The ASB recently approved a second exposure draft of a revision of ASOP No. 22, now titled Statements of Actuarial Opinion Based on Asset Adequacy Analysis for Life Insurance, Annuity, or Health Insurance Reserves and Other Liabilities. The ASOP applies to actuaries when performing actuarial services with respect to providing a statement of actuarial opinion based on asset adequacy analysis of life insurance, annuity, or health insurance reserves and other liabilities when a) the statement of actuarial opinion is prepared to comply with applicable law based on the model Standard Valuation Law and VM-30 of the NAIC Valuation Manual, or b) the statement of actuarial opinion is prepared for an insurance company to comply with other applicable law. Notable changes from the first exposure draft include clarifying the scope, revising guidance on the discount rate, and removing several defined terms including “investment yield risk” and “moderately adverse deviation.” The comment deadline for the exposure draft is Nov. 30, 2020. Information on how to submit comments using the new template can be found in the draft.
The ASB recently approved an exposure draft of a revision of Actuarial Standard of Practice (ASOP) No. 28, now titled Statements of Actuarial Opinion Regarding Health Insurance Assets and Liabilities. The ASOP provides guidance to actuaries when performing actuarial services with respect to issuing or reviewing a statement of actuarial opinion (sometimes referred to as “actuarial opinion” or “opinion”) regarding health insurance assets and liabilities. The ASOP also applies to actuaries when performing actuarial services with respect to issuing or reviewing statements of actuarial opinion and any associated actuarial memorandum with respect to health insurance assets and liabilities of insurance companies, reinsurance companies, or other health insurance financing systems (such as health benefit plans provided by self-insured or government plan sponsors) that provide similar coverages. Notable changes from the existing ASOP include expanding guidance on asset and liability evaluation to address the use of an explicit provision for adverse deviation as well as implicit conservatism in assumptions.
The comment deadline for the exposure draft is Nov. 13, 2020. Information on how to submit comments can be found in the draft.
The ASB has introduced a new process for the submission of comments commencing with the upcoming release of the exposure drafts of Actuarial Standard of Practice (ASOP) No. 22, Statements of Actuarial Opinion Based on Asset Adequacy Analysis for Life, Annuity, or Health Reserves and Other Liabilities, and ASOP No. 28, Statements of Actuarial Opinion Regarding Health Insurance Assets and Liabilities. Comments should be submitted via the comment template, which can be accessed here. The transmittal letter of these and future exposure drafts will also include a link to the template. The template will streamline the process for drafting committees to review and respond to comments. The template also is designed to encourage commentators to include both suggested edits and the rationale for such suggested edits. While general comments are always welcome, suggestions for alternative wording and the rationale for the suggested wording helps the ASB better understand the commentator’s concern about the guidance in an exposure draft.
The ASB has discussed the Oct. 1, 2020 effective for ASOP No. 56, Modeling. In light of the importance of this standard, the Board believes that there is sufficient lead time between now and the effective date of the ASOP and that an extension of the effective date is not now in the best interest of the profession or the public. Should circumstances warrant, the Board is free under its Rules of Procedure to reconsider that conclusion, but sees no need at this time to alter the effective date. The Pension Practice Council’s letter can be viewed here.
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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.