Actuarial Standards Board News

Information on the exposure drafts of ASOP Nos. 2, 22, and 28 as well as the new template for submitting comments are featured in this edition of the Boxscore.

The ASB recently adopted revisions of Actuarial Standard of Practice (ASOP) Nos. 27, Selection of Economic Assumptions for Measuring Pension Obligations, and 35, Selection of Demographic and Other Noneconomic Assumptions for Measuring Pension Obligations.

ASOP No. 27 provides guidance to actuaries when performing actuarial services that include selecting (including giving advice on selecting) economic assumptions—primarily investment return, discount rate, post-retirement benefit increases, inflation, and compensation increases—for measuring obligations under defined benefit pension plans.

ASOP No. 35 provides guidance to actuaries when performing actuarial services that include selecting (including giving advice on selecting) demographic and other noneconomic assumptions for measuring obligations under defined benefit pension plans.

ASOP Nos. 27 and 35 are effective for actuarial reports issued on or after August 1, 2021 and when the measurement date in the actuarial report is on or after Aug. 1, 2021.

The ASB recently approved a second exposure draft of a revision of ASOP No. 2, now titled Nonguaranteed Elements for Life Insurance and Annuity Products. The ASOP applies to actuaries when performing actuarial services with respect to the determination and, if applicable, illustration of NGEs for all life insurance and annuity policies written on individual policy forms where NGEs may vary at the discretion of the insurer except where noted in the ASOP. This would include determination of NGEs on in-force policies that were issued before the ASOP took effect. The comment deadline for the second exposure draft is Nov. 13, 2020. Information on how to submit comments can be found in the draft.

The ASB recently adopted a revision of ASOP No. 32, Social Insurance. The standard applies to actuaries when performing actuarial services in connection with an actuarial analysis of a Social Insurance Program whether the actuary’s principal is or is not a government agency with responsibility for the valuation of a Social Insurance Program. The standard also applies to actuaries with oversight responsibility for the actuarial services for Social Insurance Programs when serving as an auditor, reviewer, a member of an actuarial advisory committee, or a member of a technical panel. The ASOP is effective for work commenced on or after Sept. 1, 2021 and can be viewed here.

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.