Actuarial Notes

Overview of Nonguaranteed Elements (NGEs)

By David Cook, Kristen Koon, Zohair Motiwalla and Karen Rudolph · Society of Actuaries Research Institute · 2022

Study guide: Exam ILA-101

A November 2022 study note, sponsored by the SOA's Individual Life and Annuity Curriculum Committee, on nonguaranteed elements (NGEs): the numeric parameters of life insurance and annuity policies that are not fixed and guaranteed at issue. It sets out their history and types, the professional guidance and regulation that apply to them, international considerations and common practical issues, and closes with a case study.

On the syllabus

Acknowledgements

1 Background and History of Nonguaranteed Elements in Insurance Policies

2 Context

  • 2.1 Types of NGEs
  • 2.2 Original Determination
  • 2.3 Impacts of Revising NGEs

3 Professional Guidance related to NGEs

  • 3.1 General Practice
  • 3.2 Determination Process
  • 3.3 Documentation
  • 3.4 Data Considerations
  • 3.5 Modeling Considerations

4 Regulations affecting NGEs

  • 4.1 New York Regulation 210

5 International Considerations

  • 5.1 Canada
  • 5.2 Asia
  • 5.3 United Kingdom

6 Common Practical Issues

  • 6.1 Available pricing documentation
  • 6.2 Company framework
  • 6.3 Experience data
  • 6.4 No industry standard
  • 6.5 Litigation
  • 6.6 Implementation
  • 6.7 Communication
  • 6.8 Establish a repeatable process

7 Case Study

  • 7.1 Conclusion

Sources