The ASB approved an exposure draft of a revision of ASOP No. 10, now titled U.S. GAAP for Long-Duration Life, Annuity, and Health Products. The ASOP applies to actuaries when performing actuarial services related to the preparation or review of insurance company financial statements in accordance with generally accepted accounting principles (GAAP) for long-duration life, annuity, or health products. The actuary should comply with the standard except to the extent it may conflict with applicable law (statutes, regulations, and other legally binding authority) or authoritative GAAP guidance (such as Accounting Standards Codification [ASC], Staff Accounting Bulletins issued by the U.S. Securities and Exchange Commission, and other guidance issued by authoritative bodies). Notable changes made to the exposure draft include revising the title, purpose, and scope to encompass long-duration life, annuity, and health products; and clarifying the scope to include the review of GAAP financial statements. The comment deadline is June 30, 2022. Information on how to submit comments can be found in the exposure draft.
The ASB recently adopted a revision of ASOP No. 18, now titled Long-Term Care. The ASOP applies to actuaries when performing actuarial services with respect to long-term care (LTC) benefit plans sponsored by insurers or other entities. The standard also applies to actuaries designing, pricing, or determining funding of an LTC benefit plan. In addition, the standard applies to actuaries measuring or evaluating LTC liabilities within an LTC benefit plan. The standard does not apply to actuaries providing actuarial services related to LTC benefits for Medicaid-eligible recipients unless the actuarial services are for a long-range financial projection (generally more than five years) of LTC benefit expenditures and eligible recipients under the Medicaid program. The standard is effective for actuarial services performed on or after Sept. 1, 2022.
The ASB released its 2021 Annual Report, which highlights the board’s accomplishments throughout the year. In 2021, the ASB adopted five revised ASOPs, approved four exposure drafts for comment, and approved proposals to revise four existing ASOPs.
The ASB recently adopted a revision of ASOP No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions. The ASOP provides guidance to actuaries when performing actuarial services with respect to measuring obligations under a defined benefit pension plan and determining periodic costs or actuarially determined contributions for such plans. While other actuarial standards of practice address assumptions, asset valuation methods, and assessment of risk, the revised ASOP addresses broader measurement issues, including cost allocation procedures and contribution allocation procedures. The standard provides guidance for coordinating and integrating all of the elements of an actuarial valuation of a pension plan. The standard is effective for any actuarial report issued on or after Feb. 15, 2023; and if the measurement date in the actuarial report is on or after Feb. 15, 2023.
The ASB also approved for exposure a revision of ASOP No. 29, now titled Expense Provisions for Future Cost Estimates for Prospective Property/Casualty Risk Transfer and Risk Retention. The ASOP applies to actuaries when developing or reviewing expense provisions for future cost estimates for prospective property/casualty risk transfer or risk retention. This includes expense provisions developed or reviewed for insurance, reinsurance, self-insurance, loss portfolio transfers, or any other mechanisms for prospective property/casualty risk transfer or risk retention. If the actuary’s actuarial services involve reviewing expense provisions developed by another party, the actuary should use the guidance in the ASOP to the extent practicable. The comment deadline is May 31, 2022. Information on how to submit comments can be found in the exposure draft.
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About The ASB
The Actuarial Standards Board (ASB) sets standards for appropriate actuarial practice in the United States through the development and promulgation of Actuarial Standards of Practice (ASOPs). These ASOPs describe the procedures an actuary should follow when performing actuarial services and identify what the actuary should disclose when communicating the results of those services.