Property and Casualty Practice Note, Statements of Actuarial Opinion on P&C Loss Reserves as of December 31, 2006

This practice note was prepared by the Committee on Property and Liability Financial Reporting (COPLFR) of the American Academy of Actuaries (Academy). It is not an Actuarial Standard of Practice. It has not been promulgated by the Actuarial Standards Board, nor is it binding on any actuary. This practice note is intended to assist actuaries by describing practices that COPLFR believes will be commonly employed in issuing statements of actuarial opinion on loss and loss expense reserves in compliance with the Property and Casualty Annual Statement Instructions for 2006 issued by the National Association of Insurance Commissioners (NAIC). Actuaries may also find this guidance useful in preparing statements of actuarial opinion for other audiences or regulators. However, approaches other than the ones described within this practice note may also be in common use. The information contained herein is not binding on any actuary and is not a definitive statement of what constitutes generally accepted practice in this area. All boldface materials preceding each “Discussion” section are NAIC materials, which are reproduced with the permission of the NAIC. Further replication or distribution of NAIC materials without the written consent of the NAIC is strictly prohibited. Actuaries are reminded that Actuarial Standard of Practice (ASOP) No. 36, Statements of Actuarial Opinion Regarding Property/Casualty Loss and Loss Adjustment Expense Reserves, applies to the material covered by this practice note. That Standard of Practice is binding on all actuaries opining on P&C loss reserves. Actuaries are also reminded that the material covered by this practice note is a Prescribed Statement of Actuarial Opinion as contemplated by the Academy’s Qualification Standard for Prescribed Statements of Actuarial Opinion, and the actuary must meet the qualifications, continuing education, and other requirements contained therein. Individual states may have requirements that modify or supplement the NAIC Annual Statement Instructions. NAIC Codification became effective in 2001. Individual states may not have implemented all aspects of the Codification. The actuary may wish to refer to the Academy’s most recent Property/Casualty Loss Reserve Law Manual for guidance on these points.