ASOPs Flashcards

1
Q

purpose of ASOP 41

A

[Actuarial Communications]
provides guidance on actuarial communication - written, electronic, or oral - issued with respect to actuarial services
(does not apply when no actuarial finding exists)

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2
Q

three relevant audiences for actuarial communications

A
  • intended user - any user the actuary identifies as one who is able to rely on the actuarial findings
  • other user - any recipient who is not an intended user
  • principal - client or employer of the actuary
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3
Q

considerations for actuarial communications (4)

A
  • form
  • content
  • clarity
  • reasonable timing
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4
Q

standard of clarity for an actuarial report

A

sufficient for another qualified actuary to assess the reasonableness of the work

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5
Q

disclosures for ASOP 41 (6)

A
  • identification of the responsible actuary
  • date and subject of the actuarial documents
  • disclosures in actuarial reports: intended users, scope, purpose, limitations, etc.
  • assumptions or methods prescribed by law
  • reliance on other sources
  • deviations from ASOP guidance
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6
Q

purpose of ASOP 43

A

[P&C Unpaid Claim Estimates]
provides guidance on estimation of loss and LAE for unpaid claims, when unpaid claim estimates are communicated as actuarial findings

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7
Q

three possible purposes of an unpaid claim estimate

A
  • external financial reporting
  • internal management reporting
  • scenario analysis
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8
Q

what the actuary should do if constraints create the risk that a more detailed analysis would produce a materially different result

A

notify the principal and communicate the constraints

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9
Q

factors that should be reflected in an unpaid claim estimate analysis (4)

A
  • methods and models used
  • sensitivity of assumptions
  • changing conditions, including economic, regulatory, judicial, and political conditions
  • uncertainty from model risk, parameter risk, and process risk
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10
Q

disclosures for ASOP 20 or 43 (4)

A
  • intended purpose
  • relevant dates: accounting, valuation, and review dates
  • limitations that may have materially impacted results
  • significant risks and uncertainties
  • per ASOP 41: assumptions or methods prescribed by law; reliance on other sources; deviations from ASOP guidance
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11
Q

specific disclosures for ASOP 20 or 43 that may be required (2)

A
  • if a range of estimates is provided, disclose the basis of the range
  • if the estimate is an update, disclose the change in assumptions, procedures, methods, or models and reasons for the change
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12
Q

purpose of ASOP 36

A

[Statements of Actuarial Opinion on P&C Loss and LAE Reserves]
provides guidance on issuing a written statement of actuarial opinion regarding loss and LAE reserves

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13
Q

purpose of ASOP 20

A

[Discounting P&C Unpaid Claim Estimates]
* provides guidance on discounting unpaid claim estimates to present value, when unpaid claim estimates are communicated as actuarial findings

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14
Q

considerations for assumption of timing of future payments for discounting reserves (3)

A
  • a range of timing estimates may be reasonable
  • assumptions should be internally consistent
  • understand sensitivity around assumptions
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15
Q

three possible approaches for selection of discount rate

A
  • use a rate close to the risk-free rate
  • portfolio approach: anticipated return on a selected asset portfolio
  • rates requested by another party
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16
Q

specific disclosures for ASOP 20 (3)

A
  • selected discount rate assumptions with basis and effect of income taxes
  • difference between discounted and undiscounted reserve estimates
  • whether discounted reserve estimate includes a risk margin