2016 cso issued policies 2016 backdating
The 2017 CSO contained data from 51 contributing companies versus 21 in the 2001 CSO.
In addition to the overall increase in exposures, there was significant increase in the exposures for smoker/non-smoker distinct issues, business issued under a preferred risk program and female risks than what was underlying the 2001 table.
Since then a remarkable shift in underwriting occurred as the industry moved to preferred and multiple preferred risk classes.
Also since that time, there has been a shift in mix of business in the industry, moving away from permanent products to term plans.
The product development team, tax team, treasury, valuation, IT, financial reporting, compliance, contracting and others will be involved.
For example, all products must be refiled with implementation of the 2017 CSO tables and may require new illustrations.
If a company’s term business has a large residual standard class and a lot of issues at younger ages, implementing the 2017 2017 CSO may lower reserves considerably.
Implementation of the 2017 CSO can create tremendous resource strain for a company, especially in light of other regulatory changes.
But more importantly, we are experiencing fundamental changes in industry regulation: principles-based reserving (PBR), Actuarial Guidelines 38 and 48, to name a few.
As far back as 2008, the group looked at the need for new CSO tables, but because principles-based reserving was coming, the industry and regulators decided to wait until PBR to update the CSO tables.
There was significant increase in the number of contributing companies and claims and policy exposures underlying the 2017 CSO over what was in the 2001 CSO.
As data submissions move from a voluntary basis to mandatory with the adoption of the Valuation Manual, we expect future data submissions will be even more complete and allow for further mortality analytics for future CSO tables.
Throughout development of any new tables there is discussion and debate.