MEETING MATERIALS PACKET Supplemental Materials

Transcription

1 MEETING MATERIALS PACKET Supplemental Materials LIFE ACTUARIAL (A) TASK FORCE March 22 & 23, 2018 NAIC SPRING NATIONAL MEETING Milwaukee, Wisconsin

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3 TABLE OF CONTENT SUPPLEMENTAL PACKET PAGE March 22 & 23, 2018 Academy and SOA Comment on Guaranteed Issue Comparison Using Different Mortality Bases Academy and SOA Comment on Accelerated Underwriting Data Elements Academy Guaranteed Issue Valuation Table Discussion ACLI Comment on Accelerated Underwriting Data Elements 3

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5 March 21, 2018 Mr. Mike Boerner Chairperson, Life Actuarial Task Force National Association of Insurance Commissioners Re: Guaranteed Issue Reserve Comparison Using Different Mortality Bases Dear Mr. Boerner: The Guaranteed Issue Subgroup ( GI Subgroup ), a subgroup of the American Academy of Actuaries 1 Life Experience Committee and the Society of Actuaries 2 Preferred Mortality POG (the Joint Committee ) is submitting this response to the Life Actuarial Task Force s (LATF s) request for further analysis and reserve comparison of reserves for GI plans. As per your request, the reserves and projection year detail are provided, both in aggregate as well as well as for gender and age specific sample cells. Both mean and mid-terminal reserves are provided under the following mortality basis: GI table as proposed (with 2017 CSO loadings) CSO (current reserve basis) CSO (reserve basis effective for issues on or after 1/1/2020) CSO (reserve basis for Preneed insurance) GI Basic Table with flat 35% loading factor GI Basic Table with flat 45% loading factor GI Basic Table with flat 55% loading factor GI Basic Table with flat 75% loading factor The GI Subgroup looks forward to discussing the comparisons with LATF at the NAIC Winter Meeting on March 23, If you have need further information, please contact Ian Trepanier, Life Policy Analyst with the American Academy of Actuaries at trepanier@actuary.org. Sincerely, Mary Bahna-Nolan, MAAA, FSA, CERA Chairperson, Academy Life Experience Committee and SOA Preferred Mortality Project Oversight Group ( Joint Committee ). 1 The American Academy of Actuaries is a 19,000-member professional association whose mission is to serve the public and the U.S. actuarial profession. For more than 50 years, the Academy has assisted public policymakers on all levels by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets qualification, practice, and professionalism standards for actuaries in the United States. 2 The Society of Actuaries (SOA) is an educational, research and professional organization dedicated to serving the public, its members and its candidates. The SOA's mission is to advance actuarial knowledge and to enhance the ability of actuaries to provide expert advice and relevant solutions for financial, business and societal problems. The SOA's vision is for actuaries to be the leading professionals in the measurement and management of risk M Street NW Suite 300 Washington, DC Telephone Facsimile

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7 March 20, 2018 Mr. Mike Boerner Chairperson, Life Actuarial Task Force National Association of Insurance Commissioners Re: Accelerated Underwriting Data Elements Dear Mr. Boerner: The Accelerated Underwriting Project Oversight Group, ( AUW POG ), a subgroup of the American Academy of Actuaries 1 Life Experience Committee and the Society of Actuaries 2 Preferred Mortality POG (the Joint Committee ) is submitting this response to the feedback provided by Brian Bayerle on behalf of the American Council of Life Insurers ( ACLI ) on November 7, The AUW POG welcomes the input from the ACLI and fully appreciates the challenge facing the industry in regard to implementing the additional data fields requested to be added to VM-51 in. A critical challenge facing the life insurance industry is how to share experience in a meaningful and productive way. Being able to separate mortality into segments that make actuarial sense is a prerequisite in producing base experience data that is robust enough to be used from a regulatory and an industry perspective. We have looked again at the data elements our POG identified and made some changes for a few items. One needs to keep in mind that some elements may have limited usefulness by themselves but are more meaningful in combination with other elements and that is why those were kept. 1 The American Academy of Actuaries is a 19,000-member professional association whose mission is to serve the public and the U.S. actuarial profession. For more than 50 years, the Academy has assisted public policymakers on all levels by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets qualification, practice, and professionalism standards for actuaries in the United States. 2 The Society of Actuaries (SOA) is an educational, research and professional organization dedicated to serving the public, its members and its candidates. The SOA's mission is to advance actuarial knowledge and to enhance the ability of actuaries to provide expert advice and relevant solutions for financial, business and societal problems. The SOA's vision is for actuaries to be the leading professionals in the measurement and management of risk M Street NW Suite 300 Washington, DC Telephone Facsimile

8 The following represents the AUW POG s response to the considerations raised by the ACLI in their submission: 1. Inforce vs. New Business. ACLI: Availability of data will be considerably different between new business and inforce business. Inforce blocks, particularly acquired blocks, have far less data available compared to business written under newer underwriting programs. Prospective changes will allow for improved reporting for newly issued business. The older blocks however represent most of the current mortality experience, and it will be several years of reporting before experience on newer blocks is credible. AUW POG: We fully agree that it is unrealistic to expect the new data elements to be available for historical blocks of business issued years ago or for which a block of business had previously been acquired. However, those elements need to start being captured as soon as practicable, otherwise, the lack of available data will continue to emerge as an issue a few years down the road, well after companies have been using the elements in their underwriting decisions. The longer the period of time before data elements are collected, the more significant will be the mismatch between what is captured and what is used to determine mortality. A reasonable alternative is for companies that have looked back and digitized that historical information to start reporting it, and for others to start adapting their systems to the actuarial needs over a reasonable (3- to 5-year) period. 2. Data Images. ACLI: For many companies, the current underwriting process stores applications as a data image file, which is not machine readable. It is unlikely data can reliably be extracted from these files. Changes to these processes on a going forward basis would come at significant expense to companies. While processes for new business can be adopted to avoid the use of data images, this will remain an issue for inforce blocks. AUW POG: We agree this is an issue. In the context of accelerated underwriting, an electronic application is a very common, and useful, first step. 3. System separation. ACLI: Companies may have multiple systems that store the requested data fields, and these systems may not be integrated with the experience reporting systems. There may be significant time and resources necessary to achieve the level of integration necessary for reporting purposes. Additionally, some companies purposefully segregate administrative and underwriting data to strengthen control over sensitive information. AUW POG: This is a technology issue rather than a valid control issue as adequate controls should be built into the systems. We recognize there may be administrative challenges for 8

9 combining data from disparate systems; however, this is not a reason to believe the data lacks relevance and importance in driving mortality results, and believe companies should make an attempt to collect the data they are using to make decisions. 4. Volume increase. ACLI: The number of exposed data elements would increase the VM-51 field count from 46 to 195. Every change to the format requires considerable effort to code and validate updates and verify controls are working appropriately. As this request would quadruple the number of data fields, this would be a significant effort. AUW POG: Although numerically there is a big increase, solutions that the companies will develop will address many data elements at once (for instance all the elements related to the underwriting age and amount grid). 5. Collection of data elements. ACLI: As many accelerated underwriting programs are relatively new, some of the fields (such as use of wearables) are not collected by many of our member companies. AUW POG: Only if a data element is used by the company in the context of an accelerated underwriting program will it be collected; therefore, the data should be available. If the company does not use a particular data element, then the entry can be filled by N/A or the equivalent. 6. Question clarification. ACLI: Several current questions are really two questions in one; these can be split for greater clarification. Additionally, the range of responses should be considered and possibly expanded. Greater clarification can be given for some of the data fields, and what reasonable responses might be. AUW POG: We agree with the ACLI that removal of compound questions will add clarity and have tried to address clarification in the revisions. 7. Consumer privacy. ACLI: As more data fields are added to the experience reporting, it raises the possibility that insured data becomes more identifiable. Care needs to be given to balance the benefits derived from integrating data sources against the risks to consumer privacy. AUW POG: We do not believe any of the data elements requested make the insured more identifiable. We agree consumer privacy is of the utmost importance; however, we do not see this as an issue for the specific data elements requested. 9

10 8. Proprietary information. ACLI: Several of the data elements included in the request would constitute company-specific proprietary information on the underwriting practices of the company. AUW POG: We agree with the ACLI s concern regarding proprietary information. The AUW POG has attempted to address this concern by requesting generic types of data used rather than precise algorithms. This should provide no loss of proprietary information of significance. It is akin to knowing that a company uses weight in their underwriting algorithm. In no way does this requested data identify what thresholds or ratings are assigned for certain values a company may be using for weight. This safeguard should alleviate the concerns that insurance companies may have regarding loss of proprietary information. The AUW POG is currently working to refine and prioritize the data elements, recognizing a phasing approach may be more acceptable. The AUW POG will submit a revised listing for further discussion shortly. Meanwhile, for further information, please contact either Ian Trepanier at trepanier@actuary.org or Cynthia MacDonald at cmacdonald@soa.org. Respectfully, Jean-Marc Fix, FSA, MAAA, Co-chair, Joint American Academy of Actuaries Life Experience Committee and Society of Actuaries Preferred Mortality Oversight Group s Accelerated Underwriting POG Tony Litterer, FSA, MAAA, Co-chair, Joint American Academy of Actuaries Life Experience Committee and Society of Actuaries Preferred Mortality Oversight Group s Accelerated Underwriting POG Mary J. Bahna-Nolan, FSA, MAAA, CERA, Chair, Joint American Academy of Actuaries Life Experience Committee and Society of Actuaries Preferred Mortality Oversight Group cc: Reggie Mazyck, NAIC 10

11 3/21/2018 GUARANTEED ISSUE VALUATION TABLE DISCUSSION Mary Bahna Nolan, MAAA, FSA, CERA Chairperson, Academy Life Experience Committee and SOA Preferred Mortality Project Oversight Group ( Joint Committee ) 2018 Society of Actuaries. All rights reserved American Academy of Actuaries. All rights reserved. May not be reproduced without express permission. NAIC Fall Meeting November 30, 2017 There were three items from LATF regarding the guaranteed issue (GI) Tables Definition of GI in response to CA DOI submission/request for change In response to RGA s comment letter, follow up to see what can be done to reconcile differences in mortality levels and concern of submitter that business may not truly meet the definition of GI What would reserves look like using 1980 CSO Ultimate tables rather than the proposed Guaranteed Issue CSO Table? Would this cover the loading concern for certain blocks of business? American Academy of Actuaries. All rights reserved. May not be reproduced without express permission. 1 11

12 3/21/2018 The NAIC Joint Committee previously proposed both a basic (unloaded) and loaded forms of a Guaranteed Issue (GI) table Data from 11 contributing companies; The GI proposed tables were a good fit for data submitted to the study but data was heavily weighted to direct distribution The A/E with the expected basis equal to the basic GI table ranged from 79% to 250.1% To cover the mortality of 70% of the contributing companies, a loading or margin of approximately 56% would be required; to cover one additional company, a loading of nearly 118% would be needed The existing (and much lower) margin proposed in the exposed GI loaded table covered ~98% of the exposure within the study During the exposure period, one commenter raised concerns that the mortality level may not be sufficient for all GI forms of insurance. Further analysis was performed by the SOA to confirm the table is a good fit for the data submitted and verified that the data submitted was indeed guaranteed issue per the definition provided American Academy of Actuaries. All rights reserved. May not be reproduced without express permission. LATF requested further analysis to determine the impact to GI reserves of alternate table structures (e.g., 1980 CSO Ultimate tables) or whether a different loading level would produce reserves to cover a wider range of experience Using a model office with a single year of issues, both mean and mid terminal reserves were compared for the following: Originally proposed table: GI loaded table (2017 GI basic table with 2017 CSO loading) 1980 CSO Ultimate 2001 CSO Ultimate 2017 CSO Ultimate 2017 GI basic table with 55% level loading 2017 GI basic table with 75% level loading GI product was representative of competitive products in the market, including gender specific, uni smoke, demographic mix and benefit features such as return of premium for deaths occurring in early durations. The model office assumed $1 million of premium issued under a mix of business with 19% of the issues on annual mode (thus, mean reserves and mid terminal reserves are the same) and 81% on a monthly mode American Academy of Actuaries. All rights reserved. May not be reproduced without express permission. 2 12

13 3/21/2018 the mortality pattern and level for GI business is very different from the fully underwritten business underlying the CSO tables The GI with 2017 CSO loaded mortality rates (& other loadings) are significantly higher than both the 2001 CSO and the 2017 CSO Ultimate. This pattern recognizes the anti select mortality associated with GI issues in the early years post issue American Academy of Actuaries. All rights reserved. May not be reproduced without express permission. While the mortality pattern and level for GI business is very different from the fully underwritten business underlying the CSO tables, the impact on reserves is less dramatic 6 Reserve 2,400,000 2,200,000 2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , , , ,000 0 Comparison of projected mean reserves based on $1 million of gross premium and single year of issue 1980 CSO Mortality 2001 CSO Mortality 2017 CSO Mortality GI Ultimate Experience Mortality, 2017 CSO Loading GI Ultimate Experience Mortality, 55% Level Loading GI Ultimate Experience Mortality, 75% Level Loading End of Projection Year Ratio of Mean Reserves Under Potential Tables for GI to Reserves Using 2017 CSO Projection GI with 2017 GI w 55% GI w 75% Yr CSO Loading* Level Loading Level Loading 2001 CSO Ult 1980 CSO Ult 1 257% 324% 396% 219% 141% 5 115% 132% 140% 101% 122% % 111% 116% 98% 115% 15 97% 105% 109% 97% 112% 20 96% 103% 106% 96% 110% 30 97% 102% 104% 96% 108% 40 98% 102% 104% 96% 106% Despite the mortality differential between the various tables, the mean reserves do not differ significantly between the various tables, with the exception of the first 5 10 years American Academy of Actuaries. All rights reserved. May not be reproduced without express permission. 3 13

14 3/21/2018 Mid terminal reserves with modal unearned premium show a similar pattern as the mean reserves, though the reserve differentials are smaller Reserve 2,400,000 2,200,000 2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , , , ,000 0 Comparison of projected midterminal reserves with modal unearned premium based on $1 million of gross premium and single year of issue 1980 CSO Mortality 2001 CSO Mortality 2017 CSO Mortality GI Ultimate Experience Mortality, 2017 CSO Loading GI Ultimate Experience Mortality, 75% Level Loading GI Ultimate Experience Mortality, 55% Level Loading End of Projection Year Ratio of Mid terminal Reserves Under Potential Tables for GI to Reserves Using 2017 CSO Projection GI with 2017 GI w 55% GI w 75% Yr CSO Loading* Level Loading Level Loading 2001 CSO Ult 1980 CSO Ult 1 221% 281% 343% 167% 149% 5 109% 125% 132% 102% 120% 10 97% 107% 111% 99% 114% 15 95% 103% 106% 98% 111% 20 94% 101% 104% 97% 110% 30 96% 101% 103% 97% 108% 40 97% 101% 102% 97% 106% The higher the mortality level, the higher the net premium; this increases the reserves in early years but reduces them in later years. While there is significant variation in the reserves in the first 10 projection years, there is much less of a difference in later years, even with the higher mortality levels American Academy of Actuaries. All rights reserved. May not be reproduced without express permission. Guaranteed issue (GI) development considerations While a higher margin could be used, it would then be nearly double the level of mortality of certain carriers It is difficult to know or quantify the specific mortality for this segment of the market American Academy of Actuaries. All rights reserved. May not be reproduced without express permission. 4 14

15 3/21/2018 Considerations for GI Valuation (and Non forfeiture) Basis (1 of 2) With no further guidance for GI mortality, reserves and non forfeiture for GI business will be based on the 2017 CSO plus any additional asset adequacy reserves beginning in 2020 Some companies have already begun implementation of the 2017 CSO and have indicated it would be problematic to implement a different underlying basis. Though the 2001 CSO might not be problematic for reserves, it might be for cash values, for companies that have already begun implementing the 2017 CSO. Introducing a new GI specific table would lead to multiple implementations for GI carriers as they implement the 2017 CSO then the GI tables a few years later (e.g., 2017 CSO in 2020; new GI basis in 2023) American Academy of Actuaries. All rights reserved. May not be reproduced without express permission. Considerations for GI Valuation (and Non forfeiture) Basis (2 of 2) Despite the mortality differentials, the reserves do not vary significantly after the first projection years The reserves using either the 2017 CSO table or the 2001 CSO table will understate the reserve in the early durations as the mortality ignores the anti select early duration mortality The reserves using the exposed GI specific mortality table (with the 2017 CSO loading) will likely understate the reserves in later durations A substantial loading to the GI basic experience (in excess of 55%) results in to the underlying experience from the GI study and may result in excessive reserves for certain large carriers for certain years American Academy of Actuaries. All rights reserved. May not be reproduced without express permission. 5 15

16 3/21/2018 Recommendation While a specific valuation table for GI business is preferable, it is not necessarily practical given the timing and level of differentiation from one of the existing mortality basis. Therefore, one of two approaches is recommended: 1. Keep the reserve basis as the 2017 CSO Ultimate, but add a percentage loading or scalar to the reserve that grades off over 10 years to reflect the anti select mortality pattern of GI issued business exhibited in the underlying industry study. Multiplier to be finalized shortly 2. Keep the reserve basis as the 2017 CSO Ultimate and determine any excess reserves via asset adequacy testing American Academy of Actuaries. All rights reserved. May not be reproduced without express permission. Contact Information Mary Bahna Nolan, MAAA, FSA, CERA Chairperson, Academy Life Experience Committee and SOA Preferred Mortality Project Oversight Group ( Joint Committee ) (O) (C) Ian Trepanier Life Policy Analyst American Academy of Actuaries Trepanier@actuary.org American Academy of Actuaries. All rights reserved. May not be reproduced without express permission. 6 16

17 Brian Bayerle Senior Actuary November 7, 2017 Mr. Mike Boerner Chair, NAIC Life Actuarial Task Force Re: Accelerated Underwriting Data Elements Dear Mike: The American Council of Life Insurers (ACLI) 1 appreciates the opportunity to comment on the exposed Accelerated Underwriting Data Elements on behalf of our member companies. We encourage the ongoing development of standard mortality tables by the Society of Actuaries and the American Academy of Actuaries. We understand and appreciate the need to reflect recent, underwriting appropriate experience in mortality table construction. To facilitate the request that LATF put forth, we surveyed our member companies regarding their ability to provide additional data fields. High level results of the responses for the exposed data elements are included as Appendix A. Data elements that had a low perceived experience value or are expected to take longer than 6 months to report are highlighted. We note the following considerations related to this request: 1. Inforce Versus New Business: Availability of data will be considerably different between new business and inforce business. Inforce blocks, particularly acquired blocks, have far less data available compared to business written under newer underwriting programs. Prospective changes will allow for improved reporting for newly issued business. The older blocks however represent most of the current mortality experience, and it will be several years of reporting before experience on newer blocks is credible. 2. Data Images: For many companies, the current underwriting process stores applications as a data image file, which is not machine readable. It is unlikely data can reliably be extracted from these files. Changes to these processes on a going forward basis would come at significant expense to companies. While processes for new business can be adopted to avoid the use of data images, this will remain an issue for inforce blocks. 3. System Separation: Companies may have multiple systems that store the requested data fields, and these systems may not be integrated with the experience reporting systems. There may be significant time and resources necessary to achieve the level of integration necessary for 1 ACLI is a Washington, D.C.-based trade association with approximately 290 member companies operating in the United States and abroad. ACLI advocates in state, federal, and international forums for public policy that supports the industry marketplace and the 75 million American families that rely on life insurers products for financial and retirement security. ACLI members offer life insurance, annuities, retirement plans, long-term care and disability income insurance, and reinsurance, representing 95 percent of industry assets, 93 percent of life insurance premiums, and 98 percent of annuity considerations in the United States. Learn more at American Council of Life Insurers 101 Constitution Avenue, NW, Washington, DC (202) brianbayerle@acli.com 17

18 2 reporting purposes. Additionally, some companies purposefully segregate administrative and underwriting data to strengthen control over sensitive information. 4. Volume Increase: The number of exposed data elements would increase the VM-51 field count from 46 to 195. Every change to the format requires considerable effort to code and validate updates and verify controls are working appropriately. As this request would quadruple the number of data fields, this would be a significant effort. 5. Collection of Data Elements: As many accelerated underwriting programs are relatively new, some of the fields (such as use of wearables) are not collected by many of our member companies. 6. Question Clarification: Several current questions are really two questions in one; these can be split for greater clarification. Additionally, the range of responses should be considered and possibly expanded. Greater clarification can be given for some of the data fields, and what reasonable responses might be. 7. Consumer Privacy: As more data fields are added to the experience reporting, it raises the possibility that insured data becomes more identifiable. Care needs to be given to balance the benefits derived from integrating data sources against the risks to consumer privacy. 8. Proprietary Information: Several of the data elements included in the request would constitute company-specific proprietary information on the underwriting practices of the company. Consideration should be given on how best to use and implement any new tables developed using the additional data elements. The amount and type of underwriting data needed to bifurcate the types of underwriting varies from company to company. Building out an Underwriting Decision Tool may not be feasible for simplified or accelerated underwritten business. Moreover, additional mortality tables will require specific guidance for nonforfeiture values and policyholder taxation. We look forward to a discussion of these issues. Sincerely, cc Reggie Mazyck, NAIC 18

19 Appendix A - ACLI Survey Results Request Item Data Element Description Experience reporting value Response Currently Available? Time to reportability 12 Smoker Definition 1 = Cigarette (e.g. cigarette, cigar, etc.)2 = Tobacco (#1 and chewing tobacco)3 = Nicotine (#1 or #2 with gum and/or patch)4 = Other High: 75% Medium: 15% Low: 10% Yes - all business: 32% Yes - new business only: 26% No: 5% Less than 6 months: 88% More than 6 months: 6% Never/difficult to provide: 6% 13 Smoker Period Definition Number of years to qualify for non-smoker / nontobacco, may vary be risk class of the insured High: 35% Medium: 55% Low: 10% Yes - all business: 32% Yes - all directly written business: 16% Yes - new business only: 16% Other combination: 21% No: 16% Less than 6 months: 76% More than 6 months: 6% Never/difficult to provide: 18% 14 Marijuana User Definition Marijuana user is classified as:1 = Non-smoker2 = Smoker (as defined in #12)3 = Nonsmoker or smoker based on frequency of use4 = Non-smoker if medical use or smoker if recreational use5 = Other 39 COLI /BOLI 1 = Not classified as COLI / BOLI Policy2 = Classified as COLI / BOLI Policy High: 26% Medium: 42% Low: 32% High: 30% Medium: 45% Low: 25% Yes - all business: 17% Yes - new business only: 22% Other combination: 11% No: 44% Yes - all business: 44% Yes - all directly written business: 17% Yes - new business only: 6% Other combination: 6% No: 28% Less than 6 months: 63% More than 6 months: 6% Never/difficult to provide: 25% Less than 6 months: 67% More than 6 months: 6% Never/difficult to provide: 17% 61 Policy Form Number Text input High: 5% Medium: 15% Low: 80% 62 Application Form Number Text input High: 0% Medium: 20% Low: 80% 63 Distribution Channel 1 = Affiliated Agents / Captive Agency2 = Independent Agents3 = Broker4 = Direct-to-Consumer (On-Line)5 = Direct-to-Consumer (Mail)6 = Direct-to- Consumer (Call Center)7 = Direct-to-Consumer (Other)8 = Banks 9 = Other High: 55% Yes - all business: 47% Yes - new business only: 16% Other combination: 11% No: 16% Yes - all business: 32% Yes - new business only: 16% Other combination: 11% No: 37% Yes - all business: 58% Yes - new business only: 26% Other combination: 5% No: 0% Less than 6 months: 74% More than 6 months: 11% Never/difficult to provide: 11% Less than 6 months: 47% More than 6 months: 21% Never/difficult to provide: 26% Less than 6 months: 94% More than 6 months: 6% Never/difficult to provide: 0% 64 Third Party Marketing 0 = Available to the Public without restriction1 = Group affiliation (e.g. Bank, Alumni Association, Group Membership etc.)2 = Worksite Marketing3 = Life Event Marketing4 = Other High: 0% Medium: 45% Low: 45% Yes - all business: 37% Yes - all directly written business: 0% Yes - new business only: 11% Other combination: 11% No: 42% Less than 6 months: 47% More than 6 months: 12% Never/difficult to provide: 41% 19

20 Appendix A - ACLI Survey Results Request Item Data Element Description Experience reporting value Response Currently Available? Time to reportability 65 Is financial data, on any kind, used in a marketing prescreening process? 0 = No1 = Yes - Individual2 = Yes - Household3 = Unknown 66 Type of Application 0 = Paper 1 = Electronic (Fillable PDF)2 = Online Internet3 = Phone Application High: 5% Medium: 20% Low: 70% High: 15% Medium: 40% Low: 35% Yes - all business: 16% Yes - all directly written business: 0% Yes - new business only: 11% Other combination: 11% No: 63% Yes - all business: 26% Yes - new business only: 37% Other combination: 16% No: 11% Less than 6 months: 18% More than 6 months: 29% Never/difficult to provide: 53% Less than 6 months: 71% More than 6 months: 29% Never/difficult to provide: 0% 67 Was the application designed with Sentinel Value or Behavioral Economic considerations? 0 = No1 = Yes High: 10% Medium: 45% Low: 45% Yes - all business: 16% Yes - all directly written business: 0% Yes - new business only: 16% Other combination: 16% No: 47% Less than 6 months: 39% More than 6 months: 22% Never/difficult to provide: 39% 68 Third Party Present at the time of sale or when collecting medical data 69 How many questions do you have on the medical part 2 section of your application? 0 = Commissioned Representative1 = Noncommissioned Representative2 = Non-Commissioned Professions (Para-Med Professional, Physician) High: 10% Low: 55% If no medical questions, answer 0. High: 26% Medium: 37% Low: 32% Yes - all business: 16% Yes - all directly written business: 0% Yes - new business only: 11% Other combination: 21% No: 53% Yes - all business: 17% Yes - new business only: 33% Other combination: 28% No: 11% Less than 6 months: 39% More than 6 months: 6% Never/difficult to provide: 56% Less than 6 months: 71% More than 6 months: 18% Never/difficult to provide: 12% 70 How many maladies are specified in the application Count maladies in all questions. High: 32% Medium: 32% Low: 32% Yes - all business: 17% Yes - new business only: 33% Other combination: 28% No: 11% Less than 6 months: 71% More than 6 months: 18% Never/difficult to provide: 12% 71 Do you have a reflexive aspect to your application? 72 Are applicants underwritten based on the same requirements? 0 = No1 = Yes High: 32% Medium: 32% Low: 37% 0 = Requirements vary by Issue Age or Coverage Amount1 = Additional Requirements ordered for Cause Only2 = Requirements do not vary High: 32% Medium: 32% Low: 32% Yes - all business: 17% Yes - all directly written business: 0% Yes - new business only: 44% Other combination: 17% No: 22% Yes - all business: 33% Yes - new business only: 33% Other combination: 22% No: 6% Less than 6 months: 71% More than 6 months: 12% Never/difficult to provide: 18% Less than 6 months: 76% More than 6 months: 18% Never/difficult to provide: 6% 20

21 Appendix A - ACLI Survey Results Request Item Data Element Description Experience reporting value Response Currently Available? Time to reportability 73 Life Style Questions: Occupation 74 Life Style Questions: Avocation 75 Life Style Questions: Driving record 76 Was the initial application processed in good order? 77 Application Signed Date 0 = No1 = Yes, included on the application2 = Yes, Reflexive Question3 = Actively at work question only 0 = No1 = Yes, included on the application2 = Yes, Reflexive Question 0 = No1 = Yes, included on the application2 = Yes, Reflexive Question 0 = No - Returned to Agent1 = No - Referred to Internal Unit 2 = Yes High: 26% Medium: 47% Low: 21% High: 32% Medium: 47% Low: 16% High: 42% Medium: 42% Low: 11% High: 0% Medium: 5% Low: 95% YYYYMMDD High: 5% Medium: 10% Low: 85% Yes - all business: 17% Yes - new business only: 33% Other combination: 28% No: 17% Yes - all business: 17% Yes - new business only: 33% Other combination: 28% No: 17% Yes - all business: 17% Yes - new business only: 33% Other combination: 28% No: 17% Yes - all business: 16% Yes - all directly written business: 0% Yes - new business only: 26% Other combination: 21% No: 37% Yes - all business: 26% Yes - new business only: 32% Other combination: 21% No: 11% Less than 6 months: 53% More than 6 months: 29% Never/difficult to provide: 18% Less than 6 months: 47% More than 6 months: 29% Never/difficult to provide: 24% Less than 6 months: 47% More than 6 months: 35% Never/difficult to provide: 18% Less than 6 months: 28% More than 6 months: 22% Never/difficult to provide: 50% Less than 6 months: 67% More than 6 months: 11% Never/difficult to provide: 22% 78 Date of First Underwriting Requirement Requested 79 Date of Final Underwriter Decision 80 Date Final Action Determined (Policy Issued, Decline Letter Sent) YYYYMMDD High: 0% Medium: 10% Low: 85% YYYYMMDD High: 0% Medium: 15% Low: 80% YYYYMMDD High: 5% Medium: 15% Low: 75% 81 Height Source 1 = App2 = E-Health Records3 = Paramed4 = APS5 = OtherAllow to multiple options High: 21% Medium: 37% Low: 37% Yes - all business: 26% Yes - new business only: 32% Other combination: 21% No: 16% Yes - all business: 32% Yes - new business only: 37% Other combination: 16% No: 11% Yes - all business: 37% Yes - new business only: 37% Other combination: 11% No: 11% Yes - all business: 22% Yes - new business only: 17% Other combination: 28% No: 22% Less than 6 months: 50% More than 6 months: 22% Never/difficult to provide: 28% Less than 6 months: 67% More than 6 months: 17% Never/difficult to provide: 17% Less than 6 months: 78% More than 6 months: 11% Never/difficult to provide: 11% Less than 6 months: 47% More than 6 months: 24% 21

22 Appendix A - ACLI Survey Results Request Item Data Element Description Experience reporting value Response Currently Available? Time to reportability 82 Weight Source 1 = App2 = E-Health Records3 = Paramed4 = APS5 = OtherAllow to multiple options High: 21% Medium: 37% Low: 37% Yes - all business: 22% Yes - new business only: 17% Other combination: 28% No: 22% Less than 6 months: 47% More than 6 months: 24% 83 Smoking status source 1 = App2 = E-Health Records3 = Paramed4 = APS5 = OtherAllow to multiple options High: 42% Medium: 21% Low: 32% 84 MIB - Asked 0 = No1 = YesBlank = Unknown High: 25% Medium: 35% Low: 40% 85 MIB - HIT 0 = No1 = Yes - Insurance Activity Information2 = Yes - Medical3 = BothBlank = unknown 86 Prescription History Data Requested 87 Prescription History Data Received 88 Prescription Severity Flag 89 Prescription Scoring Algorithm 90 Prescription Rating Provided Automatically High: 40% Medium: 50% Low: 10% 0 = No1 = YesBlank = unknown High: 35% Medium: 35% Low: 30% 0 = No1 = Hit with drugs2 = Hit with no drugsblank = unknown High: 60% Medium: 30% Low: 10% 0 = No1 = YesBlank = Unknown High: 53% Medium: 26% Low: 21% 0 = No1 = YesBlank = Unknown High: 32% Medium: 32% Low: 37% 0 = No1 = Numerical Score2 = Severity Group3 = BothBlank = Unknown High: 16% Medium: 47% Low: 37% Yes - all business: 22% Yes - new business only: 22% Other combination: 22% No: 28% Yes - all business: 33% Yes - new business only: 22% Other combination: 17% No: 17% Yes - all business: 21% Yes - new business only: 37% Other combination: 21% No: 16% Yes - all business: 17% Yes - new business only: 28% Other combination: 28% No: 22% Yes - all business: 16% Yes - new business only: 37% No: 16% Yes - all business: 5% Yes - new business only: 26% No: 37% Yes - new business only: 16% Other combination: 32% No: 37% Yes - all business: 5% Yes - new business only: 21% Other combination: 21% No: 47% Less than 6 months: 47% More than 6 months: 24% Less than 6 months: 59% More than 6 months: 24% Never/difficult to provide: 18% Less than 6 months: 56% More than 6 months: 33% Never/difficult to provide: 11% Less than 6 months: 47% More than 6 months: 18% Less than 6 months: 44% More than 6 months: 39% Never/difficult to provide: 11% Less than 6 months: 33% More than 6 months: 28% Never/difficult to provide: 33% Less than 6 months: 29% More than 6 months: 29% Never/difficult to provide: 35% Less than 6 months: 29% More than 6 months: 12% Never/difficult to provide: 53% 22

23 Appendix A - ACLI Survey Results Request Item Data Element Description Experience reporting value Response Currently Available? Time to reportability 91 Blood Pressure Source 1 = App2 = E-Health Records3 = Paramed4 = APS5 = OtherAllow to multiple options High: 21% Medium: 32% Low: 42% Yes - all business: 17% Yes - new business only: 17% Other combination: 28% No: 28% Less than 6 months: 35% More than 6 months: 24% Never/difficult to provide: 41% 92 Motor Vehicle Records Requested 93 Motor Vehicle Records Hit 94 Attending Physician Statement 0 = No1 = Yes2 = WaivedBlank = Unknown High: 30% Medium: 30% Low: 40% 0 = No1 = Yes, but not used2 = Yes, meaningful or scoring systemblank = unknown 0 = No1 = Yes - Received2 = Yes - WaivedBlank = Unknown High: 55% Medium: 30% High: 65% Low: 10% Yes - all business: 28% Yes - new business only: 39% Other combination: 22% No: 6% Yes - all business: 21% Yes - new business only: 32% No: 16% Yes - all business: 17% Yes - new business only: 33% Other combination: 28% No: 11% Less than 6 months: 59% More than 6 months: 24% Never/difficult to provide: 18% Less than 6 months: 50% More than 6 months: 28% Never/difficult to provide: 22% Less than 6 months: 41% More than 6 months: 29% 95 Para-Medical Exam 0 = No1 = Yes - Received2 = Yes - WaivedBlank = Unknown High: 65% Medium: 20% Yes - all business: 22% Yes - new business only: 39% Other combination: 17% No: 11% Less than 6 months: 47% More than 6 months: 24% 96 Physician Exam 0 = No1 = Yes - Received2 = Yes - WaivedBlank = Unknown High: 65% Medium: 20% Yes - all business: 17% Yes - new business only: 39% Other combination: 17% No: 17% Less than 6 months: 47% More than 6 months: 24% 97 Tele-Underwriting 0 = No1 = Yes - Received2 = Yes - WaivedBlank = Unknown High: 63% Medium: 21% Low: 16% Yes - all business: 12% Yes - all directly written business: 12% Yes - new business only: 47% Other combination: 12% No: 18% Less than 6 months: 40% More than 6 months: 33% Never/difficult to provide: 27% 98 Personal History Interview 0 = No1 = Yes - Received2 = Yes - WaivedBlank = Unknown High: 58% Medium: 16% Low: 26% Yes - all business: 24% Yes - all directly written business: 12% Yes - new business only: 35% Other combination: 12% No: 18% Less than 6 months: 38% More than 6 months: 25% Never/difficult to provide: 38% 23

24 Appendix A - ACLI Survey Results Request Item Data Element Description Experience reporting value Response Currently Available? Time to reportability 99 Blood Sample 0 = No1 = Yes - Received2 = Yes - WaivedBlank = Unknown High: 65% Medium: 20% Yes - all business: 16% Yes - new business only: 37% No: 11% Less than 6 months: 50% More than 6 months: 22% Never/difficult to provide: 28% 100 Urine Sample 0 = No1 = Yes - Received2 = Yes - WaivedBlank = Unknown High: 65% Medium: 20% Yes - all business: 16% Yes - new business only: 37% No: 11% Less than 6 months: 50% More than 6 months: 22% Never/difficult to provide: 28% 101 Saliva Sample 0 = No1 = Yes - Received2 = Yes - WaivedBlank = Unknown High: 55% Medium: 15% Low: 30% Yes - all business: 17% Yes - new business only: 28% Other combination: 22% No: 22% Less than 6 months: 35% More than 6 months: 24% Never/difficult to provide: 41% 102 Stress Test 0 = No1 = Yes - Received2 = Yes - WaivedBlank = Unknown High: 45% Low: 30% Yes - all business: 17% Yes - new business only: 28% Other combination: 28% No: 17% Less than 6 months: 41% More than 6 months: 18% Never/difficult to provide: 41% 103 Cholesterol Source 1 = App2 = E-Health Records3 = Paramed4 = APS5 = OtherAllow for multiple options High: 25% Low: 45% Yes - new business only: 26% No: 26% Less than 6 months: 39% More than 6 months: 22% Never/difficult to provide: 39% 104 Electronic Health Data Records 0 = No1 = Yes - Received2 = Yes - WaivedBlank = Unknown High: 35% Low: 40% Yes - all business: 5% Yes - new business only: 5% Other combination: 16% No: 63% Less than 6 months: 11% More than 6 months: 28% Never/difficult to provide: 61% 105 Predictive Analytics for Marketing Selection (Lead Generation) 106 Predictive Analytics for Underwriting Triage or Risk Classification 0 = No1 = Yes, Developed Internally2 = Yes, Developed by Reinsurer3 = Yes, Developed by VendorBlank = Unknown 0 = No1 = Yes, Developed Internally2 = Yes, Developed by Reinsurer3 = Yes, Developed by VendorBlank = Unknown High: 25% Low: 50% High: 60% Low: 10% Yes - all directly written business: 0% Yes - new business only: 11% Other combination: 6% No: 72% Yes - all business: 28% Yes - all directly written business: 0% Yes - new business only: 17% Other combination: 22% No: 33% Less than 6 months: 27% More than 6 months: 20% Never/difficult to provide: 53% Less than 6 months: 63% More than 6 months: 19% Never/difficult to provide: 19% 24

25 Appendix A - ACLI Survey Results Request Item Data Element Description Experience reporting value Response Currently Available? Time to reportability 107 Financial Data (Income and Assets information on the Application) 0 = No1 = YesBlank = Unknown High: 30% Medium: 50% Yes - all business: 18% Yes - all directly written business: 12% Yes - new business only: 35% Other combination: 24% No: 12% Less than 6 months: 44% More than 6 months: 31% Never/difficult to provide: 25% 108 Credit Data 0 = No1 = YesBlank = Unknown High: 42% Medium: 32% Low: 26% 109 Credit Score 0 = No1 = YesBlank = Unknown High: 37% Medium: 26% Low: 37% 110 Field Underwriting (Impairment or Rx Knockouts) 0 = No1 = YesBlank = Unknown High: 22% Medium: 39% Low: 39% 111 Wearable Technology 0 = No1 = YesBlank = Unknown High: 11% Medium: 17% Low: 72% 112 Facial Aging Technology 113 Other New Technology or Data 114 After the policy is issued, is monitoring employed? 115 Annual Premium Rate, without policy fee 0 = No1 = YesBlank = Unknown High: 11% Medium: 11% Low: 78% Text Input, List Other Data Sources High: 11% Medium: 21% Low: 68% 0 = No or None1 = Yes, Prescription Data2 = Yes, Attending Physican Statement3 = Yes, Both 4 = Other High: 32% Medium: 32% Low: 32% Value High: 30% Low: 45% Yes - new business only: 11% Other combination: 21% No: 53% Yes - all business: 5% Yes - new business only: 11% Other combination: 16% No: 63% Yes - all business: 12% Yes - new business only: 24% Other combination: 12% No: 41% Yes - all business: 17% Yes - all directly written business: 0% Yes - new business only: 6% Other combination: 6% No: 72% Yes - all business: 17% Yes - all directly written business: 0% Yes - new business only: 6% Other combination: 6% No: 72% Yes - all business: 17% Yes - all directly written business: 0% Yes - new business only: 11% Other combination: 6% No: 67% Yes - all directly written business: 0% Yes - new business only: 22% Other combination: 17% No: 50% Yes - all business: 63% Yes - new business only: 16% Other combination: 11% No: 5% Less than 6 months: 24% More than 6 months: 29% Never/difficult to provide: 47% Less than 6 months: 25% More than 6 months: 19% Never/difficult to provide: 56% Less than 6 months: 50% More than 6 months: 14% Never/difficult to provide: 36% Less than 6 months: 27% More than 6 months: 13% Never/difficult to provide: 60% Less than 6 months: 27% More than 6 months: 13% Never/difficult to provide: 60% Less than 6 months: 27% More than 6 months: 13% Never/difficult to provide: 60% Less than 6 months: 19% More than 6 months: 38% Never/difficult to provide: 38% Less than 6 months: 88% More than 6 months: 6% Never/difficult to provide: 6% 25

26 Appendix A - ACLI Survey Results Request Item Data Element Description Experience reporting value Response Currently Available? Time to reportability 116 Policy Fee Value High: 15% Low: 60% Yes - all business: 58% Yes - new business only: 16% Other combination: 11% No: 5% Less than 6 months: 88% More than 6 months: 6% Never/difficult to provide: 6% 117 Underwriting Grid Identifier Text High: 39% Medium: 11% Low: 50% 118 Issue Age Group Text High: 42% Medium: 21% Low: 37% 119 Diastolic Blood Pressure Numerical Value High: 55% Low: 20% 120 Diastolic Treatment 0 = Not Treated1 = Treated2 = Unknown High: 40% Medium: 35% Low: 25% 121 Systolic Blook Pressure Numerical Value High: 55% Low: 20% 122 Systolic Treatment 0 = Not Treated1 = Treated2 = Unknown High: 42% Medium: 32% Low: 26% 123 Height Numerical Value High: 60% Medium: 20% Low: 20% 124 Height Source 0 = Self Reported1 = Independently Taken2 = Other High: 20% Medium: 45% Low: 35% Yes - all business: 17% Yes - new business only: 33% Other combination: 17% No: 22% Yes - all business: 50% Yes - new business only: 28% Other combination: 11% No: 6% Yes - all business: 5% Yes - new business only: 32% Other combination: 32% No: 26% Yes - all business: 0% Yes - new business only: 28% Other combination: 28% No: 39% Yes - all business: 5% Yes - new business only: 32% Other combination: 32% No: 26% Yes - all business: 0% Yes - new business only: 28% Other combination: 28% No: 39% Yes - all business: 16% Yes - new business only: 37% No: 16% Yes - new business only: 33% Other combination: 33% No: 17% Less than 6 months: 47% More than 6 months: 24% Never/difficult to provide: 18% Less than 6 months: 71% More than 6 months: 24% Never/difficult to provide: 6% Less than 6 months: 39% More than 6 months: 22% Never/difficult to provide: 33% Less than 6 months: 19% More than 6 months: 31% Never/difficult to provide: 44% Less than 6 months: 39% More than 6 months: 22% Never/difficult to provide: 33% Less than 6 months: 19% More than 6 months: 31% Never/difficult to provide: 44% Less than 6 months: 47% More than 6 months: 24% Less than 6 months: 44% More than 6 months: 31% Never/difficult to provide: 25% 26

27 Appendix A - ACLI Survey Results Request Item Data Element Description Experience reporting value Response Currently Available? Time to reportability 125 Weight Numerical Value High: 65% Medium: 20% 126 Weight Source 0 = Self Reported1 = Independently Taken2 = Other High: 15% Medium: 50% Low: 35% 127 LDL Numerical Value High: 60% 128 LDL Source 0 = Not Treated1 = Treated2 = Unknown High: 32% Medium: 37% Low: 32% 129 HDL Numerical Value High: 60% 130 HDL Source 0 = Not Treated1 = Treated2 = Unknown High: 32% Medium: 37% Low: 32% 131 Cholesterol Total Numerical Value High: 60% 132 Cholesterol Total Source 133 Driving Record - Moving Violations 0 = Not Treated1 = Treated2 = Unknown High: 32% Medium: 37% Low: 32% Number High: 50% Medium: 30% Low: 20% Yes - all business: 16% Yes - new business only: 37% No: 16% Yes - new business only: 33% Other combination: 33% No: 17% Yes - all business: 5% Yes - new business only: 32% Other combination: 32% No: 26% Yes - all business: 0% Yes - new business only: 28% Other combination: 33% No: 33% Yes - all business: 5% Yes - new business only: 32% Other combination: 32% No: 26% Yes - all business: 0% Yes - new business only: 28% Other combination: 33% No: 33% Yes - all business: 5% Yes - new business only: 32% Other combination: 32% No: 26% Yes - all business: 0% Yes - new business only: 28% Other combination: 33% No: 33% Yes - all business: 5% Yes - new business only: 32% No: 32% Less than 6 months: 47% More than 6 months: 24% Less than 6 months: 44% More than 6 months: 31% Never/difficult to provide: 25% Less than 6 months: 39% More than 6 months: 22% Never/difficult to provide: 33% Less than 6 months: 25% More than 6 months: 38% Never/difficult to provide: 31% Less than 6 months: 39% More than 6 months: 22% Never/difficult to provide: 33% Less than 6 months: 25% More than 6 months: 38% Never/difficult to provide: 31% Less than 6 months: 39% More than 6 months: 22% Never/difficult to provide: 33% Less than 6 months: 25% More than 6 months: 38% Never/difficult to provide: 31% Less than 6 months: 33% More than 6 months: 28% Never/difficult to provide: 33% 27

28 Appendix A - ACLI Survey Results Request Item Data Element Description Experience reporting value Response Currently Available? Time to reportability 134 Driving Record - Moving Violations - Look back years 135 Driving Record - Driving Under the Influence - Reckless Driving (DUI-RD) 136 Driving Record - Driving Under the Influence - Reckless Driving (DUI-RD) - Look back years Number High: 45% Medium: 35% Low: 20% Number High: 60% Number High: 53% Medium: 30% Low: 18% Yes - all business: 0% Yes - new business only: 26% No: 42% Yes - all business: 5% Yes - new business only: 26% No: 37% Yes - all business: 8% Yes - new business only: 26% Other combination: 29% No: 32% Less than 6 months: 29% More than 6 months: 24% Never/difficult to provide: 41% Less than 6 months: 28% More than 6 months: 28% Never/difficult to provide: 39% Less than 6 months: 28% More than 6 months: 28% Never/difficult to provide: 39% 136 Family History - Relationship 137 Family History - Age at Death 138 Family History - Age at Diagnosis 139 Family History - Disease 140 repeat as necessary for each relative and disease 141 Personal History - Cancer Text High: 53% Medium: 30% Low: 18% Number High: 55% Low: 20% Number High: 50% Low: 25% Text High: 55% Low: 20% High: 44% Medium: 38% Low: 19% Text High: 65% Medium: 20% Yes - all business: 8% Yes - new business only: 26% Other combination: 29% No: 32% Yes - new business only: 21% Other combination: 32% No: 32% Yes - all business: 0% Yes - new business only: 26% No: 42% Yes - all business: 5% Yes - new business only: 26% Other combination: 32% No: 32% Yes - all business: 8% Yes - all directly written business: 0% Other combination: 38% No: 23% Yes - new business only: 26% Other combination: 32% No: 26% Less than 6 months: 28% More than 6 months: 28% Never/difficult to provide: 39% Less than 6 months: 21% More than 6 months: 32% Never/difficult to provide: 42% Less than 6 months: 12% More than 6 months: 29% Never/difficult to provide: 53% Less than 6 months: 22% More than 6 months: 28% Never/difficult to provide: 44% Less than 6 months: 25% More than 6 months: 33% Never/difficult to provide: 42% Less than 6 months: 22% More than 6 months: 33% Never/difficult to provide: 39% 28