Emphasis: A Principles-Based Reserves and Capital Standard II - Thought Leadership - Towers Perrin

The move toward a principles-based approach (PBA) for determining reserves and regulatory minimum capital for life and variable annuity business continues in the U.S. The PBA framework being developed by the National Association of Insurance Commissioners (NAIC) will replace the existing formula-based approach with a stochastic model-based methodology (see Emphasis 2006/3, 'A Principles-Based Reserve and Capital Standard').

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