ASOP 1 Flashcards
Are exposure drafts of ASOPs binding?
No. An ASOP is not binding until the effective date of the ASOP. ASOP 1
Are exposure drafts of ASOPs binding?
No. An ASOP is not binding until the effective date of the ASOP. ASOP 1
Are exposure drafts of ASOPs binding?
No. Each ASOP has a specified effective date. Prior to that date, actuaries may look to them at their discretion for advisory guidance. An ASOP is not binding until the effective date of the ASOP. Unless specified otherwise, in the case of a revision to an existing ASOP, the existing ASOP is binding until the effective date of the revised ASOP. ASOP 1
Is a deviation from an ASOP necessarily malpractice?
No. The ASOPs are not intended to shift the burden of proof or the burden of production during litigation, and deviation from one or more provisions of an ASOP should not, in and of itself, be presumed to be malpractice. ASOP 1.
What should an actuary do if an actuary believes that two ASOPs conflict?
The actuary should apply professional judgment and may wish to contact the ABCD for confidential guidance on appropriate practice. ASOP 1
Are practice notes binding on actuaries?
No. Unlike the ASOPs, which are binding upon actuaries, other actuarial literature provides information that an actuary may choose, but is not required, to consider when rendering actuarial services. ASOP 1
Is a deviation from an ASOP necessarily malpractice?
No. The ASOPs are not intended to shift the burden of proof or the burden of production during litigation, and deviation from one or more provisions of an ASOP should not, in and of itself, be presumed to be malpractice. ASOPs are intended for use by actuaries who are qualified to make use of them by virtue of having the necessary education and experience to understand and apply them . Other individuals should consider obtaining the advice of a qualified actuary before making use of, or otherwise relying upon, ASOPs. ASOP 1.
Are appendices part of an ASOP and binding?
No. Each ASOP document includes (1) a transmittal memorandum, (2) the ASOP itself, and (3) one or more supporting appendices. The transmittal memorandum and the appendices are not part of the ASOP and are nonbinding. ASOP 1.
Is a deviation from an ASOP necessarily malpractice?
No. The ASOPs are not intended to shift the burden of proof or the burden of production during litigation, and deviation from one or more provisions of an ASOP should not, in and of itself, be presumed to be malpractice. ASOPs are intended for use by actuaries who are qualified to make use of them by virtue of having the necessary education and experience to understand and apply them . Other individuals should consider obtaining the advice of a qualified actuary before making use of, or otherwise relying upon, ASOPs. ASOP 1.
Are appendices part of an ASOP and binding?
No. Each ASOP document includes (1) a transmittal memorandum, (2) the ASOP itself, and (3) one or more supporting appendices. The transmittal memorandum and the appendices are not part of the ASOP and are nonbinding, but may be useful to the actuary in interpreting the standard. ASOP 1.
What should an actuary do if an actuary believes that two ASOPs conflict?
When an actuary believes that multiple ASOPs have conflicting provisions when applied to a specific situation and none provide explicit guidance concerning which governs, the actuary should apply professional judgment and may wish to contact the ABCD for confidential guidance on appropriate practice. ASOP 1
If an ASOP contemplates deviation, is it a breach of the ASOP or Code of Conduct if the Actuary deviates and includes the required disclosures?
No. The ASOPs make specific provision for those situations where the actuary is required to or deems it appropriate to deviate from one or more provisions of an ASOP. It is not a breach of an ASOP to deviate from one or more of its provisions if the actuary does so in the manner described in the ASOP, including making the disclosures related to the deviation as required in such ASOP and in ASOP No. 41. ASOP 1
May an actuary rely on a contorted reading of an ASOP?
Actuaries should take a good faith approach in complying with ASOPs, exercising good judgment and professional integrity. It is not appropriate for users of ASOPs to make a strained interpretation of the provisions of an ASOP. ASOP 1
Should the ASOPs be viewed as prescriptive or an analytical framework?
The ASOPs are principles-based and do not attempt to dictate every step and decision in an actuarial assignment. Generally, ASOPs are not narrowly prescriptive and neither dictate a single approach nor mandate a particular outcome. Rather, ASOPs provide the actuary with an analytical framework for exercising professional judgment, and identify factors that the actuary typically should consider when rendering a particular type of actuarial service. The ASOPs allow for the actuary to use professional judgment when selecting methods and assumptions, conducting an analysis, and reaching a conclusion, and recognize that actuaries can reasonably reach different conclusions when faced with the same facts. Section 3 of ASOP 1
Can there be more than one reasonable assumption or method?
Because actuarial practice commonly involves the estimation of uncertain events, there will often be a range of reasonable methods and assumptions, and two actuaries could follow a particular ASOP, both using reasonable methods and assumptions, and reach different but reasonable results. Section 2 of ASOP 1
