The Federal Insurance Office studied insurance regulation and released their Modernization Report.One recommendation was that states should move forward with a newer method of calculating policy reserves in life insurance.The new approach is based on risk analysis and risk management techniques that reflect risks more accurately than the current method.The new approach is called

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The new approach recommended by the Federal Insurance Office is called principles-based reserving, as it is based on risk analysis and risk management techniques that accurately reflect risks. The other options (B, C, and D) do not accurately describe the recommended approach. Rule-based reserving and tabular reserving are currently used methods but do not reflect risks as accurately as principles-based reserving. Loss ratio reserving is a method used for property and casualty insurance, whereas the study and recommendation were focused on life insurance.

The Federal Insurance Office Studied Insurance Regulation and Released Their