March 27 (Reuters) - New York's top financial regulator said it would lower the reserves to be set aside for term-life insurance policies by 30-35 percent on businesses written after Jan. 1, 2015.
"We have determined that our term-life formula results in reserves that are high relative to actuarial experience and should be modernized," New York Department of Financial Services superintendent Benjamin Lawsky said in a letter to other state regulators on Thursday.
The modifications to the reserve held against future claims take into account an increased lifespan of policyholders and expenses in acquiring and retaining business, Lawsky said.
Lawsky's letter to the National Association of Insurance Commissioners, which coordinates rules and supervision among them, comes in the wake of industry demands for lower reserves.
The regulator will also introduce a two-year full preliminary term as initial expenses for acquiring and retaining term-life business are higher as a proportion of premiums paid than for certain other types of business, the letter said.
(Reporting by Avik Das in Bangalore; Editing by Don Sebastian)