The ASB recently approved a second exposure draft of a proposed new ASOP titled Pricing of Life Insurance and Annuity Products. The proposed ASOP will apply to actuaries when performing actuarial services with respect to the pricing of life insurance and annuity products when a product is initially developed or when charges or benefits are changed for future sales. The standard will not apply to any changes made on inforce policies. Such resetting of nonguaranteed elements, including dividends, on products in force will be outside the scope of the ASOP and are addressed in ASOP No. 2, Nonguaranteed Charges or Benefits for Life Insurance Policies and Annuity Contracts, and No. 15, Dividends for Individual Participating Life Insurance, Annuities, and Disability Insurance. The comment deadline for the exposure draft, which can be viewed under the “Drafts” tab in “Current Exposure Drafts”, is Oct. 31, 2017. Information on how to submit comments can be found in the draft.
The ASB recently adopted a final revision of ASOP No. 5, Incurred Health Claim Liabilities. This ASOP provides guidance to actuaries when estimating or reviewing incurred claims when preparing or reviewing financial reports, claims studies, rates, or other actuarial communications as of a valuation date under a health benefit plan. The ASOP No. 5 revision, which will be effective Sept. 1, 2017, has been updated to reflect relevant legal, regulatory, and practice developments that have occurred since the 2000 revision. The standard can be viewed under the “Standards of Practice” tab in “Current Standards.”
The ASB recently approved an exposure draft of a revision of ASOP No. 17, Expert Testimony by Actuaries. The proposed revised standard will apply to actuaries who are qualified as experts under the evidentiary rules applicable in a forum when they provide testimony in court hearings, dispute resolutions, depositions or other adversarial proceedings, and in rate hearings. The proposed revised standard will not apply to an individual whose testimony and qualification as an expert is unrelated to the individual’s education, training, experience, or employment as an actuary.
The comment deadline for the exposure draft is June 30, 2017 and can be viewed under the “Drafts” tab in “Current Exposure Drafts.”
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.”
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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.