Up to Code
on Property and Casualty Loss Reserves,
which included the following illustrative
wording that is similar to what the actuary
“This Actuarial Opinion Summary
was prepared solely for the Company
for filing with regulatory agencies and
is not intended for any other purpose.
Furthermore, it contains information
that is a trade secret and therefore,
if disclosed, would cause substantial
injury to ABC Insurance Company’s
competitive position. Therefore, I re-
quest that this Summary and informa-
tion contained therein be maintained
confidential and I request an exception
from disclosure under the Freedom of
Insurance Act/Laws of your state.”
That practice note also includes instruc-
tions from the NAIC on the preparation of
the Actuarial Opinion Summary (AOS):
“The AOS contains significant pro-
prietary information. It is expected
that the AOS be held confidential and
is not intended for public inspection.
The AOS should not be filed with the
NAIC and should be kept separate
from any copy of the Statement of
Actuarial Opinion in order to maintain
confidentiality of the AOS. The AOS
can contain a statement that refers to
the Statement of Actuarial Opinion
and the date of that opinion.”
The actuary needs to begin these dis-
cussion early in the process—because
some clients will not agree with the ac-
tuary’s point of view. Then there will be
time to see whether the actuary can reach
an accommodation with the client. For
example, a report might be allowed to be
released, but the report is worded under
the expectation that unsophisticated users
may read it. Potential language in such a
situation includes the report should be
reviewed only in its entirety, the report
is technical in nature, and the report re-
quires certain types of expertise (e.g., life
reserving techniques, casualty ratemaking
processes, health Medicare Advantage bid
It is useful for the actuary to consider what types of expertise are needed to
understand the report, even if the distribution is limited. For example, does the
report properly discuss any issues about the
data used or assumptions selected that are
needed to properly understand the results?
Planning ahead is always useful.
Section 3. 1. 2 of ASOP No. 41, Actuarial
Communications, reminds us: “The actuary
should take appropriate steps to ensure that
each actuarial communication is clear and
uses language appropriate to the particular
circumstances, taking into account the
That advice is important for anyone
who disseminates actuarial communications.
GODFREY PERROTT, MAAA, FSA, is
a member of the Actuarial Board for
Counseling and Discipline.
The Academy’s Committee on Qualifications provides answers to more
than 50 frequently asked questions. Make these FAQs on the U.S.
Qualification Standards your first stop in your search for an answer.
FIND YOUR ANSWER
Have a question about continuing education
or qualification requirements?