ASB Approves Second Exposure Draft on Principle-Based Reserves for Life Products
The ASB recently approved a second exposure draft titled Principle-Based Reserves for Life Products. In addition to clarifying the guidance in certain sections based on comments received on the first exposure draft, the second exposure draft was developed to receive additional feedback on such issues as whether the distinction between the company's responsibility and the actuary's responsibility is clear; whether the language of the standard quotes or summarizes VM-20 text appropriately and usefully; and whether it is sufficiently clear how the standard applies to actuaries who do not sign the PBR actuarial report but are involved in the preparation of principle-based reserves. The comment deadline for the second exposure draft is December 15, 2014 and can be viewed under the tab "Exposure Drafts."
ASB Issues Request for Comments on ASOPs Related to Public Pension Plan Funding and Accounting
The ASB has issued a request for comments concerning the application of the Actuarial Standards of Practice (ASOPs) in regards to actuarial valuations and other analyses used for determining public pension and other postemployment plan funding and accounting ("public plan actuarial valuations"). Public pension plan funding has received increased national attention in the past few years as a result of the recent recession and the emerging focus on financial economics in the pension community. Although the pension-related standards have been or are in the process of being updated to strengthen the guidance, in light of these external factors and reports, the ASB is interested in feedback from actuaries and other interested parties on whether further updates are needed. The Request for Comments document can be found under the "Exposure Drafts" tab. Deadline for receipt of comments is November 15, 2014.
ASB Adopts Revised Version of ASOP No. 6
The ASB recently adopted a revised version of ASOP No. 6, now titled Measuring Retiree Group Benefits Obligations and Determining Retiree Group Benefits Program Periodic Costs or Actuarially Determined Contributions. The revision to ASOP No. 6 provides guidance to actuaries when performing actuarial services with respect to measuring obligations under a retiree group benefits program and determining periodic costs or actuarially determined contributions for such retiree group benefits programs. The standard also provides guidance on assumptions that are specific to retiree group benefits programs and addresses broader measurement issues, cost allocation procedures, and contribution allocation procedures. In addition, the standard provides guidance for coordinating and integrating all of the elements of an actuarial valuation of a retiree group benefits program. The standard will be effective for any actuarial work product with a measurement date on or after March 31, 2015; however, if roll-forward techniques are used in the measurement, the standard is not effective until three years after the last full measurement before March 31, 2015. Earlier adoption of the standard is permitted. The final revised version of ASOP No. 6 can be viewed under the tab “Current Actuarial Standards of Practice.”
ASB Adopts Revised Version of ASOP No. 8
The ASB recently adopted a revised version of ASOP No. 8, now titled Regulatory Filings for Health Benefits, Accident and Health Insurance, and Entities Providing Health Benefits. This revision to ASOP No. 8 provides guidance to actuaries who prepare or review regulatory filings under state and federal requirements for filing health insurance premium rate increases. It also provides further guidance to actuaries reviewing regulatory filings. Furthermore, ASOP No. 8 was revised to add guidance on the preparation and review of health insurance rate filings for medical lines of business that are required by state or federal regulations. The standard, which will be effective for any actuarial work product covered by its scope issued on or after September 1, 2014, can be viewed under the tab “Current Actuarial Standards of Practice.”
Discussion Draft on Minimum Value and Actuarial Value under ACA Issued
A discussion draft, Determining Minimum Value and Actuarial Value under the Affordable Care Act, is now available for comment. Although there is a practice note providing information on the subject of determining minimum value and actuarial value under the Affordable Care Act, there is currently no guidance on the subject. Therefore, the Actuarial Standard Board (ASB) requested that the ASB Health Committee explore a potential ASOP to provide guidance to actuaries in these tasks. As a result, the ASB Health Committee charged a task force with developing a discussion draft to gather feedback on such a potential ASOP. The draft can be viewed under the “Discussion Drafts” tab. Comments will be reviewed as they are received, but the Health Committee suggests they be sent by September 30, 2014.
ASB Adopts Revised Version of ASOP No. 4
The ASB recently adopted a revised version of ASOP No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions. Key changes from the current standard include modifications to language pertaining to disclosure of funded status; disclosure of rationale for changes in cost or contribution allocation procedure; assessment of contribution allocation procedure or funding policy; prescribed assumptions or methods; and plan provisions that are difficult to measure. The adopted ASOP No. 4 was exposed twice between January 2012 and May 2013, generating a total of 30 comments. ASOP No. 4 will be effective for any work product with a measurement date on or after December 31, 2014. The final version can be viewed under the tab “Current Actuarial Standards of Practice.”
ASB Adopts Revised Version of ASOP No. 27
The ASB recently adopted a revised version of ASOP No. 27, Selection of Economic Assumptions for Measuring Pension Obligations. The second exposure draft of ASOP No. 27 was issued in January 2012 and received fifteen comment letters. As a result, various changes were made to the final standard in response to those comments including revising the section on Adverse Deviation or Other Valuation Issues to note that an actuary may determine that it is appropriate to adjust the economic assumptions when valuing plan provisions that are difficult to measure, as discussed in ASOP No. 4; and revising the Assumptions Used section to require that each significant assumption be disclosed. This standard will be effective for any actuarial work product with a measurement date on or after September 30, 2014.
ASB to Meet September 22–24, 2014, in Washington
The next regularly scheduled meeting of the ASB will be held September 22–24, 2014, at the Academy offices in Washington, D.C.