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SAO Changes Then and Now

SAO Changes Then and Now. Casualty Loss Reserve Seminar September 2006. OUTLINE OF PRESENTATION. Background on Herbers History Lesson Changes for 2006 Qualification Standard (2 nd Exposure Draft) Peculiar Issues Q&A. BACKGROUND ON HERBERS. COPLFR Member since 1998

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SAO Changes Then and Now

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  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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