Definition
An Actuarial Report is a formal document utilized in the insurance industry, specifically prepared by actuaries. For Property and Casualty (P&C) Insurance, this report is an essential tool used to convey the actuary’s conclusions, recommendations, valuation methods, and findings to significant entities such as state regulatory authorities and the Board of Directors. It plays a pivotal role in ensuring these stakeholders understand the significance of the actuary’s opinions housed in the report and ensuring the analyses executed are documented comprehensively.
In the Life and Health Insurance sector, this document is referred to as an Actuarial Memorandum.
Purpose
The prime purposes of an Actuarial Report include:
- Convey Professional Conclusions and Recommendations: The report presents the actuary’s expert conclusions about various aspects like liabilities, pricing, and business strategy evaluations. It serves as a decision-making guide for high-level decisions.
- Record and Demonstrate Analytical Procedures: These detailed documents record the procedures and methods used during the actuarial analysis to cultivate transparency and facilitate future reviews or audits.
- Regulatory Compliance and Documentation: In the insurance field, regulatory bodies often demand comprehensive documentation of financial conditions and risk assessments. The Actuarial Report acts as a formal compliance document necessary for these purposes.
Related Regulations and Guidance
For more thorough understanding and supplemental readings on the functionalities and requirements embedded within Actuarial Reports, consider exploring the following:
U.S. National Association of Insurance Commissioners (NAIC) Model Laws and Regulations: Actuaries are often guided by specific standards and models suggested by the NAIC, helping in framing these reports according to standardized recognized norms.
Actuarial Standards Board (ASB): They issue actuarial standards of practice that actuaries must adhere to when compiling reports to safeguard the quality and consistency of reports delivered across the industry.
In conclusion, owing to their in-depth exploration of risk, liabilities, and recommendations, Actuarial Reports are foundational documents ensuring structured, transparent, and regulated reportage in the realm of insurance.
