March 27 New York's top financial regulator said
it would lower the reserves to be set aside for term-life
insurance policies by 30-35 percent on businesses written after
Jan. 1, 2015.
"We have determined that our term-life formula results in
reserves that are high relative to actuarial experience and
should be modernized," New York Department of Financial Services
superintendent Benjamin Lawsky said in a letter to other state
regulators on Thursday.
The modifications to the reserve held against future claims
take into account an increased lifespan of policyholders and
expenses in acquiring and retaining business, Lawsky said.
Lawsky's letter to the National Association of Insurance
Commissioners, which coordinates rules and supervision among
them, comes in the wake of industry demands for lower reserves.
The regulator will also introduce a two-year full
preliminary term as initial expenses for acquiring and retaining
term-life business are higher as a proportion of premiums paid
than for certain other types of business, the letter said.
(Reporting by Avik Das in Bangalore; Editing by Don Sebastian)