Ethical Issues Forum: Is It An Actuarial Opinion?

Editor's Note: This article is part of a series written by members of the CAS Committee on Professionalism Education (COPE) and the Actuarial Board of Counseling and Discipline (ABCD). The opinions expressed by readers and authors are for discussion purposes only and should not be used to prejudge the disposition of any actual case or modify published professional standards as they may apply in real-life situations.

Kirk is an FCAS and vice president of the actuarial department of the Pretty Big Insurance Company. As such he is involved with the major decision-making and direction-setting for the department, but he does not get involved in any of the detail work of the department.

The state of Overregulation requires that annually you submit a data call listing homeowner exposures and the changes that have occurred since the prior year. Since the information is put together in the actuarial department, Kirk is asked to sign the form and affirm that the information is "an accurate, properly prepared reflection of the company's writings in Overregulation to the best of his knowledge and belief."

Questions:

Because Kirk is an FCAS, does he have an obligation to meet the Qualification Standards for Prescribed Statements of Actuarial Opinion (PSAO), that is, does he have a higher requirement being an FCAS than he might have as an officer of Pretty Big?

Does it matter if Kirk puts "FCAS" after his name to add credence to his signature in the eyes of the regulators?

Response:

The data being requested by the state of Overregulation is merely exposure data.

Although the information is put together in the actuarial department, it must be assumed that this information is widely available within Pretty Big Insurance Company, and that this information could just as easily be provided by and approved by officers in other nonactuarial functions of the company.

Furthermore, the information requested does not seem to meet the definition for a PSAO (on which qualification standards are based). Specifically, on page 18 of "Qualification Standards for Prescribed Statements of Actuarial Opinion," item J notes that certification of data requested by state insurance departments are NOT PSAOs "unless presented as an opinion issued for the purpose of compliance with law, regulation, an Actuarial Standard of Practice…." The department of insurance has not requested an opinion, and therefore this response is not a PSAO and qualification standards are not applicable. In addition, Kirk should include "FCAS" after his name if that is part of his title within the company.