COVID-19 impact on insurers’ LDTI implementation journey

Our perspective on the impacts of a LDTI deferral

All affected insurers should reevaluate their planned implementation activities and consider how their timelines may have been affected by COVID-19 and how roadmaps could be modified. While we are not taking a position for or against a change to the LDTI implementation date, we have developed a view of how insurers might use the additional time, if it were granted:

• Progress to date: Where do insurers currently stand against their roadmaps designed for a January 1, 2022, effective date (for most public companies)?
• Forward look: Assess the impacts to individual implementation activities—this will vary based on where insurers stand with respect to their broader implementation and a desire to recast the timeline for larger and complex initiatives (such as reporting automationand close acceleration).
• Resource constraints: Personnel availability and budget should be considered in determining how existing activities could be modified and what activities may be added or removed if a deferral is granted.

The impacts of a deferral on an LDTI implementation will be unique to each insurer. However, the following represent some of the most notable areas where companies are likely to want to reassess key milestone timelines, especially if they were behind on their roadmaps prior to COVID-19:

• End-to-end build and development
• Integration and user acceptance testing (UAT)
• Restatement planning and approach
• Stakeholder education

Additionally, existing planned activities may be postponed to better align with the revised deferral go-live date, ensure training materials align with the most up-to-date restatement information, and provide stakeholders training when most applicable.

How insurers should manage COVID-19 impacts

Despite the challenges insurers face in the current environment, implementation progress must nevertheless continue to achieve effective compliance. Given these dynamic changes, organizations should evaluate pressure points in existing implementation plans, consider how to best pursue an agile implementation approach, and be prepared to make best use of the extension in the event the standard’s effective date is ultimately deferred. Effective planning across these areas will ensure that programs maintain the momentum needed to deliver a successful implementation in the face of COVID-19.