Academy Releases Revamped Practice Note on SAOs on P/C Loss Reserves
The Committee on Property and Liability Financial Reporting (COPLFR) released the Statements of Actuarial Opinion on Property/Casualty Loss Reservespractice note. The practice note provides information to actuaries on current or emerging practices in which their peers are engaged related to signing NAIC P/C statements of actuarial opinion (SAOs) and actuarial opinion summaries.
COPLFR has rewritten the annual practice note this year not only to update it, but also to make it easier for practicing actuaries to follow and use it. Download the revised SAO P/C Loss Reserves practice note now.
Contingencies Released
The January/February digital version of Contingencies is now available. President-Elect Bob Beuerlein explores how the actuarial profession is responding to the preponderance of “Big Data,” and how it can continue to inform this burgeoning field. The issue also includes the cover story, “The 3 Rs: A Checkup,” which checks on the vital risk-sharing mechanisms of the Affordable Care Act (ACA) with one full year of data collected; “Fluid Dynamics: Laboratory Testing and Life Underwriting,” a look at the present and future of the lab tests that life underwriters use in assessing risk; “Calculating Doomsday,” an examination of how actuaries are leading the discussion around the risks associated with the Cascadia Subduction Zone; and Academy President Tom Wildsmith’s thoughts on what it means to be a “professional.” Up to Code, Inside Track, letters, puzzles, and more fill out this issue.
Upcoming Events
“Keeping Current: Changes to the 2015 SAO P/C Loss Reserves Practice Note”: This Jan. 14 webinar will help signers of SAOs keep up to date with the latest NAIC instructions. The recently released 2015 Statement of Actuarial Opinion P/C Loss Reserves practice note has been revised to improve its format and presentation. This webinar, co-hosted by the Academy’s Casualty Practice Council and the Casualty Actuarial Society, will be a guide to the updated practice note and will highlight a few areas of practice related to preparing SAOs. Discounted rates are available through Monday, Jan. 11—register now.
“ORSA: A Short Duration Health Perspective”: A Jan. 25 webinar will provide a perspective on how actuaries can add value to an Own Risk and Solvency Assessment (ORSA) and illustrate Operational Risk Management (ORM) practices. A perspective on how regulators approach ORSA will also be presented, along with a regulatory standpoint on insights from the ORSA pilot and feedback. Presenters will describe the basics of ORSA, including the purpose, process, and the actual report, as well as the trends driving ORM practices. Cybersecurity threats will also be discussed. Register now.
“An International Discussion on Risk Adjustment”: The European Risk Adjustment Network (RAN) is an informal annual gathering of risk adjustment experts (academic and governmental) from several European countries and Israel who meet to exchange ideas on the latest research in applied risk adjustment. These insights provide relevant lessons to other countries that have evolved a risk adjustment mechanism for their health care programs. The Academy’s Health Practice International Committee and the International Actuarial Association Health Section (IAAHS) are pleased to offer a webinar that provides members with a look at the information coming out of this annual meeting. Panelists will provide a report on the discussions, including specific reports from each country in Europe that can be applied to the ACA’s risk adjustment program implemented recently in the United States. This Jan. 27 webinar is free for Academy members—register now.
P/C Loss Reserve Law Manual Available for Order
The Academy’s 2015 P/C Loss Reserve Law Manual is now available for order. The manual, which is updated annually and designed to help appointed actuaries comply with NAIC annual statement requirements, includes SAO requirements and state laws and regulations establishing those requirements; annual statement instructions for the SAOs for P/C, title loss, and loss expense reserves; and other pertinent annual statement instructions.
The manual is available in two formats—web/online or CD-ROM—and members can order online by logging in to Academy’s website. Orders also may be placed via mail/fax. For questions or additional information, please contact Leiloni Hayward, public policy senior administrative assistant, at 202-223-8196 or hayward@actuary.org.
Recently Released
In the December Actuarial Update, new Actuarial Standards Board (ASB) Chairperson Maryellen Coggins highlights key issues facing the ASB in 2016, including public pension plans. Also included are a rundown of new members on both the ASB and the Actuarial Board for Counseling and Discipline (ABCD); highlights on ways ABCD guidance can help you from a recent Council on Professionalism webinar; and the “Professionalism Counts” column, which encourages actuaries to keep the Code of Professional Conduct in their pocket.
In the Winter 2015 edition of PBA Perspectives, the Academy’s quarterly update on regulatory, legislative, and Academy activities surrounding the implementation of the principle-based approach (PBA) for life insurance, read about how the NAIC’s threshold for insurers to begin using principle-based reserving (PBR) has nearly been met, even as a handful of items still need to be completed before the anticipated implementation date of Jan. 1, 2017, including a 2016 PBR pilot project. Also discussed is an NAIC Fall Meeting wrap-up, including the PBR Implementation (EX) Task Force and the Life Actuarial Task Force; the Academy’s post-NAIC webinar; and an update on PBR progress among the states.
Alerts
The NAIC Executive (EX) Committee and Plenary adopted amendments to the Credit for Reinsurance Model Law (#785). The changes allow a commissioner to adopt additional requirements relating to: “(1) the valuation of assets or reserve credits; (2) the amount and forms of security supporting reinsurance arrangements described in Section 5B; and/or (3) the circumstances pursuant to which credit will be reduced or eliminated.”
The U.S. House of Representatives, in a symbolic vote on Wednesday, passed a bill to repeal the ACA, sending the legislation to President Obama for the first time. The president vetoed the measure on Friday. Read the full alert here or in the member section of the website under “Health Alerts.”
Alert subscriptions: Alerts subscribers are notified by email when a new alert is posted in their area(s) of interest. The alerts focus on five areas: casualty, health, life, pension, and cross-practice issues. Academy members may subscribe to any or all of them after signing in to the member section of the website.
Public Policy Activities
The Pension Accounting Committee submitted comments to the ASB on a proposed revision to ASOP No. 21, Responding to or Assisting Auditors or Examiners in Connection with Financial Audits, Financial Reviews, and Financial Examinations.
The Risk Sharing Subcommittee sent a letter to the Centers for Medicare & Medicaid Services (CMS) on Notice of Benefit and Payment Parameters for 2017.
In the News
FactCheck.org cited the Academy’s issue brief, Implications of Medicaid Expansion Decisions on Private Coverage, in a story about statements by Democratic presidential primary candidate Hillary Clinton regarding the relationship between state Medicaid expansions and private health insurance premium increases. The Tucson Sentinel also ran the story.
The Academy issue brief, Drivers of 2016 Health Insurance Premium Changes, continues to be relied upon by news organizations and analysis sites as covering the emerging story of 2016 health insurance premiums. PolitiFactcited the Academy’s analysis in a story that fact-checks statements by House Speaker Paul Ryan (R-Wis.) regarding expected 2016 rate increases in relation to the ACA. The issue brief was also cited in a story by Health Payer Intelligence that provided an in-depth analysis of the various factors influencing 2016 rates.
A preliminary Regulatory Impact Assessment issued by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) cites analysis from the Academy’s Essential Elements paper, “Terrorism Risk Insurance.” FinCEN is currently requesting comments on the assessment that will regulate customer due diligence requirements for financial institution rulemaking.
The Academy’s discussion paper, Risky Business: Living Longer Without Income for Life, was cited in a blog post by TheMilitaryWallet.com explaining thrift savings plans for military or federal government personnel.
A feature story in January 2016 issue of Investment Advisor magazine quoted from North Dakota Insurance Commissioner Adam Hamm’s keynote address on the significance of cyber-risk to the insurance industry at the Academy’s 2015 Annual Meeting and Public Policy Forum. Links to highlights and photos from the meeting are available here, and slides from many sessions are available here to members who attended the meeting.
A Health Practice Council letter to Health and Human Services (HHS) Secretary Sylvia Mathews Burwell was cited on healthinsurance.org in a piece examining premium subsidies for participants in Kansas’ health insurance marketplace.
A U.K.-based pension consulting firm cited findings from the Academy paper The Challenge of Longevity Risk: Making Retirement Income Last a Lifetime in a blog post regarding the longevity risk implications in new government estimates that show newborns in the United Kingdom are now expected to live into their 90s. The paper was a joint project of the Academy, the U.K. Institute and Faculty of Actuaries, and the Actuaries Institute of Australia that highlights risks associated with longevity and asset decumulation.
The Risk Sharing Subcommittee’s Dec. 20 letter to HHS regarding the proposed rule on benefit and payment parameters for 2017 was posted in Benefitslink.com.
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