Change
June  2016

Look at any industry meeting agenda or glance through an insurance news feed and you can feel the seismic shifts going on in life insurance regulation. Fundamental change is underway, placing huge demands on company resources. For example, right on the heels of Actuarial Guideline (AG) 48 implementation comes the three-year implementation period for principles-based reserving and the 2017 CSO mortality tables. At SCOR, we are following these changes closely, assessing the impact on direct and reinsured business and what we can do to support our clients.

In this issue of SCORviews, Mary Bahna-Nolan, head of Life R&D for SCOR, discusses the challenges of developing and implementing 2017 CSO in the midst of broader regulatory change. Mary co-chaired the joint task force responsible for overseeing the new tables’ development. She has been involved in the development of numerous mortality tables during her career, and she explains why "it’s different this time."

Also in this issue, Research Actuary David Wylde views mortality experience related to motor vehicle records. His analysis illustrates how the severity of the motor vehicle record impacts mortality experience.

Katherine Warner, Experience Analysis Actuary, reports the findings of two recent mortality studies that SCOR conducted. The first examines cause of death trends, segmented by male and female experience as well as natural and non-natural causes of death. The second study compares mortality experience of fully underwritten against traditional simplified issue (questionnaire only, with no third-party data). While we expect significant differences in mortality experience, it’s interesting to see how cause of death compares based on underwriting approach.

As the leading life reinsurer in the US, SCOR recognizes our duty to advance the understanding and management of mortality risk. Led by Mary Bahna-Nolan, our R&D team of actuaries, underwriters, statisticians and data analysts has a full slate of projects in progress. These include mortality experience studies based on our extensive database of reinsured lives.

Other major initiatives focus on accelerated underwriting, including the impact of removing exams and fluids from the underwriting process and effectiveness of new data sources. We are sharing our analyses with individual clients and will be covering outcomes of these initiatives in upcoming issues of SCORviews.