Actuarial Standards & Ethical Guidelines Flashcards
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Read the first 7 Actuarial Standards & Ethical Guidelines flashcards as text
ASOP No. 43 (Property/Casualty Unpaid Claim Estimates) requires an actuary to select a 'risk margin' in which situation?
Answer: When the actuary is opining that reserves are adequate rather than estimating a point reserve
ASOP No. 43 addresses when risk margins are appropriate, particularly in contexts involving adequacy opinions rather than pure point estimates.
The term 'principal' in the CAS Code of Professional Conduct refers to:
Answer: A client, employer, or other party on whose behalf the actuary performs actuarial services
A principal is any client, employer, or party on whose behalf the actuary acts, not limited to senior management.
Which ASOP establishes standards for actuaries performing reserve analyses for workers' compensation self-insured groups?
Answer: ASOP No. 43 (Property/Casualty Unpaid Claim Estimates)
ASOP No. 43 broadly covers P&C unpaid claim estimates including those for self-insured programs such as workers' compensation groups.
An actuary discovers that the prior appointed actuary for a client made a significant methodological error. The new actuary's obligation under professional standards is to:
Answer: Disclose the discrepancy in their own actuarial communication and advise the principal
The new actuary must disclose material discrepancies with prior work and advise the principal, not conceal the issue.
Under the professionalism framework, 'actuarial soundness' of a rate filing most closely means that:
Answer: The rates are based on reasonable assumptions, appropriate methods, and relevant data
Actuarially sound rates are grounded in reasonable assumptions, appropriate actuarial methods, and relevant credible data.
When an actuary performs actuarial services for multiple clients whose interests may be in conflict (e.g., a cedent and a reinsurer in a dispute), which action best satisfies the Code?
Answer: Disclose the conflict to both principals, obtain informed consent from each, and ensure objectivity
The Code requires full disclosure of the conflict to both principals and their informed consent before the actuary may proceed.
ASOP No. 20 (Discounting of Property and Casualty Unpaid Claim Estimates) applies when an actuary discounts unpaid claim estimates. Which is a required disclosure under this standard?
Answer: The discount rates used and the payment pattern assumed
ASOP No. 20 requires disclosure of the discount rates and the payment pattern underlying the discounting calculation.