By Anthony Cappelletti
Welcome to the December 2020 issue of General Insurance Insights, the SOA’s biannual newsletter for those with an interest in general insurance (aka, P&C or property and casualty insurance). As I write this, the COVID-19 pandemic continues to be an issue for many people all over the world. I hope that all who are reading this stay safe and healthy.
This issue includes several articles of interest to general insurance actuaries. The first article is one that I wrote titled “COVID-19 and Business Interruption Coverage.” It’s a follow-up to my article “COVID-19 and General Insurance” from the June 2020 edition. In this article, I provide an update on the issues regarding claims for business interruption coverage resulting from the pandemic. The second article is “GI Exams Under CBT” by Scott Lennox, FSA, FCCIA, FCAS, and me. This article outlines how the shift to computer-based-testing (CBT) for SOA exams will affect the GI track exams. The third article is “Proposed Changes to the U.S. Qualification Standards.” In this article, Stuart Klugman, FSA, CERA, Ph.D., discusses the Academy’s recent proposed revisions to the U.S. Qualification Standards which included recognition of the SOA’s GI track as a path to being qualified to sign the NAIC P/C Statement of Actuarial Opinion. This was excellent news for the SOA, GI track FSAs and GI track candidates.
Also included in this issue:
- “GI PD Opportunities Update,” an update of professional development (PD) opportunities with significant GI relevant content.
Recently, the Actuarial Standards Board (ASB) of the American Academy of Actuaries approved two exposure drafts of Actuarial Standards of Practice (ASOPs) that apply to GI actuaries. The first is for ASOP No. 38. This ASOP was previously titled “Using Models Outside the Actuary’s Area of Expertise (Property and Casualty)” and only applied to GI actuaries. The revision will rename ASOP No. 38 “Catastrophe Modeling (for All Practice Areas)” and it will apply to all actuaries. The comment deadline for this revision is Jan. 15, 2021. The second is for a new ASOP, “Setting Assumptions,” that will apply to all actuaries. This is the third exposure draft for this ASOP. The comment deadline for this ASOP is April 15, 2021. Be sure to check out these exposure drafts on the ASB website. Both exposure drafts include wordings to better align with ASOP No. 56, “Modeling.”
Over many past issues, I provided updates on the status of NFIP reauthorization. Since 2017, the NFIP has been kept operational through an unprecedented sequence of temporary extensions—some of them lasting only a few weeks. The last reauthorization was for nine months and its expiry date was Sept. 30, 2020. Before it expired, legislation was passed by Congress extending NFIP authorization to Sept. 30, 2021. This extension gives NFIP stakeholders a sense of stability as it will last for 12 months. But it is still only a temporary reauthorization. A longer-term re-authorization that considers reforms to help the program’s stakeholders is required. While major reforms are still in the works, the NFIP is set to introduce a redesigned risk rating system effective Oct. 1, 2021. The new rating system is referred to as Risk Rating 2.0. Those interested in the Risk Rating 2.0 should visit the FEMA website.
Our goals with General Insurance Insights are to keep readers informed on topics of interest to GI actuaries and to develop the GI actuarial community within the SOA. We welcome your feedback and ideas to help us achieve these goals. If you have questions, feedback or ideas regarding General Insurance Insights, feel free to contact me.
I would also like to take this opportunity to inform our readers that we are always looking for volunteers in general insurance at the SOA. Please visit the SOA Volunteer Opportunities Database. The database includes all open volunteer opportunities at the SOA. If you do not see a GI exam volunteer opportunity in the database and are interested, contact me directly. We can always use new volunteers for GI exam item writing and grading. In addition to this, we are also looking for ideas on GI continuing education offerings and authors (or ideas) for articles in upcoming issues of General Insurance Insights. Let me know if you would like to contribute.
Anthony Cappelletti, FSA, FCIA, FCAS, is a staff fellow for the SOA. He can be contacted at email@example.com.