Casualty Quarterly, Winter 2024

Winter 2024
Vol. 8 | No. 1

Medical Professional Liability Committee Seeks New Members; AI & DEI Among Key Issues for New Year

MoslerThe Casualty Practice Council’s Medical Professional Liability (MPL) Committee is looking for new members and is focused on several key topics in the new year, according to Tim Mosler, the committee’s new chairperson.

Topics of interest to the committee include rising claim severity and the potential impact of third-party litigation funding; the growing use of technology—particularly artificial intelligence (AI)—in medical settings; as well as social issues, such as matters related to diversity, equity & inclusion (DEI), that could potentially affect medical care and claim resolution.

“This is a pivotal time in the MPL industry, and it’s a chance for your voice to be heard and for your thoughts to impact the Academy’s communication to industry stakeholders,” including lawmakers and regulators, Mosler said. The committee is targeting its kickoff meeting in the first quarter, he said.

The committee released an issue brief in September 2021 on MPL issues around COVID-19, which noted there were fewer medical professional liability insurance claims related to COVID-19 than expected and that telehealth remained widely utilized despite dropping off from the volume early in the pandemic.

Mosler noted that AI may now be a larger issue than telehealth for actuaries—in MPL and other areas.

If any of these topics interest you or affect your day-to-day actuarial work and you would like to be a part of the Medical Professional Liability Committee, please email Rob Fischer, Academy casualty policy analyst, to get connected.

Academy Hosts P/C Loss Reserve Opinions Seminar

A packed P/C Opinion Seminar session

The Academy hosted the annual Seminar on Effective P/C Loss Reserve Opinions in Charlotte, N.C., in early December. The seminar covered the entire opinion-writing process, from being qualified to sign opinions, to adherence to actuarial standards of practice (ASOPs) and how to write reports. Attendees gained significant hours of continuing education (CE) credit, including professionalism and bias CE under the U.S. Qualification Standards.

About a third of the audience were first-time seminar attendees, and they gained valuable learning experience from both the faculty and more experienced opinion-writing attendees. Seminar faculty collected attendees’ feedback and will convene in the new year to discuss the location of next year’s seminar.

“It was great to see so many new faces and have so much interaction,” said Dawn Fowle, chairperson of the seminar’s faculty. “I always recommend this seminar to actuaries who sign opinions just to have a place to ask questions and learn from others who have experience—especially since so many Appointed Actuaries don’t have someone in their company they can discuss this with. So many attendees come up to me and tell me how helpful this seminar is because it makes them think ahead about issues they may not have otherwise considered. I think it’s an invaluable experience.”

Save the Date: 2024 Seminar Set for December in New Orleans

Save the date for the Academy’s 2024 P/C Loss Reserve Opinion Seminar, which will be held Monday and Tuesday, Dec. 9–10, in New Orleans. More details will be forthcoming soon.

COPLFR Releases Annual Practice Note on SAOs

The Committee on Property and Liability Financial Reporting (COPLFR) released the updated Statements of Actuarial Opinion on Property and Casualty Loss Reserves practice note to include opinions issued in 2023. The practice note describes practices commonly employed by actuaries working on SAOs on loss and loss expense reserves in accordance with the NAIC’s Property and Casualty Annual Statement Instructions.

CPC Outlook Featured in Contingencies

AngellThe January/February Contingencies includes an article, “Your Membership in Action,” that profiles practice-area vice presidents’ outlook for the new year. Casualty VP Amy Angell’s offering, “Practical, actionable workstreams for the practicing P/C professional,” highlights the Casualty Practice Council’s (CPC) 2024 plans to continue to underscore the importance of providing practical assistance to actuaries, including work products and seminars by COPLFR; a working group to prepare a new practice note on ASOP No. 20, Discounting Property & Casualty Claim Estimates; and the P/C Committee on Equity and Fairness’ engagement with regulators in Colorado and the District of Columbia on practice considerations related to unintended bias in insurance ratemaking. See Angell's full report in the issue.

Your Input Wanted—ASB Approves Exposure Draft Of Revised ASOPs

The Actuarial Standards Board (ASB) approved an exposure draft of a proposed revision of ASOP No. 7, Life, Health, or Property/Casualty Insurance Cash Flow Risk, which would apply when performing actuarial services involving life or health cash flow risks, and to actuarial services involving property/casualty cash flow risks specific to investments. The ASB is asking P/C and life & health practice-area actuaries to submit comments, which are due June 1—more information on how to submit comments can be found in the exposure draft.

Cross-Practice ASOP Open for Comment

The ASB also approved an exposure draft of a proposed revision of ASOP No. 12, Risk Classification (for All Practice Areas), which applies to actuaries with respect to designing, developing, selecting, modifying, reviewing, evaluating, or opining on any elements of a risk classification framework in connection with financial or personal security systems. Originally adopted in 1989 and last updated in 2005, ASOP No. 12 was developed as the need for more formal guidance on risk classification increased as the selection process became more complex and more subject to public scrutiny. Comments are due by May 1—to weigh in, see the exposure draft.

Year-in-Review Public Policy Alert Covers P/C Issues

A year-in-review Academy alert offers highlights of 2023 state and federal legislative and regulatory actions affecting the U.S. actuarial profession and the Academy’s effort to fulfill its role to educate and support our stakeholders on these critical issues. It includes a Biden administration executive order on artificial intelligence, a climate resilience framework, and the rollout of a national cybersecurity strategy.

Alert Spotlights Climate Change Issues

An Academy climate alert outlines climate change’s impact on insurance and actuarial work. Recent Contingencies stories—including in the November/December 2023 issue—highlighted such issues, as did the Academy’s webinar series last year held in partnership with the National Science Foundation and the National Oceanic and Atmospheric Administration.

Academy Updates CASTF at NAIC National Meeting

At the NAIC Fall National Meeting in Orlando, Fla., in December, Academy Casualty Policy Analyst Rob Fischer presented to the NAIC’s Casualty Actuarial and Statistical (C) Task Force (CASTF) on the Casualty Practice Council’s recent publications and future work products.

The Academy also offered professionalism presentations, including during a Dec. 1 professionalism breakfast for regulators that featured a roundtable discussion with Academy President and Committee on Qualifications Vice Chairperson Lisa Slotznick, outgoing ASB Chairperson Rob Damler, incoming ASB Chairperson Kevin Dyke, and Actuarial Board for Counseling and Discipline (ABCD) member Cande Olsen.

They covered professionalism and emerging areas of interest including artificial intelligence (AI), climate change, and how ASOPs and the Code of Professional Conduct provide guidance when practicing in these areas.

Envision Tomorrow Breakout Sessions Look at NFIP, Workers’ Comp & Medical Marijuana, Climate Issues

FEMA’s Mitchell Waldner (right) makes a point in the NFIP session

Envision Tomorrow casualty sessions provided valuable perspectives on key issues including the National Flood Insurance Program (NFIP), workers’ compensation and medical marijuana, and climate data and attribution science. Speakers, panelists, and attendees discussed these and many other topics over the course of the two-day meeting, interacting in-person and with virtual attendees.

For more coverage of Envision Tomorrow, including a complete rundown of P/C breakout sessions, see Envision Tomorrow—A Closer Look, a supplement to Actuarial Update.

Save the Date: Next Year’s Meeting in October—It’s not too early to save the dates for the Academy’s 2024 Annual Meeting, which will be held Oct. 15–16, in advance of the presidential election. It will be held at the Grand Hyatt Washington in the nation’s capital.

Academy Engages With Stakeholders at CAS

Academy volunteers and staff attended the Casualty Actuarial Society’s (CAS) Annual Meeting in Los Angeles, joining in the celebration of newly credentialed ACAS and FCAS professionals and offering information on membership, publications, and activities. Academy staff also participated in the event’s volunteer activity, packing math-themed bags for local students, including a copy of The Magic School Bus Takes a Risk.

P/C Webinar Looks at ASOP No. 20

A Dec. 18 webinar, “What’s New With ASOP No. 20?” examined property/casualty ASOP No. 20, Discounting of Property/Casualty Claim Estimates. A recording is available on-demand to Academy members.

Last July, the ASB adopted a revision to ASOP No. 20, which applies to actuaries when performing actuarial services that involve the discounting of claim estimates for P/C coverages to a present value. The ASOP is effective for any actuarial work product covered by the standard’s scope issued on or after Dec. 1, 2023.

Presenters were Robert Walling, chairperson of the ASB Casualty Committee’s ASOP 20 Task Force; and Dave Heppen, a member of the ASB’s Casualty Committee. Academy Casualty Vice President Amy Angell moderated.

Highlights From Casualty Quarterly

Prefer to watch your news? Check out this “Highlights From Casualty Quarterly” video for a quick recap of what you need to know.

Place Your Order for the P/C Law Manual

The Academy’s P/C Loss Reserve Law Manual is available for order. Included are statements of actuarial opinion (SAO) requirements and laws and regulations establishing those requirements; and instructions for property/casualty SAOs, title loss, and loss expense reserves. Make sure you have the latest P/C requirements at your fingertips—place your order today.

In the News

The CAS issued a press release on Lisa Slotznick becoming the Academy’s president. CAS also published a member notice about casualty members who received Rising Actuary Awards at Envision Tomorrow.

InsuranceNewsNet and subscriber-only Law 360 reported on an Envision Tomorrow casualty breakout session that gave updates on flood risk and the NFIP.

A research article in the Annals of Operations Research uses the jointly sponsored Actuaries Climate Index in its analysis of the relationship between commodity prices and extreme weather.

An Insurance Journal article naming the most-listened-to cyber podcast episodes of 2023 included a podcast on cyber accumulation risk featuring Committee on Cyber Risk Chairperson Norman Niami.

An MJBizDaily story on the regulation and medical acceptance of marijuana cited the Workers’ Compensation Committee issue brief, Navigating Workers’ Compensation and Medical Marijuana.

Legislative/Regulatory Activity

Federal

President Biden issued an executive order seeking to address artificial intelligence (AI) security and development. It requires companies to tell the government about the large-scale AI systems they’re developing and share independent test results to prove they pose no national security or safety risk to the American people. It also directs the departments of Defense and the Homeland Security to develop cyber protections to bolster U.S. computer networks and other critical infrastructure.

The Rural Housing Service issued a proposed rulemaking to amend its regulation to implement changes related to insurance requirements under the Multi-Family Housing Direct Loan and Grant programs. The proposed rule seeks to align rural development insurance coverage types, amounts, and deductibles with affordable housing industry standards to simplify the coverage amounts, deductible limits, and improve the customer experience with updated and more understandable insurance requirements.

Reps. Nick LaLota of New York and Vicente Gonzalez of Texas introduced HR 6304, a bipartisan bill that seeks to lower costs while increasing coverage for homeowners and property owners in high-risk flood areas while also improving the National Flood Insurance Program. Among other things, the measure would raise “Increased Cost of Compliance” coverage, currently set at $30,000, to $50,000 and make additional coverage available to homeowners that would increase the payout to $100,000.

Lawmakers are sponsoring bipartisan companion legislation in the House and Senate that creates a National Flood Insurance Program (NFIP) pilot to speed payments on claims filed by NFIP policy holders. HR 6082, offered by Reps. Andrew Garbarino and Gregory Meeks of New York, and S 3153, sponsored by Sen. John Kennedy of Louisiana, would create a one-year pilot to measure the effectiveness of such a change.

State

California regulators released draft rules that would go further than any other state currently in its regulation of automated tools, including artificial intelligence, resume screening filters, and facial recognition. Among other things, it would give Californians a right to prohibit their personal data from being used within automated decision-making technology.

California Gov. Gavin Newsom signed AB 458 into law, which clarifies state insurance requirements for providers of shared mobility devices such as motorized scooters or electric bicycles. It stipulates that providers must hold a minimum of $5 million in insurance in aggregate to cover pedestrian injury or death claims against operators of such vehicles.

Casualty Public Policy in Brief

The P&C Committee on Equity and Fairness submitted comments to the Colorado Division of Insurance on its life insurance draft regulation on governance and risk management framework requirements and its applicability to private passenger automobile insurance.
Casualty Policy Analyst Rob Fischer attended the National Conference of Insurance Legislators’ (NCOIL) Annual Meeting in Columbus, Ohio, coordinating a timely presentation by Derek Jones, chairperson of the Workers’ Compensation Committee, on the committee’s medical marijuana issue brief to NCOIL’s Workers’ Compensation Committee.
Ron Wilkins, chairperson of the P/C Risk-Based Capital Committee, presented to the NAIC’s P/C Risk-Based Capital Working Group on the committee’s report to the NAIC on P/C Underwriting Factors and Investment Income Adjustment (IIA) Factors.
COPLFR submitted a comment letter to the ASB on the second exposure draft of ASOP No. 36, Statements of Actuarial Opinion Regarding Property/Casualty Loss and Loss Adjustment Expense Reserves.