The New Valuation Manual and the Life Product Development Actuary Seminar

149 Pages·2017·1.6 MB·English

The Product Development Section Presents 
The New Valuation Manual and the Life Product 
Development Actuary Seminar 
May 10, 2017 | Sheraton Seattle Hotel | Seattle, WA 

Presenters: 
Carrie Lee Kelley, FSA, MAAA  
Leonard Mangini, FSA, FALU, FRM, MAAA 
Sean M. Pena, ASA, MAAA  
Douglas L. Robbins, FSA, MAAA 
Kimberly M. Steiner, FSA, MAAA  
Chris Whitney, FSA, MAAA
The New Valua+on Manual and the Life
Product Development Actuary Seminar:
SOCIETY OF ACTUARIES

An.trust No.ce for Mee.ngs

Ac+ve par+cipa+on in the Society of Actuaries is an important aspect of membership. However, any Society ac+vity that arguably could be
perceived as a restraint of trade exposes the SOA and its members to an+trust risk. Accordingly, mee+ng par+cipants should refrain from
any discussion which may provide the basis for an inference that they agreed to take any ac+on rela+ng to prices, services, produc+on,
alloca+on of markets or any other maIer having a market effect. These discussions should be avoided both at official SOA mee+ngs and
informal gatherings and ac+vi+es. In addi+on, mee+ng par+cipants should be sensi+ve to other maIers that may raise par+cular
an+trust concern: membership restric+ons, codes of ethics or other forms of self-regula+on, product standardiza+on or cer+fica+on. The
following are guidelines that should be followed at all SOA mee+ngs, informal gatherings and ac+vi+es:
•  DON’T discuss your own, your firm’s, or others’ prices or fees for service, or anything that might affect prices or fees, such as costs,
discounts, terms of sale, or profit margins.
•  DON’T stay at a mee+ng where any such price talk occurs.
•  DON’T make public announcements or statements about your own or your firm’s prices or fees, or those of compe+tors, at any SOA
mee+ng or ac+vity.
•  DON’T talk about what other en++es or their members or employees plan to do in par+cular geographic or product markets or with
par+cular customers.
•  DON’T speak or act on behalf of the SOA or any of its commiIees unless specifically authorized to do so.
•  DO alert SOA staff or legal counsel about any concerns regarding proposed statements to be made by the associa+on on behalf of a
commiIee or sec+on.
•  DO consult with your own legal counsel or the SOA before raising any maIer or making any statement that you think may involve
compe++vely sensi+ve informa+on.
•  DO be alert to improper ac+vi+es, and don’t par+cipate if you think something is improper.
•  If you have specific ques+ons, seek guidance from your own legal counsel or from the SOA’s Execu+ve Director or legal counsel.

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Presenta.on Disclaimer

Presenta(ons are intended for educa(onal purposes only and do not
replace independent professional judgment. Statements of fact and
opinions expressed are those of the par(cipants individually and,
unless expressly stated to the contrary, are not the opinion or
posi(on of the Society of Actuaries, its cosponsors or its commi=ees.
The Society of Actuaries does not endorse or approve, and assumes
no responsibility for, the content, accuracy or completeness of the
informa(on presented. A=endees should note that the sessions are
audio-recorded and may be published in various media, including
print, audio and video formats without further no(ce.

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The New Valua.on Manual and the
Life Product Development Actuary

Overview of Product Development Processes that Might Change
Wed, May 10, 2017
Leonard Mangini, FSA, FRM, FALU, CLU, MAAA
President and Managing Member
Mangini Actuarial and Risk Advisory LLC
Presenter Biography- Leonard Mangini
Leonard Mangini, FSA, FRM, FALU, CLU, MAAA
President and Managing Member, Mangini Actuarial and Risk Advisory LLC

Mr. Mangini brings clients over 27 years of life, annuity, and health insurance and reinsurance
exper+se, holding senior Financial, Risk Management, Reinsurance and Product-related roles at
Manulife, ACE, AXA, and USLIFE. Leonard has also assisted clients with Financial Repor+ng, Risk
Management, Underwri+ng, Product Development, Reinsurance, M&A, and Market Conduct
issues as a consultant with E&Y, Milliman, and now his own actuarial and risk advisory prac+ce.

Prior to forming Mangini Actuarial and Risk Advisory LLC, Leonard was SVP and Deputy Global
Corporate Chief Actuary at Manulife. This role included supervising Principle-Based valua+on
assump+on and margin se‘ng, explaining Principle-Based earnings to stake-holders,
supervising Principle-Based valua+on governance in an ORSA environment for 19 business units
in the US, Canada, and Asia and serving on Global Product Risk and Global ALM CommiIees.

In previous reinsurance roles, Leonard has served as an internal Board member, President, Chief
Actuary, Chief Pricing Officer, and Chief Risk Officer, including green-fielding a US life reinsurer.

Mr. Mangini previously served as Chair of the SOA Financial Repor+ng Sec+on Council, is a
Member of the Academy’s PBR Life Reserve Work Group, a Member of the Academy’s
CommiIee on Professional Responsibility, and serves as Chair of the SOA Oversight Group on
PBR Earnings AIribu+on. Leonard is a Fellow of the Society of Actuaries (FSA), Cer+fied
Financial Risk Manager (FRM), Fellow of the Academy of Life Underwri+ng (FALU), and Member
of the Academy of Actuaries (MAAA), qualified to sign Statements of Actuarial Opinion (PSAOs).

New VM and the Life Product Product Development Actuary Seminar May 10, 2017
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Liability Disclaimer, Copyright, Use of Slides
Although we’ve aIempted to capture the leIer and spirit of the Valua+on Manual and ASOPs,
faithfully- you have a personal professional duty to familiarize yourself with the original source
material and apply professional judgment as to its specific applica+on to your own work and those
working under your direc+on as you perform covered Actuarial Services. The nature of your work,
and other professional designa+ons you hold, may require you to be bound by addi+onal
professional requirements from other organiza+ons as well.

This material has been prepared for general informa+onal purposes only and is not intended to be
relied upon as accoun+ng, legal, tax, or other professional advice, nor is it an Actuarial Opinion by
Leonard Mangini, Arnold Dicke, Tim Cardinal, Steve Stockman, or their respec+ve firms Mangini
Actuarial and Risk Advisory LLC, AADicke LLC, or Actuarial Compass LLC. Please refer to your
advisors for specific advice. The views expressed by the presenter are not necessarily those of
Mangini Actuarial and Risk Advisory LLC, AADicke LLC, or Actuarial Compass LLC.

Much of the original source material on VM-20/PBR and Professionalism is copyrighted material of
the American Academy of Actuaries, Society of Actuaries, or Na+onal Associa+on of Insurance
Commissioners. This presenta+on paraphrases these for educa+onal purposes to capture the
intent of the regula+ons and standards of prac+ce or results of SOA research, and every aIempt
has been made to iden+fy and cite original sources.

These slides may NOT be copied, redistributed, or otherwise furnished to any party without prior
wriIen consent of Mangini Actuarial and Risk Advisory LLC, AADicke LLC, or Actuarial Compass LLC
other than as required to comply with an audit of the aIendee’s annual CPE compliance.
The New ValuaLon Manual and the Life PD Actuary May 10, 2017
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Cynics View: Product Development in the “Good Old Days”

Pricing/Product Development Interact With MarkeLngà Brilliant Idea

Product Almost Ready for Marketà Hey We Need Some Reinsurance!

Modeling?:
•  AssumpLons: We have ours, ValuaLon has theirs, Capital worries about tail risk
•  Reinsurance is ProporLonal (Coinsurance) or Replaces AssumpLons (YRT)
•  Reserves pop out of our actuarial soWware system

Agent Roll-Out MeeLng in 10 Daysà Call Up ValuaLon to Kick the Tires

ValuaLon Does Whatever They Do

Roll-Out Product

Tell Admin and ERM You Have a New Product

Big Success- Pat Ourselves on the Back

Get Around to DocumenLng Stuff…When Things Are Slow

VM and the PD Actuary ©2015-7 Mangini Actuarial and Risk Advisory LLC May 10, 2017
PBR Valua.on Is Easy!

VM and the PD Actuary ©AADicke LLC and Mangini Actuarial and Risk Advisory LLC May 10, 2017
PBR Valua.on Is Easy!
Just 28 Simple Steps…

VM and the PD Actuary ©AADicke LLC and Mangini Actuarial and Risk Advisory LLC May 10, 2017