Part 23 (ASOP43)

Question 1

Purpose of standard 43

Answer 1

Provide guidance to actuaries estimating the loss and LAE for unpaid claims for P&C coverage

Question 2

Identify the Purpose or use of the unpaid claim estimate

Answer 2

• External financial reporting
• Internal Management reporting
• Special purposes

Question 3

If estimates are being used for multiple purposes, there may be what

what should be considered

Answer 3

conflicts

consider making adjustments to accommodate the multiple purposes

Question 4

What to do if constraints on analysis

Answer 4

• Notify the principal of the risk
• Communicate what the constraints are to the principle

Question 5

What needs to be identified in SCOPE for estimate

Answer 5

• Intended measure of the unpaid claim estimate, and if discounted
• If reserve is gross or net of specified recoverable
• extent of reinsurance collectability risk
• Types of unpaid claim adjustment expenses included in the unpaid claim estimate
• Claim covered by the estimate

Question 6

Consider what to determine the appropriate method to use

Answer 6

• Purpose
• Nature of claims and exposure
• Devlopment characteristics of the claims
• Applicability of various methods to the available data
• Reasonableness of the assumptions underlying the various methods
• Sensitivity of the estimate to the various assumptions

Question 7

Actuary needs to make adjustments for what

Answer 7

Changing conditions that may be insufficiently reflected in the historical data

Question 8

Disclosures

Answer 8

• Intended purpose of estimate
• Significant limitation
• Scope
• Accounting date, valuation date, and review date
• Specific significant risks and uncertainties
• Significant events, assumptions or reliance that have material impact on the estimate
• When providing range, basis for range
• if estimate is an update to a prior estimate, changes that lead to this