It depends upon the currency. =
Most major currencies have their cycles when they're stronger than the $U=
S =
(i.e. it takes more $US to buy them than usual) and they're weak against
the dollar. Canadian dollars, which are likely the bulk of foreign
exposures for most US companies, are a good example. Typically it's abou=
t
$0.85 US; I've seen it range from less than $0 .75 to almost $1.00. I
would hope the companies with exposures in currencies with this type of
fluctuation would be doing their reserves using data in the original
currency, but adjusting Schedule P, in my opinion, wouldn't be worth the=
trouble. =
On the other hand, there are currencies with an almost steady trend
downward against the $US (many Eastern European and South American
currencies) which could distort loss development if they were a significa=
nt
part of the business. I doubt if they're a major factor in most companie=
s'
portfolios, though, and I couldn't picture the NAIC trying to decide whic=
h
currencies need to be adjusted and which don't. =
I think this is better handled on an individual basis in an examination.
Regina Berens
MBA, Inc.-Consultants in Casualty Actuarial Science
http://ourworld.compuserve.com/homepages/MBAInc
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