Some Recent Actuarial Developments in the United States of America
SynopsisThe paper discusses developments resulting from (1) the recent passage by most of the state legislatures of the “Standard Valuation Law” and the “Standard Non-forfeiture Law,” and (2) the general adoption by the companies of a lower interest assumption in the calculation of premiums, reserves and non-forfeiture values.After a brief review of the system of regulation of life insurance in the United States and of the more important differences in practice as compared with practice in the United Kingdom, the paper proceeds to outline the background which led to the appointment of the “Guertin Committee” by the National Association of Insurance Commissioners to study and report on the need for a new mortality table and related matters and (subsequently) on non-forfeiture benefits. The main recommendations of the Committee and the subsequent modifications thereof as adopted by the Commissioners and later embodied in the Standard Laws are detailed.The effects on life insurance operations of the new Standard Laws in conjunction with lower interest assumptions and the marked upward trend in expenses are discussed. The paper concludes with a brief reference to two important changes being made by some companies in their policy conditions.