The ASB adopted ASOP No. 56, Modeling. The ASOP provides guidance to actuaries when performing actuarial services with respect to designing, developing, selecting, modifying, using, reviewing, or evaluating models. Notable changes made to the fourth exposure draft include deleting the section on margins because it did not provide sufficiently clear guidance. In addition, “hold-out data” in predictive modeling was defined and added to the list of items that may be included in the model output validation. The ASOP, which underwent four exposure periods and received over 100 combined comment letters, was developed in response to the increases in the number and importance of modeling applications in actuarial science, with the results of actuarial models sometimes being reflected in financial statements. ASOP No. 56 is effective for work commenced on or after Oct. 1, 2020, and can be viewed here.
