The ASB recently adopted a final revision of ASOP No. 21, Responding to or Assisting Auditors or Examiners in Connection with Financial Audits, Financial Reviews, and Financial Examinations, which had been promulgated in 2004. A key change reflected in the revision includes expanding and clarifying the applicability of the ASOP to financial audits, financial reviews, and financial examinations relative to current practices, especially the risk-focused and prospective view used in these financial audits, financial reviews, and financial examinations. The standard, which can be viewed under the “Standards of Practice” tab in “Current Standards,” will be effective for any actuarial work in connection with a financial audit, financial review, or financial examination for fiscal periods beginning on or after December 15, 2016.
The ASB recently approved an exposure draft of a proposed new ASOP titled Capital Adequacy Assessment for Insurers. The proposed ASOP will apply to actuaries involved in capital adequacy assessment work for life or health insurers, including fraternal benefit societies and health benefit plans, property and casualty insurers, mortgage and title insurers, financial guaranty insurance companies, complex insurance organizations, and similar organizations. The ASB released a discussion draft of the proposed standard in May 2015. The exposure draft reflects many of the comments received on that discussion draft. The comment deadline for the exposure draft is Jan. 31, 2017 and can be viewed under the “Drafts” tab in “Current Exposure Drafts.”
The ASB recently approved a second exposure draft of a proposed new ASOP titled Assessment and Disclosure of Risk Associated with Measuring Pension Obligations and Determining Pension Plan Contributions. Key changes to the second exposure draft include expanding the scope of the proposed ASOP from applying only to actuaries when performing a funding valuation of a pension plan to applying also to actuaries when performing a pricing valuation of a proposed pension plan change that would, in the actuary’s professional judgment, significantly change the types or levels of risks of the pension plan. In addition to other modifications, the scope also was modified to exclude actuarial services performed in connection with applications for benefit suspensions under the Multiemployer Pension Relief Act of 2014.
The ASB also approved a third exposure draft of a proposed new ASOP titled Modeling. Among the several modifications to the draft, key changes include narrowing the scope but, within that scope, making the guidance less subject to professional judgment as to its applicability; clarifying the definitions for “model,” “data,” and “model run”; and clarifying guidance with respect to using models designed or built by others.
The comment deadline for both exposure drafts, which can be viewed here, is Oct. 31, 2016. Information on how to submit comments can be found in the drafts.
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.