NAIC Expands Reserve Opinion Requisites

The National Association of Insurance Commissioners (NAIC) has made two changes to the requirements for the 1996 loss reserve opinions.

• The actuary must opine on the loss Reserves Over Statement Reserves. The actuary may also comment on the total inclusive of such reserves.
• The disclosure of the amount of the discount included as a reduction to carried reserves is required to be stated separately for tabular and non-tabular discounts.

In addition, in the Instructions to the Annual Statement, the NAIC has changed the term "loss portfolio transfer" to "retroactive reinsurance."

These changes, plus a discussion of loss reserve opinion requirements and suggested wording for dealing with special situations, are found in the 1996 Practice Note, which is scheduled to be distributed to all CAS members in early February. The 1996 Practice Note was prepared by the American Academy of Actuaries' Committee on Property and Liability Financial Reporting.

CAS members may also be interested in the Academy’s Property/ Casualty Loss Reserve Law Manual that compiles, on a state-by-state basis, the laws and regulations that relate to loss reserves. Members can purchase either the full copy or the pages that were recently updated.