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.”
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.
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.”
The ASB recently adopted a final revision of Actuarial Standard of Practice (ASOP) No. 23, Data Quality. The ASOP provides guidance to actuaries when selecting data, performing a review of data, using data, or relying on data supplied by others, in performing actuarial services. The ASOP also applies to actuaries who are selecting or preparing data, or are responsible for the selection or preparation of data, that the actuary believes will be used by other actuaries in performing actuarial services, or when making appropriate disclosures with regard to data quality. The standard can be viewed under the “Standards of Practice” tab in “Current Standards.”
The ASB recently adopted a final revision of ASOP No. 24, Compliance with the NAIC Life Insurance Illustrations Model Regulation. The ASOP provides guidance to actuaries when performing professional services pursuant to applicable law based on the National Association of Insurance Commissioners (NAIC) Life Insurance Illustrations Model Regulation (Model) and related NAIC actuarial guidelines or when performing professional services with respect to illustrations represented to be in accordance with the Model. In 2015, the NAIC released Actuarial Guideline 49 (AG 49) to clarify certain requirements of the Model related to policies with index-based interest credits and further amended AG 49 in September 2016. The ASOP was revised to reflect the changes effected through AG 49, to clarify certain guidance, and to be consistent with the current style and format used for ASOPs. The standard can be viewed under the “Standards of Practice” tab in “Current Standards.”
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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.