The ASB recently approved an exposure draft of a proposed new ASOP titled Setting Assumptions. The proposed ASOP will apply to actuaries when performing actuarial services that include setting assumptions or assessing the reasonableness of assumptions set by others. Setting assumptions includes, but is not limited to, activities that may variously be referred to as developing, selecting, or choosing assumptions, and may include an analysis of data or experience, industry studies, trends, economic forecasts, and other analyses, as appropriate. While certain practice-specific assumption-setting standards exist, the ASB believes it would be useful to issue a standard on assumption setting for all practice areas as a supplement to the guidance that currently exists. The comment deadline for the exposure draft is April 30, 2017 and can be viewed under the “Drafts” tab in “Current Exposure Drafts.”
The ASB recently adopted a final revision of ASOP No. 21, Responding to or Assisting Auditors or Examiners in Connection with Financial Audits, Financial Reviews, and Financial Examinations, which had been promulgated in 2004. A key change reflected in the revision includes expanding and clarifying the applicability of the ASOP to financial audits, financial reviews, and financial examinations relative to current practices, especially the risk-focused and prospective view used in these financial audits, financial reviews, and financial examinations. The standard, which can be viewed under the “Standards of Practice” tab in “Current Standards,” will be effective for any actuarial work in connection with a financial audit, financial review, or financial examination for fiscal periods beginning on or after December 15, 2016.
The ASB recently approved an exposure draft of a proposed new ASOP titled Capital Adequacy Assessment for Insurers. The proposed ASOP will apply to actuaries involved in capital adequacy assessment work for life or health insurers, including fraternal benefit societies and health benefit plans, property and casualty insurers, mortgage and title insurers, financial guaranty insurance companies, complex insurance organizations, and similar organizations. The ASB released a discussion draft of the proposed standard in May 2015. The exposure draft reflects many of the comments received on that discussion draft. The comment deadline for the exposure draft is Jan. 31, 2017 and can be viewed under the “Drafts” tab in “Current Exposure Drafts.”
The ASB recently approved a second exposure draft of a proposed new ASOP titled Assessment and Disclosure of Risk Associated with Measuring Pension Obligations and Determining Pension Plan Contributions. Key changes to the second exposure draft include expanding the scope of the proposed ASOP from applying only to actuaries when performing a funding valuation of a pension plan to applying also to actuaries when performing a pricing valuation of a proposed pension plan change that would, in the actuary’s professional judgment, significantly change the types or levels of risks of the pension plan. In addition to other modifications, the scope also was modified to exclude actuarial services performed in connection with applications for benefit suspensions under the Multiemployer Pension Relief Act of 2014.
The ASB also approved a third exposure draft of a proposed new ASOP titled Modeling. Among the several modifications to the draft, key changes include narrowing the scope but, within that scope, making the guidance less subject to professional judgment as to its applicability; clarifying the definitions for “model,” “data,” and “model run”; and clarifying guidance with respect to using models designed or built by others.
The comment deadline for both exposure drafts, which can be viewed here, is Oct. 31, 2016. Information on how to submit comments can be found in the drafts.
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About The ASB
The Actuarial Standards Board (ASB) establishes and improves standards of actuarial practice. These Actuarial Standards of Practice (ASOPs) identify what the actuary should consider, document, and disclose when performing an actuarial assignment. The ASB’s goal is to set standards for appropriate practice for the United States.