Actuarial Standards Board News

The Actuarial Standards Board of the American Academy of Actuaries recently approved second exposure drafts of Actuarial Standard of Practice (ASOP) No. 30, now titled Profit Provisions, Contingency Provisions, and the Cost of Capital in Property/Casualty Risk Transfer and Risk Retention, and ASOP No. 39, now titled Treatment of Catastrophe or Extreme Event Losses in Future Cost Estimates for Property/Casualty Risk Transfer and Risk Retention.

ASOP No. 30 provides guidance to actuaries when performing actuarial services with respect to developing or reviewing profit provisions and contingency provisions that are included in future cost estimates for all forms of prospective property/casualty risk transfer and risk retention. The first exposure draft was released in July 2024 and received nine comment letters that were considered in making changes that are reflected in the second exposure draft. Notable changes made to the second exposure draft include modifying definitions of “contingency provision,” “profit provision,” and “risk margin”; adding guidance regarding the interaction of different provisions, as well as the intended purpose and intended measure of the future cost estimate; expanding guidance on profit provision; and modifying guidance on contingency provisions.

ASOP No. 39 provides guidance to actuaries when performing actuarial services with respect to analyzing, determining, or reviewing future cost estimates for catastrophe losses and loss adjustment expenses for property/casualty risk transfer or risk retention. The first exposure draft was released in February 2025 and received 10 comment letters that were considered in making changes that are reflected in the second exposure draft. Notable changes made to the second exposure draft include removing the definition of “extreme event”; revising the definition of “catastrophe,” which now includes extreme events; and adjusting language accordingly throughout the standard. In addition, the definition of “catastrophe model” was modified to explicitly include “deterministic scenario analyses” and guidance on “adjusting catastrophe model output” was added.

The comment deadline for both drafts is July 1, 2026. Information on how to submit comments can be found in the drafts.

The Actuarial Standards Board of the American Academy of Actuaries recently approved a third exposure draft of a proposed revision of Actuarial Standard of Practice (ASOP) No. 41, Actuarial Communications. The ASOP applies to actuaries when issuing actuarial communications in any form within any practice area. The standard does not apply to actuaries when issuing a communication that does not include the rendering of actuarial services.

The second exposure draft was released in December 2024, in which 28 comment letters were received and considered in making changes that are reflected in the third exposure draft. Notable changes made to the third exposure draft include adding guidance to the scope to reflect guidance found in other General ASOPs addressing conflicts with practice-area ASOPs and revising section 4 to expand discussion of disclosures.

The comment deadline is June 1, 2026. Information on how to submit comments can be found in the draft.

The Actuarial Standards Board of the American Academy of Actuaries recently approved an exposure draft of a proposed revision of Actuarial Standard of Practice (ASOP) No. 6, Measuring Retiree Group Benefits Obligations and Determining Retiree Group Benefits Program Periodic Costs or Actuarially Determined Contributions.

The standard applies to actuaries when performing actuarial services with respect to measuring obligations, determining periodic costs or actuarially determined contributions, or setting assumptions for retiree group benefits programs, including development of a cost allocation procedure used to determine periodic costs; development of a contribution allocation procedure used to determine actuarially determined contributions; determination as to the types and levels of benefits supportable by specified cost or contribution levels; and projection of obligations, periodic costs or actuarially determined contributions, and other related measurements such as cash flow projections and funded status projections.

A notable change in the proposed revision includes expanding the scope to acknowledge that the performance of actuarial services for retiree group benefit programs may require actuaries from more than one practice area, in which case, all references to actuary collectively apply to collaborating actuaries, and to clarify the application of the standard when the actuary selects an output smoothing method and when an assumption or method is not selected by the actuary.

The comment deadline is May 15, 2026. Information on how to submit comments can be found in the draft.

The Actuarial Standards Board (ASB) of the American Academy of Actuaries released its 2024 Annual Report, which highlights the board’s accomplishments throughout the year, including adopting five revised actuarial standards of practices (ASOPs), approving seven exposure drafts for comment, and introducing ASOP No. 58, Enterprise Risk Management. In addition, the ASB continued development of six other new or revised ASOPs and approved a proposal to revise ASOP No. 1, Introductory Actuarial Standard of Practice.