The ASB recently approved an exposure draft of a revision of ASOP No. 38, now titled Catastrophe Modeling (for All Practice Areas). The ASOP provides guidance to actuaries when performing actuarial services with respect to selecting, using, reviewing, or evaluating catastrophe models. At the direction of the ASB, the standard was developed to apply to all practice areas and all forms of catastrophe models, including natural catastrophes such as hurricanes, earthquakes, and severe convective storms, and other catastrophes such as terrorist acts and pandemics. Changes also were made to ASOP No. 38 to be consistent with ASOP No. 56, Modeling, and other recent ASOPs. In addition, the scope of the ASOP was expanded to include the activities “selecting, reviewing, and evaluating” models in addition to the existing activity of “using” a model when performing actuarial services. The comment deadline for the third exposure draft is Jan. 15, 2021.
The ASB also approved a third exposure draft of a proposed ASOP titled Setting Assumptions. The ASOP provides guidance to actuaries when performing actuarial services that involve setting assumptions, giving advice on setting assumptions, or assessing the reasonableness of assumptions set by others. Twenty-five comment letters were received on the second exposure draft and considered in making changes that are reflected in the third exposure draft. Notable changes reflected in the third exposure draft include significant revisions made to coordinate with ASOP No. 56, expanding the purpose to make it more consistent with the scope, and changing guidance on assumption margins to acknowledge that margins can be either explicit or implicit. The comment deadline for the third exposure draft is April 15, 2021.
Information on how to submit comments using the new comment template can be found in both exposure drafts.