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Emerging Changes to Valuation and Nonforfeiture Interest Rates for January 1, 2021

Alliance Virtual Events

Upcoming Challenges for Fraternal Benefit Societies Posed by the Current Interest Rate Environment

September 23 | 11:15 a.m. CST

Just when those in the insurance industry believed the persistent low levels of interest rates couldn’t sink any further, Spring of 2020 uncovered a new underground cavern to explore—and we may not yet be at rock bottom.

With key rates across the term structure reaching historic lows—nearly all within the last few months—and with Congress having discussions to alter the fundamental benchmark rates used to define life insurance from a taxability perspective, the potential for seismic change is brewing.

And this is all happening as fraternals are already grappling with their own challenges, pandemic-driven or otherwise.

The purpose of this presentation is to outline and discuss some critical items for which member societies should be preparing over the next several months, particularly:

  • Known changes to the statutory reserve valuation rate and nonforfeiture rates for 2021-issued plans
  • Potential further changes stemming from NAIC and Congressional actions, some of which could affect product design
  • Understanding the impact these changes have on product pricing as well as statutory reporting requirements (including statement entries, cash flow testing results, and RBC levels)

The formal presentation should take between 30-40 minutes, depending on interim questions, and we will be prepared for a Q&A session on these and related/peripheral topics, time-permitting.


Brad Simanek, FSA, MAAA
Consulting Actuary and Partner
Griffith, Ballard & Company

Austin Swanson, FSA, CERA, MAAA
Consulting Actuary
Griffith, Ballard & Company