Actuarial Standards Board News

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.”

The ASB recently approved an exposure draft of a proposed new ASOP titled Setting Assumptions. The proposed ASOP will apply to actuaries when performing actuarial services that include setting assumptions or assessing the reasonableness of assumptions set by others. Setting assumptions includes, but is not limited to, activities that may variously be referred to as developing, selecting, or choosing assumptions, and may include an analysis of data or experience, industry studies, trends, economic forecasts, and other analyses, as appropriate. While certain practice-specific assumption-setting standards exist, the ASB believes it would be useful to issue a standard on assumption setting for all practice areas as a supplement to the guidance that currently exists. 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 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 next regularly scheduled meeting of the ASB will be held December 6-7, 2016, at the Academy offices in Washington, D.C.

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.”