CAS Releases Statement of Principles Regarding Property and Casualty Unpaid Claims Estimates
To: CAS Members
Re: Statement of Principles Regarding Property and Casualty Unpaid Claims Estimates
The CAS Board of Directors has adopted the Statement of Principles Regarding Property and Casualty Unpaid Claims Estimates, which is a revised and renamed version of the now-rescinded Statement of Principles Regarding Property and Casualty Loss and Loss Adjustment Expense Reserves that was adopted in 1988.
The adoption of this new Statement of Principles follows the release of a Discussion Draft, and then later an Exposure Draft, in 2013. The CAS Task Force for the Review and Update of the Statements of Principles reviewed comments submitted on the drafts by CAS members and other interested parties, and the final adopted Statement reflects the input received.
The Statement of Principles Regarding Property and Casualty Unpaid Claims Estimates contains many changes from the original Statement of Principles Regarding Property and Casualty Loss and Loss Adjustment Expense Reserves. Most notably, because the original Principles were created before any standards of practice were developed or promulgated by the Actuarial Standards Board (U.S.), the original Statement contained several instances of standards-type concepts and language. The principal objective of revising the original Principles was to update them and to revise them where necessary to contain principles only, not standards of practice.
This newly adopted Statement is not intended to provide prescriptive practice guidance to actuaries. Such practice guidance for actuaries has been developed in the U.S., for example, by the Actuarial Standards Board (U.S.) in the form of Actuarial Standards of Practice. The newly adopted Statement has been worded to more clearly address principles in terms of definitions and concepts. Most of the items included in the Considerations sections of the original Statement have been eliminated because they were deemed to be more properly incorporated into standards of practice.
Practicing actuaries should ensure that they comply with relevant laws, regulations, standards or other requirements, which may refer to, or include content from, this revised Statement or the original CAS Principles. In addition, CAS members are subject to our Code of Professional Conduct, which refers to “professional judgment, taking into account generally accepted actuarial principles and practices,” where there is not an applicable standard of practice.
I thank the CAS members and interested parties who submitted comments on the drafts. I also commend the work of the members of the Task Force who, at one point or another during this multi-year effort, participated in reviewing and revising the Statement adopted by the Board, including:
Christopher S. Carlson, Chairperson
Shawna S. Ackerman
Eugene C. Connell
Gregory L. Hayward
Mary D. Miller
Cynthia M. Potts David S. Powell Ezra Robison
Jason L. Russ
Patrick B. Woods
J. Michael Boa, Staff Liaison
Robert S. Miccolis CAS President