Actuarial Standards Board News

Read the latest news from the ASB Boxscore.

The ASB has issued a Request for Input concerning the development of an actuarial standard of practice (ASOP) that would address the actuarial aspects of property/casualty rate filings submitted to state insurance departments. The proposed standard would provide guidance to actuaries regarding the actuarial aspects of a rate filing for the filing actuary, the regulatory actuary, and the reviewing actuary. Therefore, the ASB is interested in the views of actuaries, other parties involved in the determination of rates and the preparation and/or review of rate filings submitted to state insurance departments, and any others who have opinions on the matter of the actuarial aspects of the insurance rate filing process.

The Request for Input document can be found here. Deadline for receipt of input is February 28, 2020.

The ASB recently approved second exposure drafts of 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. The first exposure drafts of ASOP Nos. 27 and 35 were issued in March 2018, and received 18 comment letters and 16 comment letters, respectively, that were considered in making changes that are reflected in the second exposure drafts. Notable changes to ASOP Nos. 27 and 35 include clarifying the ASOPs’ scopes and disclosure requirements with respect to assumptions not selected by the actuary. In addition, several sections in both ASOPs were revised for readability, clarity, or consistency.

The comment deadline for both second exposure drafts is Sept. 15, 2019. Information on how to submit comments can be found in the drafts.

The ASB recently adopted ASOP No. 55, Capital Adequacy Assessment. The ASOP provides guidance to actuaries when performing professional services with respect to an evaluation of the resiliency of an insurer through a capital adequacy assessment. The ASOP applies to actuaries designing, performing, or reviewing capital adequacy assessment work for life or health insurers (including fraternal benefit societies and health benefit plans), property and casualty insurers, mortgage and title insurers, financial guaranty insurance companies, risk retention groups, public entity pools, captive insurers, and similar entities or a combination of such entities, when affiliated (collectively, referred to as “insurer”). The ASOP, which underwent three exposure periods and received a total of 22 comment letters, is effective for work commenced on or after Nov. 1, 2019. ASOP No. 55 can be viewed here.

The ASB recently approved an exposure draft of a revision of ASOP No. 2, now titled Nonguaranteed Elements for Life Insurance and Annuity Products. The standard applies to actuaries when performing actuarial services with respect to the determination and, if applicable, illustration of nonguaranteed elements (NGEs), except where noted in the standard, for life insurance and annuity products written on individual policy forms where NGEs may vary at the discretion of the insurer. The standard also applies to group master contracts with individual certificates where NGEs are determined in a similar manner to products written on individual life and annuity policy forms. Examples of products within the scope of the standard include universal life, indeterminate premium life, and deferred annuity products. Such products may be fixed, variable, or indexed. Notable changes from the existing ASOP include clarification to the scope, expansion and clarification of definitions and guidance, and the introduction of the concept of an insurer’s NGE framework, which includes the determination policy, how policy classes are established, and the practices used to determine NGE scales. The comment deadline for the exposure draft, which can be viewed under the “Drafts” tab in “Current Exposure Drafts,” is June 1, 2019.  is July 15, 2019. Information on how to submit comments can be found in the draft.