Capital Adequacy (E) Task Force Working Agenda (Revised June 2024)
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2025 # |
Owner |
2025 Priority |
Expected Completion Date |
Working Agenda Item |
Source |
Comments |
Date Added to Agenda |
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Ongoing Items – Life RBC |
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L1 |
Life RBC WG |
Ongoing |
Ongoing |
Make technical corrections to Life RBC instructions, blank and /or methods to provide for consistent treatment among asset types and among the various components of the RBC calculations for a single asset type. |
L1 |
Life RBC WG |
Ongoing |
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L2 |
Life RBC WG |
1 |
2024 or later |
1. Monitor the impact of the changes to the variable annuities reserve framework and risk-based capital (RBC) calculation and determine if additional revisions need to be made. 2. Develop and recommend appropriate changes including those to improve accuracy and clarity of variable annuity (VA) capital and reserve requirements. |
L2 |
Life RBC WG |
1 |
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L3 |
Life RBC WG |
1 |
2024 or later |
Provide recommendations for the appropriate treatment of longevity risk transfers by the updated longevity factors and consider expanding the scope to include all payout annuities. |
L3 |
Life RBC WG |
1 |
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L4 |
Life RBC WG |
1 |
2024 or later |
Monitor the economic scenario governance framework, review material economic scenario generator updates, key economic conditions, and metrics, support the implementation of an economic scenario generator for use in statutory reserve and capital calculations and develop and maintain acceptance criteria |
L4 |
Life RBC WG |
1 |
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Carryover Items Currently being Addressed – Life RBC |
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L5 |
Life RBC WG |
1 |
2024 or later |
Update the current C-3 Phase I or C-3 Phase II methodology to include indexed annuities with consideration of contingent deferred annuities as well |
AAA |
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New Items – Life RBC |
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L7
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Life RBC WG |
1 |
2024 or later |
In light of SAPWG INT to permit admittance of negative IMR, SAPWG requested CADTF to consider: 1. The elimination of any admitted net negative IMR from Total Adjusted Capital (TAC). 2. Sensitivity testing with and without negative IMR. |
CADTF |
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L8 |
Life RBC WG |
1 |
2024 or later |
Develop a structure proposal to reflect the split of the Annual Statement, Schedule D, Part 1 into two schedules pursuant to the SAPWG adopted bond project. |
CADTF |
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L9 |
Life RBC WG |
1 |
2024 or later |
Consider SAPWG Referral for Investments in Tax Credit Structures |
SAPWG |
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L10 |
Life RBC WG |
1 |
2024 or later |
Consider possible structural changes to account for reporting changes for collateral loans addressed through instructional changes for 2024 with the adoption of proposal 2024-15-L |
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2025 # |
Owner |
2025 Priority |
Expected Completion Date |
Working Agenda Item |
Source |
Comments |
Date Added to Agenda |
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Ongoing Items – RBC IR & E |
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Carryover Items Currently being Addressed – RBC IR &E |
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IR1 |
RBC IRE |
2 |
2024 or later |
Supplemental Investment Risks Interrogatories (SIRI) |
Referred from CADTF Referral from Blackrock and IL DOI |
The Task Force received the referral on Oct. 27. This referral will be tabled until the bond factors have been adopted and the TF will conduct a holistic review all investment referrals. |
1/12/2022
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IR2 |
RBC IRE |
2 |
2024 or later |
ÐÓ°ÉÊÓƵ Designation for Schedule D, Part 2 Section 2 - Common Stocks Equity investments that have an underlying bond characteristic should have a lower RBC charge. Similar to existing guidance for SVO-identified ETFs reported on Schedule D-1, are treated as bonds. |
Referred from CADTF Referral from SAPWG 8/13/2018 |
10/8/19 - Exposed for a 30-day Comment period ending 11/8/2019 |
1/12/2022
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IR3 |
RBC IRE |
2 |
2024 or later |
Structured Notes - defined as an investment that is structured to resemble a debt instrument, where the contractual amount of the instrument to be paid at maturity is at risk for other than the failure of the borrower to pay the contractual amount due. Structured notes reflect derivative instruments (i.e., put option or forward contract) that are wrapped by a debt structure. |
Referred from CADTF Referral from SAPWG April 16, 2019 |
10/8/19 - Exposed for a 30-day Comment period ending 11/8/2019 |
1/12/2022
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IR4 |
RBC IRE |
2 |
2024 or later |
Comprehensive Fund Review for investments reported on Schedule D Pt 2 Sn2 |
Referred from CADTF Referral from VOSTF 9/21/2018 |
Discussed during Spring Mtg. ÐÓ°ÉÊÓƵ staff to do analysis. |
1/12/2022
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New Items – RBC IR & E |
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IR5 |
RBCIRE |
1 |
2024 or later |
Evaluate the appropriate RBC treatment of Asset-Backed Securities (ABS), including Collateralized Loan Obligations (CLO), collateralized fund obligations (CFOs), or other similar securities carrying similar types of tail risk (Complex Assets). |
Request from E Committee, SAPWG, VOSTF |
Per the request of E Committee comments were solicited asking if these types of assets should be considered a part of the RBC framework. |
1/12/2022 |
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IR6 |
RBC IRE |
1 |
2024 or later |
Evaluate the appropriate RBC treatment of Residual Tranches.
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Request from E Committee, SAPWG, VOSTF |
Per the request of E Committee comments were solicited asking if these types of assets should be considered a part of the RBC framework. |
1/12/2022 |
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IR7 |
RBC IRE |
1 |
2025 or later |
Phase 2 Bond analysis - evaluate and develop an approach to map other ABS to current bond factors following the established principles from Phase I where the collateral has an assigned RBC. This project will likely require an outside consultant and the timeline could exceed 2-3 years. |
Request from E Committee |
Per the request of E Committee comments were solicited requesting the need for outside review. |
1/12/2022
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IR8 |
RBC IRE |
1 |
2024 or later |
Address the tail risk concerns no captured by reserves for privately structured securities. |
Referral from the Macroprudential (E) Working Group |
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8/11/2022 |
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IR9 |
RBC IRE |
2 |
2025 or later |
Evaluate asset concentration related issues and the potential changes to the risk-based capital formulas to address the risk. |
Referral from CADTF |
4/30/24 – Task Force referred to the Working Group. |
10/22/2024 |
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2025 # |
Owner |
2025 Priority |
Expected Completion Date |
Working Agenda Item |
Source |
Comments |
Date Added to Agenda |
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Ongoing Items – P&C RBC |
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P1 |
Cat Risk SG |
1 |
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Continue development of RBC formula revisions to include a risk charge based on catastrophe model output: |
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Year-end 2025 or later |
a) Evaluate other catastrophe risks for possible inclusion in the charge |
Referral from the Climate and Resiliency Task Force. March 2021 |
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4/26/2021 |
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P2 |
PCRBCWG |
1 |
Ongoing |
Review and analyze the P/C RBC charges that have not been reviewed since developed. |
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3/23/2023 |
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Carryover Items Currently being Addressed – P&C RBC |
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P3 |
P&C RBC WG |
1 |
Year-end 2025 or later |
Evaluate a) the current growth risk methodology whether it is adequately reflects both operational risk and underwriting risk; b) the premium and reserve based growth risk factors either as a stand-alone task or in conjunction with the ongoing underwriting risk factor review with consideration of the operational risk component of excessive growth; c) whether the application of the growth factors to NET proxies adequately accounts for growth risk that is ceded to reinsures that do not trigger growth risk in their own right. Referral to the Academy:
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Referral from Operational Risk Subgroup |
1) Sent a referral to the Academy on 6/14/18 conference call. |
1/25/2018 |
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P4 |
P&C RBC WG |
1 |
2024 Summer Meeting or later |
Continue working with the Academy to review the methodology and revise the underwriting (Investment Income Adjustment, Loss Concentration, LOB UW risk) charges in the PRBC formula as appropriate. |
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11/16/23 The Academy provided a presentation on their Underwriting Risk Report at the Joint PCRBC And Cat Risk SG meeting. 3/17/23 Proposal 2024-11-P was exposed for a 30-day public comment period during the Spring National Meeting. 4/25/24 Proposal 2024-11-P was adopted during the PCRBCWG interim meeting. |
6/10/2019 |
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P5 |
P&C RBC WG |
1 |
2025 Summer Meeting or later |
Evaluate the Underwriting Risk Line 1 Factors in the P/C formula. |
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7/30/2020 |
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P6 |
Cat Risk SG |
1 |
2025 Summer Meeting |
Quantify the R5 Ex-cat Factors for wildfire peril (for informational purposes only) Evaluate the possibility of adding PR018A to determine the R5 excluding the wildfire peril in addition to earthquake, and hurricane. |
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3/21/2023 |
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P7 |
Cat Risk SG |
2 |
2026 Spring Meeting |
Evaluate the impact of flood peril to the insurance market |
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3/21/2023 |
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P8 |
Cat Risk SG |
1 |
2025 Summer Meeting |
Create additional Rcat pages to collect commercial Cat modelers product information known as “Climate Conditioned Catalogsâ€, which would provide an estimate of climate change for hurricane and wildfire. |
From Solvency Workstream of the Climate & Resiliency (EX) Task Force |
1/29/24 Proposal 2023-17-CR was exposed for a 30-day public comment period at the Cat Risk SG Interim Meeting on Jan. 29. 3/17/24 Proposal 2024-10-P was re-exposed for a 22-day public comment period during the Spring National Meeting. 8/2/24 Proposal 2023-17-CR didn’t get adopted in Financial Condition (E) Committee. Instead, the Committee adopted industry proposal 2024-20-CR MOD on August 2. |
1/29/2024 |
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P9 |
Cat Risk SG |
2 |
2025 Fall Meeting |
Consider:
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6/10/24 Exposed a referral from the Tas Force for a 30-day comment period ending July 10. |
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New Items – P&C RBC |
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2025 # |
Owner |
2025 Priority |
Expected Completion Date |
Working Agenda Item |
Source |
Comments |
Date Added to Agenda |
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Ongoing Items – Health RBC |
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X1 |
Health RBC WG |
Yearly |
Yearly |
Evaluate the yield of the 6-month U.S. Treasury Bond as of Jan. 1 each year to determine if further modification to the Comprehensive Medical, Medicare Supplement and Dental and Vision underwriting risk factors is required. Any adjustments will be rounded up to the nearest 0.5%. |
HRBCWG |
Adopted 2024-09-CA (YE-2024) |
11/4/2021 |
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X2 |
Health RBC WG |
3 |
Ongoing |
Continue to monitor the Federal Health Care Law or any other development of federal level programs and actions (e.g., state reinsurance programs, association health plans, mandated benefits, and cross-border) for future changes that may have an impact on the Health RBC Formula. |
4/13/2010 CATF Call |
Adopted 2014-01H |
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Carryover Items Currently being Addressed – Health RBC |
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X3 |
Health RBC WG |
2 |
Year-End 2025 RBC or Later |
Consider changes for stop-loss insurance or reinsurance. |
AAA Report at Dec. 2006 Meeting |
(Based on Academy report expected to be received at YE-2016) Adopted proposal 2023-01-CA |
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X4 |
Health RBC WG |
1 |
Year-end 2025 RBC or later |
Work with the Academy to perform a comprehensive review of the H2 - Underwriting Risk component of the health RBC formula including the Managed Care Credit review. |
HRBCWG |
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4/23/2021 |
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X5 |
Health RBC WG |
3 |
Year-End 2025 or later |
Discuss and determine the re-evaluation of the bond factors for the 20 designations. |
Referral from Investment RBC July/2020 |
Working Group will use two- and five-year time horizon factors in 2020 impact analysis. Proposal 2021-09-H - Adopted 5/25/21 by the WG |
9/11/2020 |
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New Items – Health RBC |
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2025 # |
Owner |
2025 Priority |
Expected Completion Date |
Working Agenda Item |
Source |
Comments |
Date Added to Agenda |
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Ongoing Items – Task Force |
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CA1 |
CADTF |
2 |
2023 |
Affiliated Investment Subsidiaries Referral |
Ad Hoc Group |
Proposal 2024-08-CA was adopted at the 2024 Spring National Meeting. Proposal adopted during 4/30 TF interim meeting. |
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CA2 |
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Ongoing |
All investment related items |
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CA3 |
CADTF |
3 |
Ongoing |
Receivable for Securities factor |
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Consider evaluating the factor every 3 years. 6/28/24 - the TF adopted proposal 2024-13-CA. |
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CA4 |
CADTF |
1 |
Ongoing |
Update the annual investment income adjustment to the comprehensive medical, medicare supplement, and dental and vision factors. |
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4/30/24 – the TF exposed proposal 2024-09-CA for a 30-day public comment period. 6/28/24 – the TF adopted the proposal. |
4/30/2024 |
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CA5 |
CADTF |
2 |
2025 or later |
Evaluate if changes should be made in the RBC formula to reflect the possible changes in Schedule BA Collateral Loan reporting, including structural changes to RBC blanks and forecasting and changes of risk charges that commensurate with underlying collateral type. Referral from Statutory Accounting Principles (E) Working Group |
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1/23/24 – the TF received a referral from SAPWG regarding collateral loan reporting changes 3/26/24 – the TF exposed this referral for a 45-day public comment period. 6/28/24 – the SAPWG provided updates on this project. 10/14/24 – the SAPWG provide another referral to the Task Force. |
1/23/2024 |
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CA6 |
CADTF |
1 |
2025 or later |
Review the possibility of establishing a new Working Group to evaluate the non-investment risk issues.
Review those non-investment factors and instructions that have not been reviewed since being developed to determine if modifications should be made. |
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11/18/24 – the TF will address these issues first and determine whether a new working group should be established. |
4/30/2024 |
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CA7 |
CADTF |
2 |
2025 or later |
Review the RBC Preamble to determine whether additional modification is required to clarify and emphasize the purposes and intent of using RBC. |
RBC Purposes & Guidelines Ad Hoc Subgroup |
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4/30/2024 |
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CA8 |
CADTF |
2 |
2025 or later |
Evaluate if changes should be made in the RBC formula to reflect the possible changes in the existing low-income housing tax credit investment lines in the RBC formulas to allow the expansion of including any type of state or federal tax credit program, |
SAPWG |
4/30/24 – the referral was exposed for a 30-day public comment period. 6/28/24 – the SAPWG provided updates on this project. |
4/30/2024 |
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Carryover Items Currently being Addressed – Task Force |
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New Items –Task Force |
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