LDTI

Our solutions
Subcohort treatment

How can we help?

Moody’s offers solutions for LDTI that redefine efficiency and integration with a modular, end-to-end solution to address your specific needs.

Seamless integration

We give you the flexibility to integrate the necessary software components to fulfill your individual requirements and save on your upfront technology and modeling investments.

Modernize

Our future-ready technology is cloud-enabled, highly scalable, modular, and designed to address LDTI’s demanding data volume and performance requirements.

Speak to our team today

Interested in learning more about our offerings? Our solutions specialists are ready to help.

Get in touch

RiskIntegrity for LDTI

The RiskIntegrity™ for LDTI solution integrates with your existing infrastructure to connect data, models, systems, and processes between actuarial and accounting functions.

Featured solutions

With more than 30 years’ experience in the life insurance market and a service model tested and valued by a broad, global community of customers, we are the leading provider of actuarial modeling in the United States and Canada.

01 AXIS actuarial system
02 AXIS US GAAP LDTI Link module
03 RiskIntegrity for LDTI

01 AXIS actuarial system

AXIS actuarial system

The AXIS™ actuarial system is a powerful modeling solution insurers, reinsurers, and consultants use for actuarial analysis of life insurance and annuity business. The AXIS actuarial system delivers performance, ease of implementation, flexibility, robustness, scalability, and transparency at lower cost of use.

The AXIS system provides flexibility to deploy large-scale computing power through an advanced cloud-based delivery platform or installed software.

Download brochure (English)

Download brochure (German)

Download brochure (Spanish)

02 AXIS US GAAP LDTI Link module

AXIS US GAAP LDTI Link module

The AXIS actuarial system, including the new AXIS US GAAP LDTI Link module, delivers improved enterprise-level control, auditability, scalability, reporting flexibility, and end-to-end automation as demanded by the new US GAAP standards, as well as other new frameworks.

Download brochure

03 RiskIntegrity for LDTI

RiskIntegrity for LDTI

Moody’s RiskIntegrity for LDTI solution helps insurance companies address the updated FASB requirements for long-duration insurance contracts and helps insurers make the transition to the new standard.

Additionally, it helps insurers kick-start their actuarial and accounting modernization efforts as they prepare for LDTI with a modular, end-to-end solution that improves the record-to-reporting process.

Download brochure

Subcohort treatment

In this video we explain how to manage calculations and accounting at subcohort level while staying compliant with LDTI, having the cohort as the unit of account.

LDTI requires additional specific disclosures on cohorts where an immediate charge is recognized and the net premium ratio is capped to 100%. In this video we discuss what to disclose for maximum benefit.

LDTI requires a comparison of actual versus expected cash flows split across mortality, morbidity, and lapses. In this video we explore multiple ways to present this analysis.

ASU 2018-12 impacts

The changes from FASB update ASU 2018-12, also known as targeted improvements for long-duration contracts, are significant and introduce new reporting complexities.

01 Compliance
02 Model and risk governance
03 Accounting and actuarial data management
04 Roll forwards, financial statements, and accounting
05 Management information demand

01 Compliance

Compliance

Accounting policy decisions: Before implementing the standard, insurers must understand it and make important decisions about how the standard applies to their businesses. For example, how should deferred acquisition costs be amortized? What level of aggregation will be used in developing cohort groupings? Decisions such as these will drive the implementation approach that follows.

02 Model and risk governance

Model and risk governance

Assumption management: Under LDTI, actuarial assumptions must be monitored closely and updated at least annually. A process must be in place to make sure that assumption updates are made accurately, on time, and as part of a strong governance framework.

Experience studies: Firms must consider whether to undertake efforts to formalize experience studies and how that workstream should be integrated into their valuation processes.

03 Accounting and actuarial data management

Accounting and actuarial data management

Model input: Calculations for the liability for future policy benefits and several other actuarial balances require historical unlocking of actuarial assumptions by incorporating actual past cash flows. While this concept is familiar to many insurers who currently perform retrospective estimated gross profit unlocking, many firms are taking the opportunity to re-engineer existing processes related to data collection and management.

Model output: Insurers must have suitable storage and analysis tools that allow actuaries and accountants to work side by side to better understand actuarial model output from both an accounting and analytical perspective.

04 Roll forwards, financial statements, and accounting

Roll forwards, financial statements, and accounting

Roll forwards: To produce the roll forwards, insurers must produce many cash flow projections (perhaps five or six in terms of liability for future policy benefits and 10 or more sets of stochastic projections for a market risk benefit). An automated process must be in place to produce those runs. The results of the runs are then used to produce the accounting entries and formal roll-forward disclosures.

While some insurers might already be producing some form of roll-forward disclosures under existing GAAP, the complexity of the process has the potential to be much greater under LDTI. Insurers must streamline and automate the process and consider whether a dedicated subledger provides the most logical framework for producing the required disclosures.

Consideration of the level of detail to incorporate in the general ledger (GL): At one extreme, firms might prefer to encapsulate LDTI measurement complexities in a subledger solution and only feed aggregated results into the thin GL approach. This keeps the burden of LDTI on the GL low but implies that the production of LDTI disclosures must come from the subledger solution, and analysis on the GL level remains limited. At the other extreme, firms might want to enrich their GL with the granularity required for LDTI by using the thick GL approach.

Firms may need to reconsider how they post the difference between statutory reserves and GAAP reserves in their GL given that GAAP reserves are now subject to a different roll-forward analysis.

05 Management information demand

Management information demand

Right tools for reporting: Targeted improvements aim to bring transparency to the financial reporting process, and insurers must have the proper tools to take advantage. For example, an insurer should perform its roll forwards at the appropriate level of disaggregation necessary to understand the movement of its actuarial balances period to period. In addition, an insurer should have a facility where both actuaries and accountants can analyze results and use those to drive management decisions.