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Comments
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Study Data: The underlying data used in developing the 2008 Valuation Basic Table (VBT) was a subset of the Society of Actuaries (SOA) Individual Life Experience Committee's (ILEC) 2002-2004 Intercompany Study comprised of claims from 35 contributing companies. The underlying select experience for older issue ages, juveniles and smoker risks was limited hence several data sources, graduation techniques and other adjustments to augment the data were utilized to develop the final tables. The underlying data also becomes sparse and less reliable for ages in the mid-to-late 80s and beyond. Therefore, population mortality from several sources was used to reflect the mortality at the latest attained ages. Research from the SOA’s “2005 Living to 100 and Beyond” seminar, as well as research and study on longevity issues and super-centenarian mortality was incorporated. Methodology: Two aggregate tables, the Primary Table and the Limited Underwriting Table, representing different levels of underwriting and different market segments, were developed. Ultimate mortality rates were first developed and then the aggregate select-and-ultimate tables for male and female, non-smoker and smoker risks were developed, representing different levels of underwriting and different market segments. The ILEC felt it was important to maintain two distinct aggregate tables as the underlying experience varied significantly by size and market segment. The variations reflect differences in underwriting at various issue ages and amounts and differences in the marketing approach and distribution at lower amounts. These differences held across gender and smoking status. As testing for smoking or tobacco usage did not become common until the early 1980s, the analysis was performed on a smoker versus non-smoker distinct basis for the first 24 durations only; for durations 26 and later, the analysis was on a uni-smoke basis. Duration 25 values were determined using Whittaker-Henderson graduation between the duration 24 and duration 26 values. In situations where the data was very limited or sparse, a Projection Pursuit Regression graduation method was used in conjunction with Whittaker-Henderson. For durations 1 through 25, the expected basis is the 2001 VBT Sex Distinct, Smoker Distinct Tables; for durations 26 and later, the expected basis is the composite 2001 VBT. In a change from prior experience tables that have all ended with a mortality rate equal to 1.000, the VBT tables have an omega mortality rate of 0.45 beginning at attained age 110. The Limited Underwriting tables blend into the Primary tables by age 90. Data Transcription Errors: None. Data Certified: 10/2012
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