Principle-based reserving impacts insurance policy

Principle-based reserving impacts insurance policy

By Life Quotes, Inc.

principle based reservingA task force created by the National Association of Insurance Commissioners appointed a new subgroup to study the impact principles-based reserving would have on the life insurance industry.

Once completed, the NAIC Valuation Manual will define regulators’ and insurers’ methods for calculating the reserves of an insurance company, the NAIC said. The manual will include principles-based reserving, which is designed to help regulators protect consumers from insolvent insurance companies.

“As we near completion of the NAIC Valuation Manual, it seems prudent to study its impact on all major lines of life insurance to avoid different sets of rules among insurers writing different lines of products,” said Adam Hamm, Chair of the Principles-Based Reserving Working Group and North Dakota Insurance Commissioner. “Regulators believe that principles-based reserving will foster a more competitive playing field with better insurance products and prices for consumers.”

Principles-based reserving provides information about how much insurers must hold in reserve to remain solvent.

According to a National Conference of Insurance Guaranty Funds report, which cited an article in A.M. Best, at least 20 insurers became “impaired” in 2009, up from both 2007 and 2008.


  • Rockstar

    There are many places onlnie to find information and quotes for different car insurance policies. Even though it seems unfair to male drivers, female car insurance does in fact cost less. Insurance companies ultimately measure risk and then decide the appropriate premiums to charge their customers. Male drivers are statistically riskier so therefore their premiums are going to cost more.

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.