Risk Management
Task Force

Policyholder Behavior in the Tail Subgroup (PBITT) Minutes


Policyholder Behavior in the Tail
June 28, 2005
10:00 a.m. Central Time

Participants: Mike Crooks, Steve Hodges, Bob Lalonde, Steve Siegel, Jim Reiskytl, Cliff Angstrom, Pete Bondy, Randy Tillis

Summary of call

  1. Bob reported that our researcher Dr, Kim, is working on a response to our extensive comments/suggestions sent to him over a month ago. He is teaching a class this summer so may not be able to spend much time on it till later in July. Bob will follow up later this month or early July to see how much progress he has made.

    Steve Siegel has followed up with the U.S. companies about submitting their U.S. data with unfortunately no success.

    Steve Siegel has contacted 2/3 U.S. companies writing business in South America (Metropolitan, New York Life in Argentina, and Pan American) thanks to Pete Bondy"s suggestions. Various possible additional contacts were suggested to Steve. Steve will also follow up with AIG and possibly Prudential about their Japanese business experience for this study.
  2. The almost final version of our questionnaire on Variable Annuity
    guaranteed benefits lapse and utilization rates was discussed. Jim suggested two changes:

    1. Under Question 2 regarding CTE 90 and two standard deviations paragraph eliminate the words about if you do or if you do not do stochastic testing and simply focus on what we want that is the first negative scenario if doing 90 CTE, the scenario or basis if you are using two standard deviations;

    2. Under Question 4 delete (shock lapse) and put a (SP) after the end of surrender period and ask for the identity of the benefits combined in the last column

    Randy agreed to work with Steve on the first suggestion and Steve will follow up on the second one.

    Everyone is to review the draft which was sent out today by Friday to Jim and Steve if they have any other suggestions. Steve will then send it out next week to all life actuaries. Jim will send it to the AAA VA working group to encourage them to fill it out.

    Jim thanked Sylvia for all her help, thanked Steve Siegel and his staff for making it happen and all others, especially Randy, who contributed.
  3. Jim Reiskytl will draft the Universal life no lapse guarantee lapse survey of experience/assumptions questionnaire for discussion on the next call. We will follow the format used for the VA Guarantees.
  4. Other possible lapse surveys. Randy will draft a survey on Equity Indexed products for discussion on our next call.
  5. As Ed Hightower was not on this call nor his other expert on LTC, the discussion of LTC questionnaire was deferred to our next call.
  6. Next Conference call - August 2, 2005 at 10:00 a.m. CST

    1. Update on Lapse research project Bob
    2. VA Guarantee Questionnaire Results
    3. Discuss Reiskytl's draft UL No lapse guarantee survey-- to be drafted for the call
    4. Discuss Tillis draft on Equity Indexed products
    5. Other ideas/suggestions for study/questionnaires
    6. Other

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