Materiality and ASOP No. 36: Considerations for the Practicing Actuary

The Casualty Actuarial Society's (CAS) Valuation, Finance, and Investments Committee (VFIC) has prepared the attached note entitled "Materiality and ASOP No. 36: Considerations for the Practicing Actuary". Actuarial Standard of Practice No. 36, Statements of Actuarial Opinion Regarding Property Casualty Loss and Loss Adjustment Expense Reserves, became effective on October 15, 2000. Among other things, the new ASOP requires the actuary to use the concept of materiality in a number of important ways. The American Academy of Actuary's Committee on Property and Liability Financial Reporting (COPLFR) asked VFIC to prepare a note that would aid the actuary considering materiality in the context of ASOP No. 36.