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Actuarial Standards Board News

ASB Adopts Final Revision of ASOP No. 5

The ASB recently adopted a final revision of ASOP No. 5, Incurred Health Claim Liabilities. This ASOP provides guidance to actuaries when estimating or reviewing incurred claims when preparing or reviewing financial reports, claims studies, rates, or other actuarial communications as of a valuation date under a health benefit plan. The ASOP No. 5 revision, which will be effective Sept. 1, 2017, has been updated to reflect relevant legal, regulatory, and practice developments that have occurred since the 2000 revision. The standard can be viewed under the “Standards of Practice” tab in “Current Standards.”

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ASB Approves Exposure Draft of a Revision of ASOP No. 17

Category: ASB News

The ASB recently approved an exposure draft of a revision of ASOP No. 17, Expert Testimony by Actuaries. The proposed revised standard will apply to actuaries who are qualified as experts under the evidentiary rules applicable in a forum when they provide testimony in court hearings, dispute resolutions, depositions or other adversarial proceedings, and in rate hearings. The proposed revised standard will not apply to an individual whose testimony and qualification as an expert is unrelated to the individual’s education, training, experience, or employment as an actuary.

The comment deadline for the exposure draft is June 30, 2017 and can be viewed under the “Drafts” tab in “Current Exposure Drafts.”

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ASB Approves Exposure of Proposed ASOP on Principle-Based Reserves for Life Products

The ASB approved an exposure draft of a proposed new ASOP titled Principle-Based Reserves for Life Products. The proposed ASOP will apply to actuaries when performing actuarial services on behalf of life insurance companies, including fraternal benefit societies, in connection with the calculation or review of reserves for individual life insurance policies subject to Chapter VM-20: Requirements for Principle-Based Reserves for Life Products of the Valuation Manual.

The ASB approved a first exposure draft in 2013 and a second exposure draft in 2014. Changes to the second exposure draft were approved in 2015; however, because the draft involved compliance with a regulation that had not yet taken effect, the ASB issued a “pending draft,” to be updated when the Standard Valuation Law and the Valuation Manual describing the principle-based reserves for life products took effect. The Valuation Manual has been modified by numerous amendments since the pending ASOP was issued. In light of these amendments, the pending ASOP was updated. In addition, minor clarifications and additional guidance also have been made to the draft ASOP.

The comment deadline for the exposure draft is May 31, 2017 and can be viewed under the “Drafts” tab in “Current Exposure Drafts.”

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ASB Releases 2016 Annual Report

Category: ASB News

The Actuarial Standards Board’s (ASB) 2016 Annual Report is now available. The report highlights the ASB’s accomplishments in 2016, including adoption of three revised actuarial standards of practice (ASOPs), approval of seven exposure drafts for comment, approval of a proposal for one revised ASOP, and a final report from the ASB’s Pension Task Force. The ASB also approved the formation of a task force to revise ASOP No. 32, Social Insurance.

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ASB Approves Third Exposure of Proposed ASOP on Estimating Future Costs

Category: ASB News

The ASB recently approved a third exposure draft of a proposed new actuarial standard of practice (ASOP) titled Estimating Future Costs for Prospective Property/Casualty Risk Transfer and Risk Funding. The proposed ASOP, formerly titled Property/Casualty Ratemaking, will apply to actuaries when performing actuarial services with respect to developing or reviewing future cost estimates for prospective property/casualty risk transfer and risk funding. This includes cost estimations for insurance, reinsurance, self-insurance, risk-funding or retention mechanisms, loss portfolio transfers, or any other risk-transfer mechanism. The comment deadline for the exposure draft is April 30, 2017 and can be viewed under the “Drafts” tab in “Current Exposure Drafts.”

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