Do you ever wonder which actuarial standards of practice (ASOPs) apply to your current assignment, or worry that you may have overlooked an ASOP that does apply? If so, you may want to check the Applicability Guidelines for Actuarial Standards of Practice.
The Academy provides the Applicability Guidelines as a tool to help actuaries determine which ASOPs apply to an assignment. Coordinated by the Council on Professionalism, they are regularly updated with input from the Academy’s life, health, casualty, and pension practice councils when the Actuarial Standards Board (ASB) adopts a new or revised ASOP. Most recently, they were updated for ASOP No. 56, Modeling, which takes effect for work commenced on or after Oct. 1, 2020. Last fall, they were updated for ASOP No. 55, Capital Adequacy Assessment.
The Academy provides the Applicability Guidelines as a tool to help actuaries determine which ASOPs apply to an assignment.
This fall, they will be updated for three recently revised ASOPs:
- ASOP No. 27, Selection of Economic Assumptions for Measuring Pension Obligations;
- ASOP No. 32, Social Insurance; and
- ASOP No. 35, Selection of Demographic and Other Noneconomic Assumptions for Measuring Pension Obligations.
As the guidelines are not standards of practice published by the ASB, they are not binding guidance, and you are not required to follow them. Nevertheless, they can be helpful in determining which ASOPs apply to an assignment. Taking the form of a downloadable Excel file, the Applicability Guidelines contain a tab for each practice area. On the last tab, exposure drafts are listed as of the date of the last update, to give you an idea of what changes the ASB is considering.
The top of each practice area tab reminds actuaries that three ASOPs apply to every assignment: ASOP No. 1, Introductory ASOP; ASOP No. 23, Data Quality; and ASOP No. 41, Actuarial Communications. After that, each tab lists common actuarial tasks in that area of practice and the ASOPs that might apply for each task. Each ASOP listed is linked to that ASOP on the ASB website for easy reference.
For example, if you are a health actuary performing a trend analysis, you can look at task 5.7, Perform trend analysis, and see that ASOP Nos. 5, 25, 42, 45, and 56 might apply. If you are working on an assignment that involves more than one practice area, you may want to take a look at the tab for each practice area involved. So, if you are working on an assignment related to retirement health benefits, you would review the tabs for pension and health, for example.
Precept 3 of the Code of Professional Conduct states that “[i]t is the professional responsibility of an Actuary to observe applicable standards of practice … and to keep current regarding changes in those standards.” The Applicability Guidelines, available to all actuaries on the Academy website, helps you meet this requirement by providing an up-to-date resource to help you determine which ASOPs apply to the task at hand. As always, it is ultimately the responsibility of you, the actuary, to determine which ASOPs apply.