The Actuarial Standards Board (ASB) of the American Academy of Actuaries recently adopted new Actuarial Standard of Practice (ASOP) No. 53, Estimating Future Costs for Prospective Property/Casualty Risk Transfer and Risk Retention. The ASOP provides guidance to actuaries when performing actuarial services with respect to developing or reviewing future cost estimates for prospective property/casualty risk transfer and risk retention. This includes future cost estimates for insurance, reinsurance, self-insurance, loss portfolio transfers, or any other mechanisms for risk transfer or risk retention.
The ASOP incorporates all of the Considerations contained in the Casualty Actuarial Society’s Statement of Principles Regarding Property and Casualty Ratemaking and addresses issues related to the estimation of costs for risk transfer and risk retention not currently addressed in existing ASOPs. The ASOP also references other existing ASOPs that include relevant issues related to the estimation of future costs for prospective risk transfer and risk retention.
This standard will be effective for work performed on or after Aug. 1, 2018.