Presentation on theme: "Skit on Reserving Committee on Professionalism Education."— Presentation transcript:
Skit on Reserving Committee on Professionalism Education
Agenda Professional Guidance Skit Small Group Discussion Large Group Discussion Takeaways
Professional Guidance Precept 1 of the Code of Conduct: An Actuary shall act honestly, with integrity and competence, and in a manner to fulfill the profession's responsibility to the public and to uphold the reputation of the actuarial profession.
Professional Guidance Precept 1 of the Code of Conduct Annotation An Actuary shall perform Actuarial Services with skill and care. Annotation An Actuary shall not engage in any professional conduct involving dishonesty, fraud, deceit, or misrepresentation or commit any act that reflects adversely on the actuarial profession.
Professional Guidance Precept 8 of the Code of Conduct: An Actuary who performs Actuarial Services shall take reasonable steps to ensure that such services are not used to mislead other parties. Precept 10 of the Code of Conduct: An Actuary shall perform Actuarial Services with courtesy and professional respect and shall cooperate with others in the Principal's interest.
Professional Guidance Rule 2 Candidates Version of the Code of Conduct: An Actuarial Candidate shall not engage in any professional conduct involving dishonesty, fraud, deceit, or misrepresentation or commit any act that reflects adversely on the actuarial profession.
Professional Guidance CAS Statement of Principles Regarding Property and Casualty Loss and Loss Adjustment Expense Reserves Section III -- Understanding the trends and changes affecting the data base is a prerequisite to the application of actuarially sound reserving methods. A knowledge of changes in underwriting, claims handling, data processing and accounting, as well as changes in the legal and social environment, affecting the experience is essential to the accurate interpretation and evaluation of observed data and the choice of reserving methods.
Professional Guidance ASOP 36: Statements of Actuarial Opinion Regarding Property/Casualty Loss and Loss Adjustment Expense Reserves Section 3.9: Adverse Deviation -- The actuary should consider whether there are significant risks and uncertainties that could result in future paid amounts being materially greater than those provided for in the reserves.
Professional Guidance ASOP 43: Property/Casualty Unpaid Claim Estimates Section 3.6.7: Changing Conditions -- The actuary should consider whether there have been significant changes in conditions, particularly with regard to claims, losses, or exposures, that are likely to be insufficiently reflected in the experience data or in the assumptions used to estimate the unpaid claims.
Legal Disclosure The views expressed by the panelists are their own and may not necessarily reflect those of their respective employers.
Skit Background Sally is a senior manager at Actuaries Plus and a Fellows of the Casualty Actuarial Society. James is an actuarial student at Actuaries Plus. He has passed five exams and has three years of experience. Anthony is an employee at Surf-N-Sure, a small online insurance carrier which sells mostly auto residual value insurance.
Skit Background Actuaries Plus has been steadily growing for the past few years and has recently brought on a new chief actuary who is pursuing an aggressive growth strategy for the firm. The chief is accepting many new customers, even small insurers. Sally is opposed to this strategy. This new direction has placed a lot of demands on Sally, including completing a reserve analysis for Surf-N-Sure. Anthony is her contact at Serf-N-Sure. He follows up with Sally constantly and is a little long-winded, making her day even busier.
Skit Background Surf-N-Sure sells mostly auto residual value insurance which helps guarantee an asset will have a particular value at a future date. The expected future value of a vehicle is set when the policy begins and if the actual future cash value is less than expected, the insurance covers the difference. An auto company who does leasing might use this product to protect the value of cars that get returned at lease end. Ultimately, used car prices really influence how much we pay: the higher the used car price, the less we have to pay.
Lights, Camera, Action!
General Questions What are James’ professional obligations? What, if any, are James’ obligations to Actuaries Plus and Surf- N-Sure? Are his obligation impacted by the fact that he is an actuarial student? What are Sally’s professional obligations? Specifically, what is her obligation to her actuarial student, James’?
Small Group Discussion
Discussion of General Questions What are James’ professional obligations? What, if any, are James’ obligations to Actuaries Plus and Surf- N-Sure? Are his obligation impacted by the fact that he is an actuarial student? What are Sally’s professional obligations? Specifically, what is her obligation to her actuarial student, James’?
Possible Courses of Action James’ Options Alternative 1 -- Comply with Sally’s request. Alternative 2 – Report the issue to the chief actuary of Actuaries Plus. Alternative 3 – Contact Surf-N-Sure
Key Takeaways Changing work environments and work load can cause an actuary to move to fast and forget to stop and apply professional standards. Know the Standards that apply to the work you are doing