The ASB recently adopted ASOP No. 55, Capital Adequacy Assessment. The ASOP provides guidance to actuaries when performing professional services with respect to an evaluation of the resiliency of an insurer through a capital adequacy assessment. The ASOP applies to actuaries designing, performing, or reviewing 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, risk retention groups, public entity pools, captive insurers, and similar entities or a combination of such entities, when affiliated (collectively, referred to as “insurer”). The ASOP, which underwent three exposure periods and received a total of 22 comment letters, is effective for work commenced on or after Nov. 1, 2019. ASOP No. 55 can be viewed here.
The ASB recently approved an exposure draft of a revision of ASOP No. 2, now titled Nonguaranteed Elements for Life Insurance and Annuity Products. The standard applies to actuaries when performing actuarial services with respect to the determination and, if applicable, illustration of nonguaranteed elements (NGEs), except where noted in the standard, for life insurance and annuity products written on individual policy forms where NGEs may vary at the discretion of the insurer. The standard also applies to group master contracts with individual certificates where NGEs are determined in a similar manner to products written on individual life and annuity policy forms. Examples of products within the scope of the standard include universal life, indeterminate premium life, and deferred annuity products. Such products may be fixed, variable, or indexed. Notable changes from the existing ASOP include clarification to the scope, expansion and clarification of definitions and guidance, and the introduction of the concept of an insurer’s NGE framework, which includes the determination policy, how policy classes are established, and the practices used to determine NGE scales. The comment deadline for the exposure draft, which can be viewed under the “Drafts” tab in “Current Exposure Drafts,” is June 1, 2019. is July 15, 2019. Information on how to submit comments can be found in the draft.
The ASB released its 2018 Annual Report. Last year the ASB adopted one new ASOP and two revised ASOPs, approved five exposure drafts for comment, and approved one proposal to revise one existing ASOP. In addition, the board presented a professionalism series webinar, “The Anatomy of ASOPs,” and provided content for several Actuarial Update Professionalism Counts articles.
To find terms or phrases, please include quotations, e.g., “qualified actuary.”
About The ASB
The Actuarial Standards Board (ASB) sets standards for appropriate actuarial practice in the United States through the development and promulgation of Actuarial Standards of Practice (ASOPs). These ASOPs describe the procedures an actuary should follow when performing actuarial services and identify what the actuary should disclose when communicating the results of those services.