ASOPs Flashcards

1
Q

ASOP 12: Risk Classification

Purpose

A

Provide guidance to actuaries with respect to designing, reviewing, or changing risk classification systems

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2
Q

ASOP 12: Risk Classification

Considerations in Selection of Risk Characteristics

A
  • Relationship of risk characteristics and expected outcomes
  • Causality
  • Objectivity
  • Practicality
  • Applicable law
  • Industry/business practice
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3
Q

ASOP 12: Risk Classification

Considerations in Establishing Risk Classes

A
  • Intended Use
  • Actuarial Considerations
    • Adverse selection
    • Credibility
    • Practicality
  • Other (Compliance, industry practice)
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4
Q

ASOP 12: Risk Classification

Testing Risk Classification System

A
  • Test long-term viability of system
  • Effect of adverse selection
  • Risk classes used to testing
  • Effect of changes
  • Quantitative analysis
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5
Q

ASOP 18: LTC

Analysis of Issues and Recommended Practices

A
  • Coverage and Plan Features
  • Assumption Setting
  • Premium Rate recommendation
  • Reserve determination
  • Sensitivity testing
  • Cash flow testing
  • Experience monitoring
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6
Q

ASOP 18: LTC

Assumption Setting

A
  • Morbidity
  • Mortality
  • Voluntary Termination (lapse)
  • Expense
  • Tax
  • investment Return
  • Mix of business
  • Changes over time
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7
Q

ASOP 18: LTC

Considerations for Setting Assumptions for Total Claim Costs in LTC

A
  • Costs vary by facility
  • Induced demand due to presence of LTC insurance
  • Availability of benefits form other public/private sources
  • Availability of LTC services
  • Financial benefit to claimant of remaining eligible for benefits
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8
Q

ASOP 23: Data Quality

Analysis of Issues and Recommended Practices

A
  • Selection of data
  • Reliance on other information
  • Review of data for reasonableness and consistency
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9
Q

ASOP 23: Data Quality

Selection of Data

A
  • Desired data elements and alternatives
  • Appropriateness for intended use
  • Sufficiently current
  • Reasonableness and comprehensiveness
  • Internal/external consistency
  • Material limitations
  • Feasibility of alternative data
  • Sampling methods to collect data
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10
Q

ASOP 23: Data Quality

Limitations of Actuary’s Responsibility

A
  • Determine if data supplied by others was falsified
  • Develop compilations solely to search for questionable data
  • audit data
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11
Q

ASOP 23: Data Quality

Disclosures

A
  • Source
  • Whether actuary reviewed
  • Reliance on data
  • Material adjustments
  • Limitations on work due to data quality
  • Unresolved concerns
  • Highly uncertain results including potential magnitude
  • Conflicts from complying with regulations
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12
Q

ASOP 25: Credibility Procedures

Analysis of Issues and Recommended PRactices

A
  • Purpose and Use (evaluate experience of subject for potential use in assumption setting)
  • Selection or Development
  • Selection of Relevant Experience
  • Homogeneity of data
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13
Q

ASOP 41: Actuarial Communications

Disclosures

A
  • Scope
  • Methods, assumptions, data used
  • Actuarial findings
  • Identification of responsible actuary
  • Identification of actuarial documents
  • Intended users
  • Cautions about risk and uncertainty
  • Limitations on use of findings
  • Conflict of interest
  • Information data
  • Subsequent events
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14
Q

ASOP 41: Actuarial Communications

Actuarial Communications, Documents, Reports

A
  • Document = written, electronic, or oral by actuary with respect to actuarial services
  • Document = actuarial communication in any recorded form
  • Report = Actuarial documents available to an intended user that the actuary determines relevant to specific actuary findings
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