The Actuarial Standards Board (ASB) of the American Academy of Actuaries adopted a revision of Actuarial Standard of Practice (ASOP) No. 40, now titled Compliance with the NAIC Valuation of Life Insurance Policies Model Regulation with Respect to X Factors. The standard applies to actuaries when performing actuarial services with respect to adjusting deficiency reserve mortality rates using X factors pursuant to applicable law, including applicable law based on the National Association of Insurance Commissioners (NAIC) Valuation of Life Insurance Policies Model Regulation (Model). The standard provides specific guidance for actuaries complying with requirements consistent with the Model, and actuaries complying with requirements that differ materially from the Model should apply the guidance in the standard to the extent appropriate.
Notable changes to the revision, which underwent one exposure period and received four comment letters, include making the ASOP applicable to all actuaries performing actuarial services related to compliance with the Model, rather than only to the appointed actuary; eliminating or updating definitions for clarity; and eliminating descriptions of Model requirements throughout section 3. The standard will be effective for all statements of actuarial opinion provided for reserves with a valuation date on or after September 15, 2024.
