Under the Code of Professional Conduct, actuaries must ensure that their work follows applicable actuarial standards of practice (ASOPs). The Code also requires actuaries to keep current with changes in ASOPs as they are newly issued or revised.
Despite the clarity of this mandate, there may be times when you are unsure which ASOPs apply. This may occur when you are working on a new actuarial assignment or an assignment for which a relevant ASOP has recently been revised. Or, you may be familiar with the ASOPs, but would benefit from a checklist of sorts to assure yourself that you have looked at all of the relevant ASOPs with respect to a given assignment.
The Academy’s Council on Professionalism publishes a handy tool, the Applicability Guidelines that can help practicing actuaries determine which ASOPs might apply to the assignment at hand. Although the Applicability Guidelines are not binding guidance, we encourage you to use them.
When the Actuarial Standards Board issues a new or revised ASOP, the relevant Academy practice council reviews the ASOP and the types of assignments to which it might apply and then determines whether the existing Applicability Guidelines should be updated. The involvement of the Academy’s practice councils means that every practicing actuary who uses the Guidelines leverages the experience and insights of the members of the practice councils, which is of tremendous value.
The Applicability Guidelines are also user-friendly. Organized by practice area, the Applicability Guidelines are published in Excel format, with a tab for each practice area. At the top of each tab is a reminder that three ASOPs apply to every assignment: ASOP No. 1, Introductory Standard of Practice; No. 23, Data Quality; and No. 41, Actuarial Communications. For easy access, a link is provided to these and other relevant ASOPs at the top of each tab. The guidelines list tasks commonly performed by actuaries in each practice area. Next to this list of tasks is a list of the ASOPs that usually apply to each task. So, for example, if you are a health actuary performing a trend analysis, you can go to line 5.7 on the health tab and see that ASOP Nos. 5, 25, 42, and 45 might apply.
You may find it helpful to review all sections of the Applicability Guidelines that might apply when performing particular tasks. For example, life actuaries performing an appraisal of a life company writing health coverages may wish to review the health section as well as the life section.
No. 24, Compliance with the NAIC Life Insurance Illustrations Model Regulation.
The Academy practice councils have been busy revising the Applicability Guidelines to reflect changes to these ASOPs. Other updates have also been made, particularly in the pension and life practice areas.
The updated Applicability Guidelines are available on the Academy website. They are provided at no cost, and you can use them to gain additional confidence that you have correctly identified the applicable ASOPs for a particular assignment. Please take this opportunity to learn about this important tool and to tell other practicing actuaries about it.