By Virginia Hulme
With four actuarial standards of practice (ASOPs) open for comment and another expected later this year, now is a good time for a reminder that your participation in the standards-setting process is invaluable to the Actuarial Standards Board (ASB) and to the profession as a whole.
The U.S. actuarial profession is self-regulated, giving every actuary a role to play in maintaining and meeting high standards of conduct, qualification, and practice. Actuaries in a variety of companies doing different types of work are, in some cases, bound by the same standard.
It is thus essential that the ASB hear from many actuaries with different perspectives and viewpoints to make sure the concerns of all areas of the profession are addressed when drafting and revising ASOPs. With that in mind, you are encouraged to review and comment on draft standards that affect your work—it is a valuable way you can contribute to the profession. (And if you need another incentive, time spent reviewing and commenting on ASOPs may count as professionalism continuing education.)
To see the exposure drafts listed below, visit the exposure drafts webpage on the ASB website. In addition to changes specific to each ASOP, all of these exposure drafts have been updated for current ASB style and standard language, including for reliance, documentation, and disclosures.
ASOP No. 24, Compliance with the NAIC Life Insurance Illustrations Model Regulation. This second exposure draft would provide guidance to actuaries when performing actuarial services in support of a certification or representation that life insurance illustrated scales are in accordance with the National Association of Insurance Commissioners (NAIC) Life Insurance Illustrations Model Regulation or applicable actuarial guidelines. Comment deadline: Sept. 15.
ASOP No. 36, Statements of Actuarial Opinion Regarding Property/Casualty Loss, Loss Adjustment Expense, or Other Reserves. This second exposure draft would expand the scope of the ASOP beyond “issuing” and “providing” to “performing actuarial services with respect to a written statement of actuarial opinion regarding property/casualty loss, loss adjustment expense, or other reserves,” require the actuary to determine the discount rate used, when a material portion of the reserves within the scope of a statement of actuarial opinion is discounted, and add guidance for situations when the scope of the statement of actuarial opinion includes both direct and assumed reserves and reserves net of recoverables. Comment deadline: Nov. 1.
ASOP No. 40, Compliance with the NAIC Valuation of Life Insurance Policies Model Regulation with Respect to X Factors. This proposed revision would provide guidance 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 NAIC Valuation of Life Insurance Policies Model Regulation.
Enterprise Risk Management. This proposed new ASOP would replace current enterprise risk management (ERM) ASOPs—Nos. 46 and 47, Risk Evaluation in Enterprise Risk Management and Risk Treatment in Enterprise Risk Management, respectively—which were adopted in 2012. This exposure draft reflects the developments of the past decade, better reflects today’s ERM practices and terminology, and aligns with ASOP No. 55, Capital Adequacy Assessment, an ERM ASOP adopted in 2019.
An exposure draft of ASOP No. 12, Risk Classification (for All Practice Areas) is expected to be released later this year.
If you’d like to be notified when exposure drafts are released for comment, as well as when final standards are released, sign up to receive the Boxscore newsletter on the ASB website.
VIRGINIA HULME is the Academy’s manager for professionalism content. This article originally appeared in Actuarial Update.