Life and Annuity Inforce Management Transactions
Background and Purpose
U.S. and Canadian insurers seek ways to efficiently manage inforce business using a variety of traditional and nontraditional arrangements such as mergers and acquisitions, closed block reinsurance including to offshore entities and strategic partnerships. The goals include reducing risk, providing capital relief, enhancing competitiveness or achieving higher investment yields. The purpose of this project is to create a resource to educate actuaries and others outlining the critical components and consideration for these types of arrangements to enhance current inforce management practice.
Research Objective
The Reinsurance Section is seeking researcher(s) to conduct a study of the types of traditional and nontraditional arrangements used to manage inforce including legacy blocks of business. Products of interest are life and annuity.
Utilizing existing literature, industry knowledge, and/or original research, the researcher will address the following questions:
- What are the typical arrangements used for managing inforce including discussing the similarities and differences in the key components of each structure?
- What are the drivers of supply and demand for each of these?
- What are the key considerations in selecting each vehicle, circumstances for success and the potential risks?
- What is the future outlook for these types of arrangements?
Note that the list above is not meant to be exhaustive but merely examples of topics that may be researched.
The researcher should summarize the results of the study into a report. Not only will the report include qualitative information that identifies typical arrangements and analyzes circumstances in which each would be valuable but include quantitative elements that show direction and magnitude impacts that support the qualitative analysis. For example, the researcher might employ hypothetical case studies (including quantitative analysis on illustrative products/models) that capture realistic drivers and are representative of industry transactions.
Proposal Requirements
To facilitate the evaluation of proposals, the following information should be submitted:
- Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
- An outline of the approach to be used (e.g. literature search, model, etc.), emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted, and possible limitations of the analysis.
- A description of the expected deliverables and any supporting data, tools or other resources.
- Cost estimates for the research, including computer time, salaries, report preparation, material costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included. Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.
As a guide for developing the project budget, please review the Historical Project Cost Guide (see Appendix) - A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions. The Reinsurance Section is interested in completing this project in a timely manner. Suggestions in the proposal for ensuring timely delivery, such as fee adjustments, are encouraged.
- Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.
Selection Process
The Reinsurance Section will appoint a Project Oversight Group (POG) to oversee the project. The [sponsoring entity/POG] is responsible for recommending the proposal to be funded. Input from other knowledgeable individuals also may be sought, but the POG will make the final recommendation, subject to Society of Actuaries Research Institute (SOA) leadership approval. An SOA staff research actuary will provide staff actuarial support.
Questions
Any questions regarding this RFP should be directed to Research-ML@soa.org.
Notification of Intent to Submit Proposal
If you intend to submit a proposal, please email written notification by September 15, 2023 to Research-ML@soa.org.
Submission of Proposal
Please email your proposal to Research-ML@soa.org; proposals must be received no later than than September 29, 2023. It is anticipated that all proposers will be informed of the status of their proposal by the end of October 2023.
Conditions
The selection of a proposal is conditioned upon and not considered final until a Letter of Agreement is executed by both the Society of Actuaries Research Institute and the researcher.
The Reinsurance Section reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available. The Reinsurance Section also reserves the right to redirect the project as is deemed advisable.
The Society of Actuaries Research Institute plans to hold the copyright to the research and to publish the results with appropriate credit given to the researcher(s).
The Society of Actuaries Research Institute may choose to seek public exposure or media attention for the research. By submitting a proposal, you agree to cooperate with the Society of Actuaries in publicizing or promoting the research and responding to media requests.
The Society of Actuaries may also choose to market and promote the research to members, candidates and other interested parties. You agree to perform promotional communication requested by the Society of Actuaries Research Institute, which may include, but is not limited to, leading a webcast on the research, presenting the research at an SOA meeting, and/or writing an article on the research for an SOA newsletter.
Conflict of Interest
You agree to disclose any of your material business, financial and organizational interests and affiliations which are or may be construed to be reasonably related to the interest, activities and programs of the Society of Actuaries Research Institute.
Appendix
The cost ranges below are intended as a guide for budgeting project costs for proposals in response to SOA Research Institute Request for Proposals (RFP). Please note these figures span the 33rd to 66th percentiles for all projects as well as projects that involve a specific approach (lit review, survey, etc.). They are based on historical costs over several recent years. Expected costs for some RFPs may fall outside these ranges depending on the nature of the work and resources required for completion.
All Contracted Projects
This category includes all contracted projects that the Institute has undertaken within the last several years.
The 33rd-66th percentile project costs range is $25,000 - $50,000.
Literature Reviews
This category includes projects that involved only a literature review or the cost for the portion of a larger project that included a literature review.
The 33rd-66th percentile project costs range is $15,000 - $20,000.
Surveys
This category includes all projects that had a survey as their primary component.
The 33rd-66th percentile project costs range is $28,000 - $55,000.