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Actuarial Changes: Understanding the Shifts and Standards in P/C Loss Reserves (SAO Seminar 2006)

Explore the evolution of P/C Loss Reserve Opinions with a focus on new standards, qualifications, and peculiar issues, outlined in this insightful seminar presentation from September 2006.

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Actuarial Changes: Understanding the Shifts and Standards in P/C Loss Reserves (SAO Seminar 2006)

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Presentation Transcript

  1. SAO ChangesThen and Now Casualty Loss Reserve Seminar September 2006

  2. OUTLINE OF PRESENTATION • Background on Herbers • History Lesson • Changes for 2006 • Qualification Standard (2nd Exposure Draft) • Peculiar Issues • Q&A

  3. BACKGROUND ON HERBERS • COPLFR Member since 1998 • Faculty for AAA Seminar on Effective P/C Loss Reserve Opinions • Practice Note Subcommittee • Appointed Actuary for 21 companies in 2005 • CAS Forum paper on Materiality and SAOs (2004)

  4. History

  5. History (cont.)

  6. History (cont.)

  7. History (cont.)

  8. History (cont.)

  9. History (cont.)

  10. Changes for 2006 • Title Opinion Instructions • Clarification that AOS is a separate document from SAO • New CATF Guidance

  11. Qualification Standards • Qualifications Standards for Prescribed Statements of Actuarial Opinion, including: Specific Qualifications Standards for the Statement of Opinion, NAIC Property Casualty Annual Statement • Code of Professional Conduct

  12. Qualification Standards for Prescribed Statements of Actuarial Opinion • Basic Education – • Successful completion of applicable exams • Alternative basic education • Responsible program of work and study • Supported by a written statement of an actuary qualified to issue a PSAO • Continuing Education – Enough to remain current. At a minimum average of 12 hours/year relevant to the PSAO • At least half in organized activities • Recordkeeping • Experience Requirements – at least 3 years of experience under the review of an actuary qualified to issue the PSAO • Acknowledgment of Qualifications

  13. 2nd Exposure DraftQualifications Standards for Actuaries Issuing Statements of Actuarial Opinion in the U.S. • Released January 2006 - comment deadline 7/1/06 • General Qualification Standard – Committee on Qualifications recommends increasing the current Continuing Education requirement of 24 hours over 2 years to an annual 30-hour requirement that is “relevant to the subject of the SAOs that they issue.” • Specific Qualification Standards – Committee recommends increase from 12 to 15 hours annually. At least 6 of 15 hours must involve interaction with outside actuaries or other professionals.

  14. Peculiar Issues • CA WC Schedule P (2004) • Colorado (2006) • RRG in District of Columbia • Extended reporting reserves • When to follow NAIC format? • What’s coming next?

  15. Q & A

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