Tax Cuts and Jobs Act Creation Industry Interpretations

Thomas Q. Chamberlain, ASA, MAAA
Ryan Kiefer, ASA, MAAA

This session will walk through some common interpretations applied to the recent tax reform laws. While IRS technical guidance has been limited, there is a series of common interpretations and assertions.

The Tax Cuts and Jobs Act Creation legislation significantly changes the tax reserves for insurance companies.  The changes to the law were replaced with less clear guidance that has resulted in several questions and misunderstandings. We will discuss some of the more common interpretations and feedback within the industry related to interpretations and recent technical guidance form the IRS. This session will cover:

  • Summary of the changes to tax reserve guidance and interpretations of the IRS 807 code for various product groups
  • Industry perspective as to best practices and interpretations where guidance is unclear
  • Changes in the calculation process and tax reserve ownership due to TCJA
  • Operational considerations for items beyond reserves (e.g. 807 (f) 10 year spreads, cash flow testing, RBC)
  • Control considerations under the new tax regime

Tom Chamberlain is a Managing Director in Deloitte’s Actuarial & Insurance Solutions practice with over 20 years of experience working in the life insurance industry and life insurance consulting. He specializes in Financial Reporting related issues that impact US GAAP, Statutory and Tax Actuarial Valuation.

Recently, Tom has been working with Deloitte Tax to interpret and evaluate the industries response to the tax reform included in the Tax Cuts and Jobs Creation Act (“Tax Reform”) and the new financial reporting requirements included in the Financial Accounting Standards Board (“FASB”) long duration targeted improvements changes (“LDTI”) included in ASU 2018-12.

Tom co-leads the Deloitte Technical Excellence group which evaluates, interprets and analyzes how new regulatory requirements across various capital and financial reporting paradigms impact the insurance industry. This group provides on-site LDTI and TCJA training.

Ryan Kiefer is a manager at Deloitte Consulting and has 11 years of experience serving as a consultant to the life insurance industry.  His primary focus is financial reporting where he manages several of the firm’s largest external audits of GAAP, statutory, and tax reserves and intangible assets.   Ryan has also led Deloitte’s life actuarial center of excellence which is focused on efficiently executing detailed tests of policyholder reserves in support of external audits.

He also assists advisory clients seeking to enhance or improve their financial reporting processes, analysis and financial controls.

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