A matter of life and life. (Editor's Prologue).

Imagine living to be 120 years old. It's not likely to happen to everyone any time soon, but a new mortality table tells insurers they need to plan for that longevity, because it is a possibility. Expected to be adopted by the National Association of Insurance Commissioners this year, the new table has insurers debating how much impact the projections will have and what areas will be affected most. It's been about two decades since the last Commissioners Standard Ordinary Table was released. That table showed a huge improvement in life expectancy, but marked the outside stretch at 100.

"We had to develop a new table because mortality improved at different rates in different areas, so you couldn't even apply a percentage across the old tables," said Jack Luff, experience studies actuary for the Society of Actuaries and a participant in developing the new table. Term life insurance drove the push for development, he said.

Level-premium term life policies will likely benefit most from reductions in reserves required by the new table, but a 20% reduction is anticipated overall. Beyond that, anticipations vary. Some observers say, for example, that pricing won't be greatly affected because companies have been building their own mortality tables in-house for years and pricing accordingly. Others say ordinary insurance products will have slightly lower premiums.

Insurers also will need to consider that the new table will reduce the reserve business expense deduction on their tax returns, Luff said. And there probably will be some changes in what qualifies as a life insurance product.

This month's cover feature, "Approaching Immortality" (page 26), explores the numerous ramifications of the new CSO table, including its effects on life-settlement purchases, reinsurance, annuities, Medicare and long-term-care insurance.

For automobile insurers, ramifications of the diminished-value concept and injury claims from low-impact rear-end collisions are the subjects of a special feature package, "Beyond Repair" (page 62) and "Hit From Behind" (page 59). Court cases and vehicle-to-vehicle testing using human volunteers suggest the life expectancy of large payouts for both may be short.

Sally Whitney

Sally Whitney is editor. You may reach her at [phone], Ext. 5340, by writing to A.M. Best Co., Ambest Road, Oldwick, NJ 08858, or by e-mail at [e-mail]. The e-mail address for Best's Review is [e-mail].