Loss Reserve Opinion Requirements

Significant changes in the scope and wording for loss reserve opinions have been adapted by the NAIC for 1991, 1992, and 1993. These include expansion of the scope of the opinion to address direct and assumed reserves as well as net reserves, commentary on discount, salvage/subrogation, financial reinsurance, loss portfolio transfers, reinsurance recoverability, exceptional values under NAIC IRIS tests, amounts for anticipated salvage/subrogation, discounts for the time value of money, net reserves for underwriting pools and associations, reconciliation to Schedule P, the concept of appointed actuary, and requirements for a formal actuarial report. This session covers two general areas. First, the session will review the problems, pitfalls and successes experienced in satisfying the expanded requirements over the last three years. Particular attention will be attached to the Property and Casualty Practice Note 1994-1 prepared by the AAA Committee on Property and Liability Financial Reporting. The perspective will be from both company and consulting actuaries. Second, this session will describe new requirements in place for 1994. Emphasis will be upon the practical aspects and requirements for 1994.