COPLFR Updates

Fall 2023 Updates (also valid for Spring 2024)

The changes for Fall 2023 pertain mainly to qualification standards for the appointed actuary. A lot of that information is very detailed and probably wouldn't make a good exam question. Something that's mentioned however in multiple places in the updated COPLFR text is this:

• Additionally, the NAIC SAO Instructions require that the Identification paragraph should include a statement asserting that the Appointed Actuary has provided qualification documentation to the Board of Directors.

To me, that requirement seems like pointless bureaucracy. Presumably management has verified the qualification of the appointed actuary, and the Board of Directors can assume such whether or not they have an official document. Anyway, just be aware of it.

On page 12 of the document (or page 19 of the PDF) there is an Overview of Applicable Qualification Standards. This is already discussed in the wiki content and the changes seem fairly minor. The CE credits now require at least 1 hour of bias topics but there is no explanation of what that entails. I suppose you would find out when it's time to do your CE.

I think that's pretty much all there is. If you think I've left out something important, let me know.

Fall 2022 Updates (also valid for Spring 2023)

The COPLFR source text provides a very nice summary of the changes:

We'll discuss the changes you need to pay attention to below.

Schedule P Reconciliation (Sections 3.7 and 8.5)

Section 3.7: See yellow highlights in main wiki article where Schedule P reconciliation is discussed.

Section 8.5: Same link as for Section 3.7.

COVID-19 Considerations (Section 5.7)

There was a minor update for COVID-19. See the main wiki article near the end of the section Step 6-A: Company-Specific Risk Factors (Relevant Comments).

Company Representations to the Appointed Actuary (Section 3.5.3)

See "Final Comments" at the end of Step 3: Schedule P Reconciliation (Scope). You can also go directly to the wiki page for Letter of Representation.

Fall 2020 Updates (also valid for Spring 2021)

Section 1.6 - Changes from the 2018 practice note

COPLFR has made enhancements to the 2019 practice note based on feedback from users and a thorough review by the committee. These changes include a re-organization of Chapter 5 to more closely align to the Instructions, additional illustrative language examples, fix minor errors, and update external references to be up-to-date. COPLFR also reflected all changes to NAIC SAO and AOS Instructions, considered the updates to AOWG’s Regulatory Guidance document, and reviewed other NAIC changes that may impact the Annual Statement as may be relevant to the work of the Appointed Actuary.

Significant changes to this year’s practice note other than movement of sections related to reorganization of Chapter 5 are highlighted in yellow in the COPLFR source text in section 1.6, but I have also copied them below:

Noteworthy changes to the NAIC SAO Instructions for 2019 include:

• Change in the definition of “Qualified Actuary”
• Introduction of the term “Accepted Actuarial Designation”, which is referenced in the updated definition of Qualified Actuary
  • Note that Exhibit B, Item 3 of the SAO (the Appointed Actuary’s designation) has changed in response to the introduction of the term “Accepted Actuarial Designation”
• Introduction of qualification documentation to be submitted to the Board of the company including a description of how the Appointed Actuary meets the definition of Qualified Actuary and the Appointed Actuary’s responsible experience relevant to the subject of the Actuarial Opinion

The 2019 AOWG Regulatory Guidance provides some background on the changes in the 2019 NAIC SAO Instructions; suggests guidance to assist in creating the qualification documentation as described in the NAIC SAO Instructions; and includes other edits to clarify the intent of changes in the 2018 Instructions that resulted from the added disclosure item for Accident and Health (A&H) Long Duration Contracts.

Section 2 - Identification Section

As noted above, there were changes to the definition of qualified actuary. This is covered in Step 1 of Alice's Gentle Guided Pathway. There are also 2 new supplementary wiki articles within Step 1: Exceptions to Definition of Qualified Actuary and Supplementary Information on Qualifications for Appointed Actuary.

Section 5 - Relevant Comments

The update to chapter was just a reorganization. They moved a few sections around and consolidated many other sections into a single section.

Conclusion

Pay close attention to the changes in Section 2.

Fall 2019 Updates (also valid for Spring 2020)

The COPLFR reading was updated for the 2019.Fall sitting, but there were no significant changes. Spend 5 minutes reading the information below and you'll be good to go.

Section 1: Introduction

(1.6)

Copied directly from the source text:

• ...changes were relatively minor, and intended to provide more clarity through illustrative language, improve readability, and fix minor errors.
• COPLFR also reflected all changes to NAIC SAO and AOS Instructions and considered the updates to AOWG’s Regulatory Guidance document. (Significant changes in this year’s practice note are highlighted in yellow.)

The highlights refer to the COPLFR document (not the wiki.) It was very helpful of the authors to insert these highlights - it makes it easy to scan the document for changes. In any case, the source text goes on to say:

• The 2018 NAIC SAO Instructions include changes regarding Accident & Health (A&H) Long Duration Contracts but otherwise have not had any substantive changes since 2017.

This is great news. There are then 3 more bullet points that outline the specific changes:

• A definition has been introduced for A&H Long Duration Contracts as “A&H contracts in which the contract term is greater than or equal to 13 months and contract reserves are required.”16 We note that this is different from the definition of Property and Casualty (P&C) Long Duration Contracts.
• Exhibit B: Disclosures have changed with the addition of Item 13: Net Reserves for A&H Long Duration Contracts.
• The prior term “Long Duration Contracts” was revised to “Property and Casualty (P&C) Long Duration Contracts”. There was no change in procedures for these types of contracts. COPLFR understands that this was a clarifying change to make clear the distinction between P&C Long Duration Contracts (i.e., those subject to the three tests of SSAP No. 65) and the new term “A&H Long Duration Contracts.”

Conclusion

I scanned the source text for the yellow highlights and it does seem the updates are minor. Basically 99% of the material is unchanged from the prior version. (Remember that since the Statement of Actuarial Opinion is the top-ranked topic, you should be actively using the source text, the examiner's reports, and the wiki as you're learning the material.)