ASOPs Flashcards
ASOP 12: Risk Classification
Purpose
Provide guidance to actuaries with respect to designing, reviewing, or changing risk classification systems
ASOP 12: Risk Classification
Considerations in Selection of Risk Characteristics
- Relationship of risk characteristics and expected outcomes
- Causality
- Objectivity
- Practicality
- Applicable law
- Industry/business practice
ASOP 12: Risk Classification
Considerations in Establishing Risk Classes
- Intended Use
- Actuarial Considerations
- Adverse selection
- Credibility
- Practicality
- Other (Compliance, industry practice)
ASOP 12: Risk Classification
Testing Risk Classification System
- Test long-term viability of system
- Effect of adverse selection
- Risk classes used to testing
- Effect of changes
- Quantitative analysis
ASOP 18: LTC
Analysis of Issues and Recommended Practices
- Coverage and Plan Features
- Assumption Setting
- Premium Rate recommendation
- Reserve determination
- Sensitivity testing
- Cash flow testing
- Experience monitoring
ASOP 18: LTC
Assumption Setting
- Morbidity
- Mortality
- Voluntary Termination (lapse)
- Expense
- Tax
- investment Return
- Mix of business
- Changes over time
ASOP 18: LTC
Considerations for Setting Assumptions for Total Claim Costs in LTC
- 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
ASOP 23: Data Quality
Analysis of Issues and Recommended Practices
- Selection of data
- Reliance on other information
- Review of data for reasonableness and consistency
ASOP 23: Data Quality
Selection of Data
- 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
ASOP 23: Data Quality
Limitations of Actuary’s Responsibility
- Determine if data supplied by others was falsified
- Develop compilations solely to search for questionable data
- audit data
ASOP 23: Data Quality
Disclosures
- 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
ASOP 25: Credibility Procedures
Analysis of Issues and Recommended PRactices
- Purpose and Use (evaluate experience of subject for potential use in assumption setting)
- Selection or Development
- Selection of Relevant Experience
- Homogeneity of data
ASOP 41: Actuarial Communications
Disclosures
- 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
ASOP 41: Actuarial Communications
Actuarial Communications, Documents, Reports
- 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