New York defies NAIC on principle-based reserving

Superintendant Lawsky introduces new formula-based methodology


Tensions between the New York State Department of Financial Services (NYDFS) and National Association of Insurance Commissioners (NAIC) appear to be growing, with the unveiling of a rival system by the New York regulator for calculating reserves for certain types of life business.

Superintendent Benjamin Lawsky of NYDFS explained in a letter of March 27 that his department would cut New York life insurers' capital requirements for term life business by 30–35%. This reduction would be achieved by