Practice notes offer examples of current and emerging approaches to selected actuarial tasks. They are intended to supplement the available actuarial literature, especially where the practices addressed are subject to evolving technology, recently adopted external requirements, or advances in actuarial science and other applicable disciplines. You may access all current Public Policy practice notes by clicking the practice area below. Archived practice notes are also available by clicking the practice area below and then following the link to "All Practice Notes."
Current Casualty Practice Notes
Statements of Actuarial Opinion On Property and Casualty Loss Reserves (2023)
The Committee on Property and Liability Financial Reporting's practice note on Statements of Actuarial Opinion on P/C Loss Reserves (2023), including discussion regarding changes in the NAIC Annual Statement Instructions—Property/Casualty (NAIC Annual Statement Instructions) regarding the Actuarial Opinion, the Actuarial Opinion Summary, and Actuarial Report. (December 14, 2023)
Statements of Actuarial Opinion on P/C Loss Reserves (2022)
The Committee on Property and Liability Financial Reporting's practice note on Statements of Actuarial Opinion on P/C Loss Reserves (2022), including discussion regarding changes in the NAIC Annual Statement Instructions—Property/Casualty (NAIC Annual Statement Instructions) regarding the Actuarial Opinion, the Actuarial Opinion Summary, and Actuarial Report as well as COVID-19 considerations. (December 20, 2022)
Risk Transfer Practice Note
The Committee on Property and Liability Financial Reporting (COPLFR) released the update to the Risk Transfer Practice Note (last updated in 2007). The Risk Transfer Practice Note includes definitions and relationships between regulatory treatments of risk transfer, e.g., U.S. statutory, U.S. GAAP, IFRS 4 and IFRS 17, and Solvency II; the process for determination of risk transfer; current techniques used in practice for determining risk transfer; and risk transfer documentation. (November 04, 2022)
Statements of Actuarial Opinion on P/C Loss Reserves (2021)
The Committee on Property and Liability Financial Reporting's practice note on Statements of Actuarial Opinion on P/C Loss Reserves (2021), including discussion regarding changes in the NAIC Annual Statement Instructions—Property/Casualty (NAIC Annual Statement Instructions) regarding the Actuarial Opinion, the Actuarial Opinion Summary, and Actuarial Report as well as COVID-19 considerations. (December 17, 2021)
Statements of Actuarial Opinion on P/C Loss Reserves (2020)
The Committee on Property and Liability Financial Reporting's practice note on Statements of Actuarial Opinion on P/C Loss Reserves (2020), including discussion regarding changes in the NAIC Annual Statement Instructions—Property/Casualty (NAIC Annual Statement Instructions) regarding the Actuarial Opinion, the Actuarial Opinion Summary, and Actuarial Report as well as COVID-19 considerations. (January 19, 2021)
Statements of Actuarial Opinion on P/C Loss Reserves (2019)
The Committee on Property and Liability Financial Reporting's practice note on Statements of Actuarial Opinion on P/C Loss Reserves (2019), including frequently asked questions about new requirements for Appointed Actuaries. (January 7, 2020)
Retained Property Casualty Insurance-Related Risk: Interaction of Actuarial Analysis and Accounting
Committee on Property & Liability Financial Reporting practice note on retained risk. (April 24, 2018)
Model Audit Rule
COPLFR cross-practice area subgroup's Model Audit Rule practice note, intended to assist actuaries when supporting management's assertions per the Model Audit Rule, as applied to the evaluation and testing of key controls for the actuarial balances, including loss reserves for the financial reporting process. (November 12, 2010)
Reinsurance Attestation Supplement 20-1: Risk Transfer Testing
Committee on Property & Liability Financial Reporting practice note on risk transfer testing. (February 1, 2007)
Current Cross-Practice Practice Notes
Application of ASU 2018-12 to the Accounting for Long-Duration Contracts under U.S. GAAP
The Long-Duration Contracts Work Group of the Academy’s Risk Management and Financial Reporting Council released the practice note Application of ASU 2018-12 to the Accounting for Long-Duration Contracts under U.S. GAAP, which covers aspects of the application of Accounting Standards Update 2018-12, published in 2018 by the Financial Accounting Standards Board. (December 27, 2023)
Work Group Practice Note on Model Risk Management
Model Risk Management Work Group practice note on model risk management. (May 17, 2019)
Credit for Life Reinsurance in U.S. Statutory Financial Statements
Credit for Reinsurance Subgroup practice note, Credit for Life Reinsurance in U.S. Statutory Financial Statements. (February 2, 2018)
Quantifying Risk Exposures for ORSA Reports
Risk Exposures Subgroup practice note on quantifying risk Exposures for Own Risk and Solvency Assessment (ORSA) reports. (June 27, 2016)
GAAP Accounting for Profits Followed by Losses in Long-Duration Contracts
Profits Followed by Losses Subgroup practice note on accounting for profits followed by losses in long-duration contracts. (June 10, 2015)
Insurance Enterprise Risk Management
Enterprise Risk Management Committee’s practice note, “Insurance Enterprise Risk Management Practice,” which discusses ERM practices within the insurance industry and concepts such as risk culture, risk organization, and risk governance. (July 25, 2013)
Current Health Practice Notes
Long-Term Care Insurance Practice Note
Long-Term Care (LTC) Practice Note Work Group’s Long-Term Care Insurance public policy practice note to provide a source of information to practicing long-term care (LTC) actuaries seeking to better understand the considerations in evaluating experience, setting assumptions, valuation, and financial reporting. (May 14, 2021)
ASOP No. 6 Practice Note on Valuing Retiree Health Benefit Plans
The ASOP No. 6 Practice Note Work Group's ASOP No. 6—Development of Age-Specific Retiree Health Cost Assumptions, Including Applications to Pooled and Non-Pooled Health Plans practice note, which provides information on valuing retiree health benefit plans. (March 15, 2021)
Actuarial Memorandum Practice Note
The purpose of this practice note is to provide information that can be useful for appointed actuaries dealing with the challenges of producing an Actuarial Memorandum in support of the Actuarial Opinion filed as part of the Health Annual Statement Blank (often referred to as the Health Blank or the Orange Blank). However, the concepts covered in this practice note could be useful for other situations requiring documentation for health business. (October 29, 2020)
Work Group Finalizes Long-Term Care (LTC) Combination Product Valuation Practice Note
The Long-Term Care (LTC) Combination Product Valuation Work Group finalized the LTC Combination Product Valuation Practice Note to provide information to actuaries on current and emerging practices in which their peers are engaged with respect to the considerations in the statutory, Generally Accepted Accounting Principles (GAAP) and tax valuation of long-term care combination products. (December 02, 2019)
Statutory Reserving for Group Long-Term Disability Income Insurance
Group Long-Term Disability Practice Note Work Group on some of the current practices used by health actuaries in the United States for determining actuarial reserves and liabilities for Group Long-Term Disability Income business. (March 12, 2018)
Rate Filings under the Affordable Care Act
Premium Review Work Group practice note on Actuarial Practices Relating to Preparing, Reviewing, and Commenting on Rate Filings Prepared in Accordance with the Affordable Care Act, providing information on general rate filing requirements and considerations related to the URRT adn actuarial memorandum. (December 3, 2015)
Minimum Value and Actuarial Value Determinations Under Affordable Care Act
Practice note by the Minimum Value Practice Note Work Group on the calculation of minimum value and actuarial value under the Affordable Care Act (ACA), which includes a discussion of plan designs not accommodated by the calculators. (April 24, 2014)
Large Group Medical Insurance Reserves, Liabilities, and Actuarial Assets
Update of the Large Group Medical Business Practice Note by the Large Group Medical Business Practice Note Work Group. (August 7, 2013)
Long-Term Care Insurance Compliance with the NAIC LTCI Model Regulation Relating to Rate Stability
Update by the Long-Term Care Practice Note Work Group of the 2003 Long-Term Care Practice Note relating to long-term care rate stability. (October 23, 2012)
Revised Actuarial Statement of Opinion Instructions of NAIC Health Annual Statement Effective December 31, 2010
Health Practice Financial Reporting Committee practice note on the Revised Actuarial Statement of Opinion Instructions of the NAIC Health Annual Statement that went into effect Dec. 31, 2010. This practice note is intended to help actuaries both understand and comply with new requirements issued by the NAIC regarding health annual statement filings. (January 1, 2011)
Practices for Preparing Health Contract Reserves
Health Practice Financial Reporting Committee practice note on practices for preparing health contract reserves. (September 30, 2010)
Actuarial Certification of Restrictions Relating to Premium Rates in the Small Group Market
Health Practice Financial Reporting Committee practice note on actuarial certification of restrictions relating to premium rates in the small group market. (December 31, 2009)
Medicare Part D Accounting
Medicare Part D Accounting Practice Note Subgroup practice note describing some of the current practices used by U.S. health actuaries with respect to work involving valuation, accounting, and financial reporting for Medicare Part D products. (April 8, 2008)
Actuarial Equivalence for Prescription Drug Plans and Medicare Advantage Prescription Drug Plans under the Medicare Drug Program
Practice note issued by the Actuarial Equivalence PDP/MA-PD Practice Note Work Group on the actuarial equivalence for private prescription drug plans under Medicare Part D. The practice note addresses the procedural and professional aspects that require certification by CMS of an Academy member that a prescription drug plan or Medicare Advantage prescription drug plan meets the actuarial equivalence standard. (March 6, 2008)
Disease Management
Practice note created by the Disease Management Work Group to describe some of the current practices used by U.S. health actuaries with respect to work involving disease management programs. (December 31, 2007)
Group Long-Term Disability Insurance
Practice note created by a subgroup of the Health Practice Financial Reporting Committee providing a description of some of the current practices used by health actuaries in the United States for determining actuarial reserves and liabilities for Group Long Term Disability Income business. (August 1, 2006)
Attestation of Actuarial Equivalence for Plan Sponsors Accepting a Retiree Drug Subsidy Under the Medicare Drug Program
Practice note created by the Actuarial Equivalence Retiree Practice Note Work Group providing advisory guidance to actuaries attesting to the actuarial equivalence of a plan sponsor's retiree health plans for payments to sponsors of retiree prescription drug plans. (March 8, 2006)
Actuarial Certification of Rates for Medicaid Managed Care Programs
Practice Note created by the Medicaid Rate Certification Work Group to provide nonbinding guidance to actuaries who certify rates or rate ranges for capitated Medicaid managed care programs. (August 1, 2005)
Individual Major Medical Business
Practice Note developed by a work group of the Health Practice Financial Reporting Committee to provide a description of some of the current practices used by health actuaries in the United States for determining actuarial reserves and liabilities for individual accident and health insurance business. (August 1, 2005)
General Considerations
State Health Committee work group practice note discussing acceptable practice for all forms of group and individual accident and health policies and contracts. The practice note does not apply to post retirement benefit obligations at this time, but may apply to products sold in meeting these obligations. (November 30, 1995)
Current Life Practice Notes
Work Group Releases Practice Note on Long-Term Care Insurance Combination Product Valuation
The Academy’s Life Long-Term Care Combo Product Valuation Practice Note Work Group released Long-Term Care Insurance Combination Product Valuation, a practice note to that addresses the application of the NAIC Valuation Manual to these products from primarily a life insurance perspective. The previous 2019 Long-term Care (LTC) Combination Product Valuation Practice Note was developed by a work group of the Health Practice Council within the Academy. (April 20, 2022)
Life Illustrations Work Group Published Updated Practice Note
The Life Illustrations Work Group updated the Life Insurance Illustrations Practice Note to better reflect current practices actuaries are using when complying with ASOP No. 24, Compliance with the NAIC Life Insurance Illustrations Model Regulation, which was revised and adopted in December 2016. (September 8, 2021)
VM-21 Practice Note Supplement Exposure Draft
This is the exposure draft of the Academy's Variable Annuity Reserve and Capital Work Group's Practice Note Supplement, Implementation of Requirements for Principle-Based Reserves for Variable Annuities - 2021 Edition of VM-21. (February 3, 2021)
Common Practices of Examining Actuaries Involved in Statutory Financial Solvency Examinations of Life and Health Insurers (Including Considerations for Principle-Based Reserves)
Life Valuation Committee's Principle-Based Reserve Review Procedures Work Group practice note. (April 17, 2020)
Life Principle-Based Reserves (PBR) Under VM-20 (2020 Updated)
Life Principle-Based Approach Practice Note Work Group update of the 2017 VM-20 Practice Note to reflect emerging practices and changes to the Valuation Manual since the version effective for 12/31/2019 valuations. (April 3, 2020)
Principle-Based Approach Projections Practice Note
This practice note contains questions and answers related to common practice for projecting future principle-based reserve and risk-based capital calculations. (December 30, 2019)
Common Practices of Examining Actuaries Involved in Statutory Financial Solvency Examinations of Life and Health Insurers (Including Considerations for Principle-Based Reserves)
Exposure Draft of the PBR Review Procedures Work Group practice note on risk-focused examinations. Comments are due to the Academy by July 1, 2019.(April 02, 2019)
PBR Assumptions Resource Manual
PBR Assumptions Resource Manual Work Group sample framework for setting, updating, and governing life insurance assumptions for Principle-Based Reserving and other valuation frameworks. (January 29, 2019)
Life Principle-Based Reserves (PBR) Under VM-20 (2019 Updated)
Life Principle-Based Approach Practice Note Work Group update of the 2017 VM-20 Practice Note to reflect emerging practices and changes to the Valuation Manual since the version effective for 12/31/2018 valuations. (January 17, 2019)
Life Insurance Illustrations: Application of the NAIC Life Insurance Illustrations Model Regulation and Actuarial Standard of Practice No. 24
Life Illustration’s Work Group practice note assists actuaries in performing professional services in compliance with ASOP No. 24 and provides information to actuaries on current or emerging practices. (January 26, 2018)
Credit for Life Reinsurance in U.S. Statutory Financial Statements
Credit for Reinsurance Subgroup practice note, Credit for Life Reinsurance in U.S. Statutory Financial Statements. (February 2, 2018)
Asset Adequacy Analysis
Asset Adequacy Analysis Practice Note Work Group practice note assists actuaries who are faced with the requirement of asset adequacy analysis by providing examples of common approaches. (September 26, 2017)
Model Governance Practice Note
Principle-Based Reserve (PBR) Model Governance Practice Note Work Group practice note, Model Governance, providing additional information for practicing life actuaries seeking to better understand models, model risks, model governance, and related issues, as these actuaries implement PBR. (April 20, 2017)
Treatment of VOBA, Goodwill, and Other Intangible Assets Under PGAAP
Life Financial Reporting Committee practice note detailing practices on the treatment of value of business acquired (VOBA), goodwill, and other intangible assets under the purchase method of accounting of Generally Accepted Accounting Principles, or PGAAP. (October 15, 2014)
Optional Retrospective Application of ASU 2010-26 Acquisition Costs
Life Financial Reporting Committee practice note Optional Retrospective Application of ASU 2010-26 Acquisition Costs. (October 1, 2011)
Application of C-3 Phase II and Actuarial Guideline XLIII
Variable Annuity Practice Note Work Group practice note on the Application of C-3 Phase II and Actuarial Guideline XLIII. (April 6, 2011)
Market Consistent Embedded Values
Life Financial Reporting Committee practice note regarding Market Consistent Embedded Values. (March 16, 2011)
Actuarial Practices Relating to Accounting for Insurance Pursuant to International Financial Reporting Standards
Financial Reporting Committee practice note on Actuarial Practices Relating to Accounting for Insurance Pursuant to International Financial Reporting Standards. (March 1, 2011)
Scenario and Cell Model Reduction
Modeling Efficiency Work Group practice note regarding scenario and cell model reduction. (September 22, 2010)
Common Practices Relating to FASB Statement 133, Accounting for Derivative Instruments and Hedging Activities, As It Relates to Variable Annuities with Guaranteed Benefits
Life Financial Reporting Committee practice note to assist actuaries with application of FAS 133 with respect to variable annuities with guaranteed benefits. (February 2, 2010)
FAS 157 and FAS 159
Life Financial Reporting Committee practice note regarding compliance with Financial Accounting Standards (FAS) 157 and 159. (February 1, 2009)
Credibility
Life Valuation Subcommittee practice note intended to provide information on common practices and approaches related to actuarial issues for which credibility theory or a related approach may be applied. (July 1, 2008)
Embedded Values (EV) Reporting
Life Financial Reporting Committee practice note to assist actuaries working for life insurance companies with the calculation of embedded values. (May 1, 2008)
Anticipated Common Practices Relating to AICPA Statement of Position (SOP) 05-1: Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection With Modifications or Exchanges of Insurance Contracts
Practice note relating to AICPA Statement of Position 05-1 on insurance accounting for deferred acquisition costs in connection with modifications or exchanges of insurance contracts. (October 1, 2007)
NAIC Model Regulation XXX
Life Valuation Subcommittee practice note updating the initial practice note written in 2001 regarding the Actuarial Standard of Practice No. 40 (ASOP 40), and current practices used by actuaries in the United States under the National Association of Insurance Commissioners’ (NAIC) Model Regulation XXX. (December 1, 2006)
Application of C-3 Phase II
Practice note for the Application of C3 Phase II provides guidance to actuaries dealing with the implementation of the new C-3 Phase II (VA RBC) requirements for Variable Annuities (VAs). (September 1, 2006)
Reinsurance Reserve Credit
Life Valuation Subcommittee practice note providing a description of some of the current practices that could be used by actuaries in the United States regarding reinsurance reserve credit. (October 1, 2005)
Anticipated Common Practices Relating to AICPA Statement of Position 03-1: Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts
Life Financial Reporting Committee practice note on anticipated common practices relating to AICPA Statement of Position 03-1: accounting and reporting by insurance enterprises for certain nontraditional long-duration contracts and for separate accounts. (April 5, 2005)
Application of Actuarial Guideline XXXIX
Practice note presenting questions relative to the National Association of Insurance Commissioner’s (NAIC) Actuarial Guideline XXXIX – Reserving for Variable Annuities with Guaranteed Living Benefits. (December 1, 2002)
Special Issues for Variable Annuities
Committee on State Life Insurance Issues practice note divided into two sections, statutory reserve and accounting requirements, and asset adequacy analysis considerations. (July 23, 1999)
Policyholder Protection in Mutual Life Insurance Company Reorganizations
Life Insurance Financial Reporting Committee practice note regarding policyholder protection in mutual life insurance company reorganizations. (July 13, 1999)
Distribution of Policyholder Equity in a Demutualization
Life Financial Reporting Committee practice note regarding the distribution of policyholder equity in a demutualization. (July 10, 1999)
Current Retirement Practice Notes
Public Plans Committee Practice Note on Service Purchase
The Public Plans Committee released Introduction to Service Purchases for Public Pension Plans, a practice note considering a variety of service purchase programs that can be found across public sector pension plans, as well as plan administration topics that actuaries should be aware of when working with them. (February 2, 2024)
Selecting and Documenting Pension Assumptions Other Than Discount Rate, Investment Return, and Mortality
Pension Committee practice note, Selecting and Documenting Pension Assumptions Other Than Discount Rate, Investment Return, and Mortality, updating a 2009 practice note, revised to reflect updated actuarial standards of practice (ASOPs), including changes in ASOP Nos. 27 and 35 that are effective for actuarial reports issued on or after Aug. 1, 2021, and when the measurement date in such reports is on or after Aug. 1, 2021. (June 21, 2023)
Public Plans Committee Releases Practice Note on Fixed Rate Pension Funding
The Public Plans Committee published a practice note detailing considerations for working with public defined benefit pension plans that use fixed rate funding. (February 09, 2023)
Selecting and Documenting Mortality Assumptions for Pensions
Pension Committee public policy practice note, Selecting and Documenting Mortality Assumptions for Measuring Pension Obligations, updating a 2015 practice note, revised to reflect updated Actuarial Standards of Practice (ASOPs), including changes in ASOP No. 35 that are effective for actuarial reports issued on or after August 1, 2021, and when the measurement date in such report is on or after August 1, 2021. (January 19, 2023)
Practice Note on Modeling for Pension Actuaries
Pension Committee public policy practice note providing background and ideas about how a pension actuary might comply with ASOP No. 56, Modeling. (January 19, 2023)
Committee Releases Practice Note on Difficult-to-Value Plan Provisions
Pension Committee practice note providing information to actuaries on current or emerging practices regarding defined benefit pension plan provisions that may be difficult to adequately measure using traditional valuation procedures.(December 09, 2022)
Exposure Draft of Practice Note on ASOP No. 56
Exposure draft of a Pension Committee practice note providing background and ideas about how a pension actuary might comply with ASOP No. 56, Modeling. Please send comments to the pension policy analyst of the American Academy of Actuaries at pensionanalyst@actuary.org by January 31, 2021. (October 06, 2020)
ASOP No. 51: Risk Assessment in Practice
Pension Committee practice note providing information to actuaries on current or emerging practices affected by ASOP No. 51, Assessment and Disclosure of Risk Associated with Measuring Pension Obligations and Determining Pension Plan Contributions. (July 29, 2020)
Committee Publishes Practice Note on Actuarial Section of the Comprehensive Annual Financial Report
Public Plans Committee practice note reviewing current and emerging approaches to completion of the Actuarial section of the Comprehensive Annual Financial Report. (March 31, 2020)
Committee Practice Note on Working with Auditors
Pension Committee practice note Working With Auditors of Pension and OPEB Plans providing insights to actuaries on engaging with auditors. (December 11, 2019)
Pension Committee Releases Variable Annuity Practice Note
Practice note prepared by Pension Committee addressing current and emerging practices for measuring obligations of defined benefit pension plans, with respect to variable annuity benefits. (November 01, 2019)
Selecting Investment Return Assumptions: Considerations When Using Arithmetic and Geometric Averages
Pension Committee practice note providing discussion and background information on the determination of investment return assumptions with a focus on considerations relating to the use of the return assumption as a discount rate. (July 31, 2019)
Forecasting Investment Returns and Expected Return Assumptions for Pension Actuaries
Pension Practice Council practice note providing information on current and emerging practices in the selection of investment return assumptions based on anticipated future experience. (February 27, 2019)
Valuing Benefits Payable As A Lump Sum
Pension Committee practice note discussing the valuation of lump sum benefits for financial accounting purposes. (February 22, 2019)
Selecting Investment Return Assumptions Based on Anticipated Future Experience
Pension Committee exposure draft of practice note on current and emerging practices in the selection of investment return assumptions based on anticipated future experience. The comment deadline for this practice note is June 27, 2016. (April 26, 2016)
Variable Annuity Plans
Pension Committee exposure draft of practice note for measuring obligations of defined benefit pension plans that include variable annuity benefits. (December 11, 2015)
Selecting and Documenting Mortality Assumptions for Pensions
Pension Committee's practice note, “Selecting and Documenting Mortality Assumptions for Pensions,” revised to reflect a new mortality improvement scale (BB) published by the Retirement Plans Experience Committee (RPEC) of the Society of Actuaries in 2012, mortality table RP-2014, and mortality improvement scale MP-2014 published by the Society of Actuaries in 2014. (June 15, 2015)
Working with Pension Plan Auditors
Pension Accounting Committee practice note with information for actuaries on current practices relevant to the audit of pension plan financial information that is subject to US generally accepted accounting principles (US GAAP). (May 24, 2011)
Preparing a Certification of the Adjusted Funding Target Attainment Percentage (AFTAP) for a Pension Plan
Pension Committee practice note regarding current and emerging practices in the preparation of the certification of a U.S. tax-qualified pension plans adjusted funding target attainment percentage (AFTAP), as required under the benefit-restriction provisions of the Pension Protection Act of 2006 (PPA) and associated regulations. (December 1, 2009)
Selecting and Documenting Other Pension Assumptions
Pension Committee practice note with information for actuaries current and emerging practices in the selection and documentation of certain actuarial assumptions for measuring obligations of defined benefit pension plans. (October 12, 2009)
Multiemployer Plan Actuarial Certifications under the Pension Protection Act of 2006
Pension Committee draft practice note providing guidance to actuaries preparing actuarial certifications for multiemployer pension plans under the Pension Protection Act of 2006 (PPA). (December 10, 2007)
Valuation of Employee Stock Options
Pension Practice Council draft practice note to provide guidance to actuaries and others performing valuations under the Financial Accounting Standards Board’s (FASB’s) Statement of Financial Accounting Standard (FAS) Number 123, Share-Based Payments, as amended in December 2004 (FAS 123R). (October 10, 2006)
