50. How does an actuary meet the qualification requirements to issue statements of actuarial opinion (SAOs) that blend elements of two or more areas of actuarial practice? What qualification requirements apply when the blended SAO involves the review of o
Two examples of such “blended opinions” are long-term care (LTC) opinions, which typically blend elements of life and health, and other postemployment benefits (OPEB), which often blend pension and health. A credentialed actuary who issues a blended opinion when providing Actuarial Services must satisfy the requirements contained in the U.S. Qualification Standards (USQS) as follows:
USQS section 2.3.2, Statements of Actuarial Opinion that Blend Elements of Two or More Areas of Actuarial Practice, provides the proper guidance regarding the qualifications required for an actuary to issue a blended opinion.
Section 2.3.2 acknowledges that an actuary who is fully qualified in one area of actuarial practice (for example, pension) may acquire sufficient expertise in another area of actuarial practice, namely the other “blended” area (for example, health), through continuing education (CE) provided that the CE includes material in “all areas of actuarial practice relevant to the SAO.” Each actuary must determine the chosen CE’s relevance to the area of practice. In the example mentioned in this paragraph, the actuary is expected to have sufficient CE related to health, the “blended” area of practice in the example. “Relevant” for the purpose of the USQS is defined in USQS section 2.2.7. An actuary who issues a blended opinion should ensure that some of the actuary’s CE relates specifically to the subject of the opinion.
An actuary who issues a blended opinion must be mindful of the guidance in USQS section 2.3.2, which states, “An actuary may find it prudent to work with an actuary with complementary experience and education …” An actuary who intends to issue a joint opinion with another actuary (as opposed to a blended opinion issued by a single actuary) should refer to USQS section 2.4, Statements of Actuarial Opinion Issued by More Than One Actuary. An actuary should also refer to the guidance in ASOP No. 41, Actuarial Communications, concerning responsibility for opinions.
An actuary qualified in one practice area may wish to issue a blended opinion and state reliance on an actuary qualified in the other practice area, without issuing that opinion with another actuary (joint opinions are described in USQS section 2.4). For example, in issuing an OPEB opinion, an actuary qualified in the pension area may wish to state reliance on the work performed by an actuary qualified to issue an SAO in the health area. To be the sole issuer of the SAO, the actuary issuing the SAO (in this example, the pension actuary) must be qualified to professionally assess the appropriateness of the information or results provided by the second actuary (in this example, the health actuary). In meeting the USQS requirement of at least 30 hours of annual CE, the issuing actuary must include a reasonable combination of relevant CE for all areas of the SAO (in this example, both pension and health). The issuing actuary may consider the amount and type of input received from the second actuary in deciding how much of each type of relevant CE the issuing actuary needs.
Last revised July 2018