March 2013 Workshops

EVENT:   March 2013 Workshops   

DATE: Wednesday March 20, 2013
12:50  Registration begins
  1:45  Workshop sessions begin (see attached schedule)
  5:15  Bar opens (cocktails, beer, wine, soda pop)
  5:45  Dinner

PLACE: Holiday Inn Chicago Mart Plaza, 14th Floor Conference Center & 15th Floor LaSalle
(Located atop the Apparel Center, just west of the Merchandise Mart – see directions below) 350 W Mart Center Dr, Chicago 60654

COST: $115 with dinner, $95 without dinner
(Reduced rate for retirees, unemployed, full time students: $70 with dinner, $50 without dinner)

Workshops cover a variety of hot topics in each of the time slots.  Make your reservation online by Tuesday, March 12, 2013.  If you have questions, please call Pat Pruitt at 312-751-3392 or Bob Aronsohn at 312-653-5677.  This information, more speaker biographies, and subsequent updates are posted on our website at
Use this opportunity to fulfill some of your continuing professional development requirements.  You can earn more than 3 hours toward your annual AAA and SoA CPD requirements while you meet and network with other local actuaries face-to-face.

We welcome and encourage non-actuaries to attend our workshops because information covered is relevant to a wide range of work within the insurance and consulting industries.  Please share this announcement with others who may be interested. 

Suggested educational tracks are listed (in parentheses) beside each title:  General, Health, Investment, Life, Pension, and Risk Management.

Register online at …
After you register, you will receive a payment link via E-mail.    
Payment should be made in advance online by credit card or e-check.  The day of the event, any form of payment can be accepted on site. 
We strongly encourage advance payment, as it speeds up entry on the day of the event.  If you pay your fee online using the secure PayPal link, we will send you the program (and dinner ticket, if applicable) before you arrive.  You will not need to check in:  Simply pick up your name badge and go to your first session.   

Refreshments will be provided before each session.

1:45 p.m. Workshop Sessions A

A1:  Forecasting Extreme Events/ Life Insurance Regulatory Structures – US & EU (Risk Management)
Tom Herget, FSA, MAAA, CERA
Brian Paton, FFA, MAAA – Director, Life Actuarial Practice, PricewaterhouseCoopers LLP
i) Forecasting Extreme Events – What Taleb’s Turkeys Missed.
Tom Herget will lead a discussion of the SoA’s newly released research paper, Recognizing When Black Swans Aren’t:  Holistically Training Management to Better Recognize, Assess and Respond to Emerging Extreme Events.   This paper will review current methods for trying to detect black swans and why some methods have failed.  Attendees should bring an example of a black swan they experienced or one they think is on the horizon.
ii) Brian Paton will present on the SoA’s research paper, “Life Insurance Regulatory Structures & Strategy:  EU compared with U.S.”.   This paper will review current regulation and expected developments along with the implications for reserving, capital, product development and risk management. This session will focus on the risk management aspects of the paper and how well the regulatory regimes require and incentivize ERM.

A2:  Results from two SOA Research Projects on High Face Amounts and Preferred Underwriting (Life)
Al Klein, FSAA, MAAA, Consulting Actuary, Milliman, Inc.
Michelle Krysiak, FSA, MAAA, Consulting Actuary, Milliman, Inc.
The SOA completes numerous research projects every year, some through volunteer groups and some through hiring an outside organization to complete the project.  Milliman was hired to complete a High Face Amount study for the SOA; this study was based on the data from a large industry mortality and lapse study Milliman recently completed.  High face amounts were defined as $1 million and above.  This is the first High Face Amount study completed by the SOA since 1998, when Manulife completed their last study for the SOA. 
The recently published Preferred Underwriting survey was completed by the SOA Mortality and Underwriting Survey Committee and includes some elements (e.g., debit/credit structures and preferred exceptions) not previously studied by this group.
We will present some of the more interesting findings from these studies.  Please join us to hear more about these two hot life topics.

A3:  Health Care Reform Explicit Costs: 3Rs, Market Share, Tax (Health)
Stacey Muller, Actuary, FSA, MAAA, Milliman Milwaukee
Trevor Pollitt, FSA, MAAA, Combined Insurance Company of America
Click here for the slides
A4: Impact of Low Interest Rates on Insurance Companies and Retirement Portfolios (Life)
Daniel Winslow, FSA, CPA, Winslow Financial LLC
Kirk Kreikemeier, CFP, CFA, FSA, Principal, Pebble Valley Wealth Management
•Brief history of interest rates.
•Clarify the different components of yield
•Central bank activity and impact on short end versus market/inflation expectations impact on long-end
•Insurance companies impact on profitability and stock price
•Impact of product choices for consumers as insurers leave market (VA, LTC)
•For those nearing or in retirement, impact on ‘hunt for yield’ and different choices
•Caution needed with historically ‘safe’ portion of portfolio

A5:  Financial Status and Update on Social Security (Pension)
Raymond Berry, ASA, MAAA, MSPA, EA
As an actuary, do you get asked questions about Social Security?  This session will provide a summary of the financial status of Social Security and proposals for reform.  Latest Trustees report and AAA Issue Briefs will be discussed.

A6:  Model Review and Validation Around Assumption Setting (General)
Nicole Kim, FSA, MAAA, Manager – Advisory, KPMG LLP
Nicholas Coleman, FSA, MAAA, Manager – Advisory, KPMG LLP
Actuarial models are used for a number of different valuation processes with a recent trend toward more principle-based approaches in US statutory, market-consistent embedded value (MCEV), economic capital and IFRS and more.  Our presentation will focus on model review and validation techniques around assumption setting process with emphasis on leading trends and practices in the process and governance of assumption setting.
Click here for the slides

A7:  US NAIC Solvency Modernization Initiative Update
Kush Kotecha, FSA, MAAA, Manager, Financial Services Office, Ernst & Young LLP
James Collingwood, ASA, MAAA, Manager, Financial Services Office, Ernst & Young LLP
In 2008, the Solvency Modernization Initiative (SMI) was launched to update the U.S. solvency regulation framework. The SMI includes a review of international developments regarding insurance and banking supervision, international accounting standards, and their potential use in U.S. insurance regulation. Given continued regulation by the FED and creation of the FIO, as well as solvency developments in the International community, the approach to risk management cannot be overemphasized.
The session will describe the basic architecture of the SMI road map. The SMI approach, challenge organizations to integrate a modeling approach into the risk management framework, which cuts across many different departments and functions in firms. The presenters will share their insights into the challenges and areas of gain from developing an ERM framework, and creating an Own Risk and Solvency Assessment (ORSA)  report.

Refreshments will be provided before each session.

3:00 p.m. Workshop Sessions B

B1:  Progress toward the new GAAP (IFRS) (General)
Douglas S. Van Dam, FSA, MAAA, Manager, Actuarial Services, PolySystems, Inc
In the second quarter of 2013 the FASB plans to release its exposure draft for the insurance accounting standard (new GAAP) and the IASB will re-expose its revision to the 2010 exposure draft.  This presentation will highlight:
•A quick review of the history of this project
•Decisions made in the fall of 2012 on revenue and presentation and on transition rules
•What the IASB wants to get out of its re-exposure
•Where the FASB and the IASB differ
•What will be the impact on life/health/annuity insurers and preparation steps

B2: Individual Update on Mortality Table (Life)
Mary J. Bahna-Nolan, MAAA, FSA, CERA, Director, PricewaterhouseCoopers LLP
Implications of the new 2012 Payout Annuity Mortality Table as well as developments of the 2014 VBT and implications for PBR/VM-20.

B3:  CBOE’s & the Insurance Industry (Investment)
Matt McFarland, Director – Business Development, Chicago Board Options Exchange
John Wiesner, Risk Management Strategist, Chicago Board Options Exchange
The presentations will show how CBOE’s customizable FLEX© options work for insurers.  There will also be a description of what exotics options CBOE is hoping to add to the platform to help match more of carriers’ liabilities.  There will also be a description of a new option pricing service that will provide insurers pricing from actual market making firms on FLEX options, and on the volatility surface out 15 years, as well as custom options the users request themselves.

B4:  Rx Trends (Health)
Jason Gomberg, FSA, MAAA, Actuary, Milliman
Jamie Vora, PharmD, MBA, Pharmacy Management Consultant
Now that the generic wave of 2012 is over, what is next?  We will cover how the pharmacy landscape is changing and how pharmacy fits in with Health Care Reform.

B5:  Common Framework for the Supervision of Internationally Active Insurance Groups and Getting Ready for the ORSA (Life)
Tom Herget, FSA, MAAA, CERA
Brian Paton, FFA, MAAA – Director, Life Actuarial Practice, PricewaterhouseCoopers LLP
i) Common Framework for the Supervision of Internationally Active Insurance Groups – This session will address the purpose, progress and prognosis of this initiative to regulate internationally active insurance groups.  It could well affect those insurers not international in scope as regulators seek to maintain a level playing field.
ii) Getting ready for the ORSA – This session will cover the topic of preparing for the National Association of Insurance Commissioners (NAIC) Own Risk and Solvency Assessment (ORSA) requirement. In particular it will cover the risk management and capital processes that underpin the regulatory requirement and how to derive value from the process.  The session will also cover where companies are currently well prepared for an ORSA and where companies commonly have further work to do to meet the requirements. 

B6:  Introduction to the Illinois Public Pension System (Pension)
Jason L. Franken, FSA, EA, MAAA, Foster & Foster Consulting Actuaries, Inc.
Louis Kosiba, JD, MBA, CEBS, Illinois Municipal Retirement Fund
Introduction to the Illinois public pension system – it is not just the five large funds
–          How did the funding levels get their current levels
–          Insight from the executive director of one of the largest funds in the state
–          Actuarial problems with the funding of the system

B7:  Four Degrees of Separation: Climate Change, Energy Use and Risk Management (Risk Management)
Timur Gök, Visiting Associate Professor, Department of Finance, DePaul University
From a complex systems view, we explore the implications of climate change for managing risks in an integrated ecological-socioeconomic system.

Refreshments will be provided before each session.

4:15 p.m. Workshop Sessions C

C1:  U.S. Mortality at Advanced Ages: Cohort Analysis (Life)
Dr. Leonid A. Gavrilov
Dr. Natalia S. Gavrilova
Session outlines methodological approaches to mortality measurement after age 85 years in extinct birth cohorts and describes methods of mortality estimates at advanced ages. Mortality analysis is illustrated using several datasets on U.S. mortality including the Human Mortality Database.  Mortality modeling, approaches to hazard rate estimation and data quality control are presented.  Possible reasons of finding apparent mortality deceleration in earlier studies are also discussed.
Click here for the slides

C2:  Professionalism in the Everyday Life of an Actuary (General)
Mike Boot, FSA, MAAA Managing Director, Sections and Practice Advancement Department,  Society of Actuaries 
Ken Williams, FCAS, MAAA, Actuarial Manager, COUNTRY Financial
Participants will explore the importance and role that professionalism plays in the everyday life of an actuary. Special emphasis will be given to Actuarial Communications ASOP 41 and criteria for documentation.  A case study will be used to engage the audience for their comments, observations and insights. Participants will also gain an awareness of the multitude of resources available to the actuary as they navigate professionalism issues, along with thoughts on how those resources can be applied and interpreted.

C3: Middle Market – Challenges and Considerations (Life)
Phil Murphy, MBA, Munich Re
An overview of the challenges and best practices required to tackle the shifting landscape presented by the middle market.  What can be done to maximize ROI in this increasingly complex and competitive space in the life insurance market?  Every situation is unique, so what are the components of a successful program?

C4:  Life Insurance Tax Update (Life)
Charles D. (Bud) Friedstat, FSA, MAAA, Consulting Actuary
Arthur V Panighetti, FSA, MAAA, Northwestern Mutual Life
This session will focus primarily on life insurance company tax reserve issues but may also briefly discuss certain recent developments in the life insurance product tax area.  Tax reserve issues to be discussed will include developments for in-force variable annuities with guaranteed living benefits (VAGLB's) and Actuarial Guideline 43 post implementation issues including recent developments and current IRS audit treatment, other recent developments in the tax reserve area including cases and rulings other IRS audit issues related to life, health and annuity reserves, expected near term IRS pronouncements, life PBR related tax reserve issues and issues to be addressed by the IRS Priority Guidance Program.  This session will also discuss new developments in the tax reserve area including the impact of the low interest rate environment as well as activities of the AAA Tax Work Group.

C5: LTC GAAP and STAT Active Life Reserving Considerations (Health)
Loretta Jacobs, FSA, MAAA, Senior Manager, Financial Services Office, Ernst & Young LLC
Carl Ghiselli, FSA, MAAA, Actuary, Insurance and Advisory Practice, Ernst & Young LLC
This session will cover issues around the calculation and reporting of long-term care (LTC) active life reserves for both statutory and GAAP purposes. We will discuss applicable regulations and guidance and cover financial projections such as asset adequacy testing and GAAP loss recognition testing. We will discuss best practices in calculation and analysis of LTC reserves from both an internal and external business management perspective.
At the conclusion of the session, attendees will be able to compare their reserving practices to industry best practices, understand and apply the key statutory and GAAP regulations and guidance to their situation, and apply learnings to their valuation and projection processes.

C6:  New Era Retirement Fund Investing (Pension)
Merrill F. Rajeck, CFA, Owner/Manager, Jay Company – Investment Management
Fed dictated microscopic interest rates are forcing retirement funds to take more risk.  Where can a manager earn a 7 ½% assumed rate of return?

C7: Predictive Modeling of Individual Mortality with Laboratory and Physical Measurement Data (General)
Brian Lanzrath, ExamOne Inc.
The proliferation of rate classes has been a long-term trend in life insurance underwriting, but the definition and stratification of such groups remains unsystematic.  This session will describe the construction and implications of a risk model derived from over 8 million individual applicants for whom complete laboratory and biometric data were available, including direct comparisons with existing methodologies and the potential for fully individualized pricing.

5:15 Reception (cocktails, wine, beer, soda pop)  – Wolf Point, 15th Floor
5:45 Dinner & Speaker Approximate start time – Wolf Point, 15th Floor
Game Changing Actuarial Recruitment and Engagement (General)
Margaret Resce Milkint, Jacobson Group
The industry is evolving and the actuarial marketplace is too! A competitive environment means the race for innovation is on. The current landscape offers workers opportunities like never before. In a hyper-connected society, the way employers reach candidates and employees is vastly different than the past. All of these forces are game changers!
This session will explore employment and labor market data and projections for actuaries and the industry as a whole. Participants will explore the hottest issues motivating the workforce and discover how to take advantage of the opportunities they present. Game-changing topics covered will include diversity, social media, nontraditional work scenarios, the “grow-from-within” approach and tools to build a state of the art career development tool kit!
Click here for the slides

Rows of chairs are available for those who want to watch this presentation without dinner.

Dinner is optional.  The event fee is $115 with dinner, $95 without dinner, (Retirees, unemployed, and fulltime students get a reduced rate of $70 w/dinner, $50 without dinner).  Make your dinner selection when you register online.  After you register, you will receive a payment link via E-mail.

SALAD:  farmers market salad, field greens, tomatoes, mushrooms, onions, green beans, red wine dressing

ENTRÉE – three choices – chicken or fish or vegetarian:
(chicken) breast of chicken stuffed with spinach, wild mushrooms, roma tomatoes
(fish) citrus bronzed Alaskan baked halibut, light lemon garlic cream
(vegetarian) risotto with grilled asparagus, fennel

DESSERT:  flourless chocolate cake + ganache glaze

Coffee & Tea

The bar remains open during dinner.

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