Difference between revisions of "Letter of Representation"
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| + | || This addition for '''2022-Fall''' doesn't seem very important but it might be wise to at least know what a '''Letter of Representation''' is. | ||
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From the source text, section 3.5.3: | From the source text, section 3.5.3: | ||
| − | : ''Although not explicitly referenced, nor required, in the NAIC SAO instructions or AOWG Regulatory Guidance, non-employee Appointed Actuaries often request a '''letter of representation''' from company management.'' | + | : ''Although not explicitly referenced, nor required, in the NAIC SAO instructions or AOWG Regulatory Guidance, <u>non-employee Appointed Actuaries</u> often request a '''letter of representation''' from company management.'' |
Items cited in this could include: | Items cited in this could include: | ||
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* <u>changes</u> in reserving methodology | * <u>changes</u> in reserving methodology | ||
| − | The text lists a few other items but I don't think they are important. You look them up if you want but the <u>main idea</u> is that the '''letter of representation''' is a document from company management assuring the | + | The text lists a few other items but I don't think they are important. You look them up if you want but the <u>main idea</u> is that the '''letter of representation''' is a document from company management assuring the <u>non-employee Appointed Actuary</u> that they have all the relevant information on which to form an opinion. |
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'''Riddle''': Why is this document called a "letter of representation". | '''Riddle''': Why is this document called a "letter of representation". | ||
| − | '''Answer''': I | + | '''Answer''': I'm not sure. <span style="font-size: 24px;">😐</span> Maybe because the company is representing themselves as having provided all the pertinent information to the <u>non-employee Appointed Actuary</u>? |
Latest revision as of 22:15, 11 June 2022
| This addition for 2022-Fall doesn't seem very important but it might be wise to at least know what a Letter of Representation is. |
From the source text, section 3.5.3:
- Although not explicitly referenced, nor required, in the NAIC SAO instructions or AOWG Regulatory Guidance, non-employee Appointed Actuaries often request a letter of representation from company management.
Items cited in this could include:
- company-provided complete and accurate data
- information on subsequent events
- basis of carried reserves (net/gross of reinsurance, salvage & subrogation, risk margin,...)
- changes in reserving methodology
The text lists a few other items but I don't think they are important. You look them up if you want but the main idea is that the letter of representation is a document from company management assuring the non-employee Appointed Actuary that they have all the relevant information on which to form an opinion.
Riddle: Why is this document called a "letter of representation".
Answer: I'm not sure. 😐 Maybe because the company is representing themselves as having provided all the pertinent information to the non-employee Appointed Actuary?
