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2006 General Meeting Assemblée générale 2006 Chicago, Illinois

Canadian Institute of Actuaries. L’Institut canadien des actuaires. 2006 General Meeting Assemblée générale 2006 Chicago, Illinois. Guidance from CLIFR on Section 3855. Educational note Revisions to existing guidance notes Fall Letter. Educational Note.

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2006 General Meeting Assemblée générale 2006 Chicago, Illinois

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  1. Canadian Institute of Actuaries L’Institut canadien des actuaires 2006 General Meeting Assemblée générale 2006 Chicago, Illinois

  2. Guidance from CLIFR on Section 3855 • Educational note • Revisions to existing guidance notes • Fall Letter

  3. Educational Note • CALM Implications of AcSB Section 3855 Financial Instruments – Recognition and Measurement • published June 2006 • discusses the impact of accounting changes on valuation • includes discussion of the various classification options available • input from ASB, Committee on AA, OSFI

  4. Educational Note • Outlines • True-ups and approximations (roll forward mechanisms) • the issues with using the Available for Sale designation on assets backing liabilities • Where qualified opinions may be appropriate • Future Tax implications • Issues with policy liabilities traditionally estimated as an ‘account value’ • Important control issues

  5. Revision to Existing Guidance • Reviewed and not changed • Standards of Practice - General • Standards of Practice - Practice Specific Standards for Insurers • Margin for Adverse Deviations • Communication between the Actuary and the Auditor • Future Income and Alternative Taxes

  6. Revision to Existing Guidance • Recommended changes to • Segregated Fund Investment Guarantees • Approximations to CALM • Best Estimate Assumptions for Expenses

  7. Revision to Existing Guidance – Fall Letter (Draft) • Implications of 3855 on Tax • Tax implications recognized when new Accounting Standard Effective • Industry has made a proposal (CLHIA) in regard to implications • As of this point no formal response from Finance • caution should be used in projecting any favorable tax timing results in the meantime

  8. Revision to Existing Guidance – Fall Letter (Draft) • Other Policy Liabilities • Reminder that CALM is to be applied to Policy Liabilities including: • Actuarial liabilities • Provisions for Claims • Provision for Dividends and ERR’s • Amounts on Deposit • Policy Liability related Accounting Provisions for Future Tax • Guidance on determining when the term of these liabilities is independent of the term of the base actuarial liability

  9. Revisions to Existing Guidance • CALM Approximations note • building on Town Hall roll forward discussions • Town Hall presentations available on CIA website • Status – in approval process • Best Estimate Expense Note • Expenses currently often based on carrying value of asset • Suggests other bases that may be more appropriate • Status – in approval process

  10. Revision to Existing Guidance • Segregated Funds Investment Guarantees • Need to adjust ‘discount rate’ to reflect assets backing are now likely marked to market • Discussion of this issue included in the ‘Considerations in the Valuation of Segregated Fund Annuities’ • Presentations made at Annual meeting and AA Seminar (and tomorrow) • Status – under development with an expected timing of next Spring

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