ASOPs

Question 1

ASOP 12: Risk Classification

Purpose

Answer 1

Provide guidance to actuaries with respect to designing, reviewing, or changing risk classification systems

Question 2

ASOP 12: Risk Classification

Considerations in Selection of Risk Characteristics

Answer 2

• Relationship of risk characteristics and expected outcomes
• Causality
• Objectivity
• Practicality
• Applicable law
• Industry/business practice

Question 3

ASOP 12: Risk Classification

Considerations in Establishing Risk Classes

Answer 3

• Intended Use
• Actuarial Considerations
  
  • Adverse selection
  • Credibility
  • Practicality
• Other (Compliance, industry practice)

Question 4

ASOP 12: Risk Classification

Testing Risk Classification System

Answer 4

• Test long-term viability of system
• Effect of adverse selection
• Risk classes used to testing
• Effect of changes
• Quantitative analysis

Question 5

ASOP 23: Data Quality

Analysis of Issues and Recommended Practices

Answer 5

• Selection of data
• Reliance on other information
• Review of data for reasonableness and consistency

Question 6

ASOP 23: Data Quality

Selection of Data

Answer 6

• Desired data elements and alternatives
• Appropriateness for intended use
• Sufficiently current
• Reasonableness and comprehensiveness
• Internal/external consistency
• Material limitations
• Feasibility of alternative data
• Sampling methods to collect data

Question 7

ASOP 23: Data Quality

Limitations of Actuary’s Responsibility

Answer 7

• Determine if data supplied by others was falsified
• Develop compilations solely to search for questionable data
• audit data

Question 8

ASOP 23: Data Quality

Disclosures

Answer 8

• Source
• Whether actuary reviewed
• Reliance on data
• Material adjustments
• Limitations on work due to data quality
• Unresolved concerns
• Highly uncertain results including potential magnitude
• Conflicts from complying with regulations

Question 9

ASOP 25: Credibility Procedures

Analysis of Issues and Recommended Practices

Answer 9

• Purpose and Use (evaluate experience of subject for potential use in assumption setting)
• Selection or Development
• Selection of Relevant Experience
• Homogeneity of data

Question 10

ASOP 41: Actuarial Communications

Disclosures

Answer 10

• Scope
• Methods, assumptions, data used
• Actuarial findings
• Identification of responsible actuary
• Identification of actuarial documents
• Intended users
• Cautions about risk and uncertainty
• Limitations on use of findings
• Conflict of interest
• Information data
• Subsequent events

Question 11

ASOP 41: Actuarial Communications

Actuarial Communications, Documents, Reports

Answer 11

• communications = written, electronic, or oral by actuary with respect to actuarial services
• Document = actuarial communication in any recorded form
• Report = Actuarial documents available to an intended user that the actuary determines relevant to specific actuary findings