PBR – It’s not just Life Insurance What to expect for Variable Annuities, Fixed Annuities, and RBC Linda Lankowski, FSA, MAAA

Variable Annuities PBR – The Latest Developments PowerPoint Template Navy Cover with Icons

Variable Annuities – Background Concern over Captives Disclosure of Hedging Quantitative Impact Study (aka QIS) (2016) QIS2 (2017)

QIS2 Recommendations

VAIWG and QIS2

CTE calculations - Agreed Same Scenarios for CTE 70 (reserves) and C3-P2 (RBC) No more Working Reserve Modeling for Hedges (CDHS) Treatment of Revenue Sharing

Standard Scenario - Agreed Remove Standard Scenario Requirement…But… Create new Standard Projection Align assumptions with Stochastic Model

Additional Disclosures Other - Agreed Additional Disclosures CDHS related Assumptions Accounting Changes

Economic Scenario Generator Assumptions Refresh Still Being Discussed Economic Scenario Generator Assumptions Refresh PHer Behavior Market Paths Company Specific? Data not yet being collected at industry level

Non- Variable Annuities PBR – The Latest Developments Non- Variable Annuities PowerPoint Template Navy Cover with Icons

Regulator Concern over non-traditional features Fixed Annuities Regulator Concern over non-traditional features FIAs GMxBs VM-22 Updates for Val’n Interest Rate Will wait for AG-43/VM-21 updates before PBR proposal Expect similar to VM-21

Long Term Care PBR – The Latest Developments PowerPoint Template Navy Cover with Icons

LTC Other Products Academy paper on PBR for LTC Trying to solve Premium Rate Increase inconsistency issue first

RBC - Not Exactly PBR PBR – The Latest Developments PowerPoint Template Navy Cover with Icons

Tax Reform impact to RBC Expect changes to take effect in 2018 More changes in 2019 C-1: 20 Bond factors C-2: Update to take account of new CSO table Longevity Risk factor Operational Risk

Questions & Answers Questions?