The ASB approved an exposure draft of a revision of Actuarial Standard of Practice (ASOP) No. 20, now titled Discounting of Property/Casualty Claim Estimates. The ASOP applies to actuaries when performing actuarial services that involve the discounting of claim estimates for property/casualty coverages to a present value.
Notable changes made to the exposure draft include expanding the scope of the standard to include the discounting of future claim estimates for prospective risk transfer or risk retention, as addressed by ASOP No. 53, Estimating Future Costs for Prospective Property/Casualty Risk Transfer and Risk Retention; adding definitions for such terms as “claim estimate,” “insurance risk,” and “coverage;” and adding guidance on discount rate selection and appropriateness.
The comment deadline is Sept. 30, 2022. Information on how to submit comments can be found in the exposure draft.
The ASB approved an exposure draft of a revision of ASOP No. 10, now titled U.S. GAAP for Long-Duration Life, Annuity, and Health Products. The ASOP applies to actuaries when performing actuarial services related to the preparation or review of insurance company financial statements in accordance with generally accepted accounting principles (GAAP) for long-duration life, annuity, or health products. The actuary should comply with the standard except to the extent it may conflict with applicable law (statutes, regulations, and other legally binding authority) or authoritative GAAP guidance (such as Accounting Standards Codification [ASC], Staff Accounting Bulletins issued by the U.S. Securities and Exchange Commission, and other guidance issued by authoritative bodies). Notable changes made to the exposure draft include revising the title, purpose, and scope to encompass long-duration life, annuity, and health products; and clarifying the scope to include the review of GAAP financial statements. The comment deadline is June 30, 2022. Information on how to submit comments can be found in the exposure draft.
The ASB recently adopted a revision of ASOP No. 18, now titled Long-Term Care. The ASOP applies to actuaries when performing actuarial services with respect to long-term care (LTC) benefit plans sponsored by insurers or other entities. The standard also applies to actuaries designing, pricing, or determining funding of an LTC benefit plan. In addition, the standard applies to actuaries measuring or evaluating LTC liabilities within an LTC benefit plan. The standard does not apply to actuaries providing actuarial services related to LTC benefits for Medicaid-eligible recipients unless the actuarial services are for a long-range financial projection (generally more than five years) of LTC benefit expenditures and eligible recipients under the Medicaid program. The standard is effective for actuarial services performed on or after Sept. 1, 2022.
The ASB released its 2021 Annual Report, which highlights the board’s accomplishments throughout the year. In 2021, the ASB adopted five revised ASOPs, approved four exposure drafts for comment, and approved proposals to revise four existing ASOPs.
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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.