ASB Approves Life Settlements Exposure Draft

The ASB recently approved the exposure draft, Life Settlements Mortality. The proposed ASOP, drafted by the Life Settlements Mortality Task Force under the direction of the ASB’s Life Committee, will provide guidance to actuaries performing professional services when reporting on or evaluating mortality with respect to life settlements, or when analyzing or using mortality assumptions with respect to life settlements. The comment deadline for the exposure draft is July 31, 2013 and can be viewed under the tab “Exposure Drafts.”

ASB Adopts Revised Introduction and Numbers It ASOP No. 1

The ASB adopted a revised version of the Introductory Actuarial Standard of Practice. The Introduction was revised to clarify the meaning of such terms as “must” and “should”; to include a definition of “deviation”; and to make other revisions to the language that were not substantial but did help clarify meaning in various sections. Also, to reinforce that the Introduction contains guidance that must be followed, it has been numbered as ASOP No. 1. Subsequently, the existing ASOP No. 1, Nonguaranteed Charges or Benefits for Life Insurance Policies and Annuity Contracts, is renumbered as ASOP No. 2, since the existing ASOP No. 2, Recommendations for Actuarial Communications Related to Statements of Financial Accounting Standards Nos. 87 and 88, was repealed in March 2011. The effective date for the revised Introduction is June 1, 2013. The ASOP can be viewed under the tab “Current Actuarial Standards of Practice.”

ASB Approves Second Exposure Draft of a Revision of ASOP No. 6

The ASB approved a second exposure draft of ASOP No. 6, Measuring Retiree Group Benefit Obligations. The first exposure draft was issued in April 2012 and received eighteen comment letters. In response to those comments, the second exposure draft of ASOP No. 6 was revised to provide clarity to disclosure requirements; redefine such terms as “funded status,” “pooled plans,” and “retiree group benefits program”; and to better coordinate with ASOP No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions. The comment deadline for the second exposure draft of ASOP No. 6 is August 30, 2013 and can be viewed under the tab “Exposure Drafts.”

ASB Approves Second Exposure Draft of a Revision of ASOP No. 4

The ASB approved a second exposure draft of ASOP No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions. Some of the changes in the second exposure draft of ASOP No. 4 introduce new concepts while others are refinements to language in the first exposure draft. In addition, the ASB recognized the need for better coordination between ASOP No. 4 and ASOP No. 6, Measuring Retiree Group Benefit Obligations, and set a goal for the two standards to be the same where possible and different where necessary. The second exposure draft of ASOP No. 4 includes language to improve this coordination. The comment deadline for the second exposure draft is May 31, 2013 and can be viewed under the tab “Exposure Drafts.”

ASB Adopts ASOP No. 47

At its December meeting, the ASB adopted ASOP No. 47, Risk Treatment in Enterprise Risk Management. The ASOP, which provides guidance to actuaries when performing professional services with respect to risk treatment for the purposes of enterprise risk management, focuses on four aspects of risk treatment: determining risk tolerance, choosing risk appetites, setting risk limits, and performing risk mitigation activities. Guidance for activities related to risk evaluation is addressed in ASOP No. 46, Risk Evaluation in Enterprise Risk Management. The effective date for both ASOPs is May 1, 2013. The ASOP can be viewed under the tab "Current Actuarial Standards of Practice.”

ASB Adopts New ASOP No. 46

At its September meeting, the ASB adopted ASOP No. 46, Risk Evaluation in Enterprise Risk Management. The ASOP provides guidance to actuaries when performing professional services with respect to risk evaluation systems used for the purposes of enterprise risk management, including designing, developing, implementing, using, maintaining, and reviewing those systems. An ASOP providing guidance for activities related to risk treatment is being addressed in a proposed ASOP titled, Risk Treatment in Enterprise Risk Management, which will be released in late 2012. The topics of these two standards were chosen because they cover the most common actuarial services performed within risk management systems of organizations. ASOP No. 46 will be effective May 1, 2013 and can be viewed under the tab, “Current Actuarial Standards of Practice.”

ASB to Meet June 18–19 in Washington

The next regularly scheduled meeting of the ASB will be held June 18–19, 2013, at the Academy offices in Washington, D.C.