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ACTUARIAL LEARNING DEFINITIONS QUESTIONS AND VERIFIED ANSWERS|100% CORRECT|GRADE A+
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ACTUARIAL LEARNING DEFINITIONS QUESTIONS AND VERIFIED ANSWERS|100% CORRECT|GRADE A+
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ACTUARIAL LEARNING DEFINITIONSQUESTIONS AND VERIFIED
ANSWERS|100% CORRECT|GRADE A+
accident and health insurance - ANSWER The term "accident and health insurance" means contracts that
incorporate morbidity risk and provide protection against economic loss resulting from accident, sickness
or medical conditions and as may be specified in the Valuation Manual. (Model #820 definition.)
accumulated deficiency - ANSWER The term "accumulated deficiency" means an amount measured as of
the end of a projection year, and it equals the negative of the projected statement value of general
account and separate account assets, as of the end of the projection year. Accumulated deficiencies may
be positive or negative. A positive accumulated deficiency means that there is a cumulative asset
shortfall. A negative accumulated deficiency means that there is a cumulative asset surplus.
Actuarial Standards Board (ASB) - ANSWER The term "Actuarial Standards Board" (ASB) means the board
established by the American Academy of Actuaries (Academy) to develop and promulgate Actuarial
Standards of Practice (ASOPs).
annual statement - ANSWER The term "annual statement" means the statutory financial statements a
company must file using the annual blank with a state insurance commissioner as required under state
insurance law.
anticipated experience assumption - ANSWER The term "anticipated experience assumption" means an
expectation of future experience for a risk factor given available, relevant information pertaining to the
assumption being estimated.
Guidance Note:
A universally accepted definition of relevant information is not to be found in actuarial literature, but
certainly relevant experience is a part of what constitutes relevant information. Actuarial judgment is
required in selecting and applying relevant information. In the case of relevant experience, the actuary is
given guidance in ASOP No. 52, Principle-Based Reserves for Life Products, and ASOP No. 25, Credibility
Procedures, defining relevant experience and discussing the selection of relevant experience.
An appointed actuary - ANSWER · An appointed actuary means a qualified actuary who:
o Is appointed by the board of directors, or its equivalent, or by a committee of the board, by Dec. 31 of
the calendar year for which the opinion is rendered.
, o Is a member of the Academy.
o Is familiar with the valuation requirements applicable to life and health insurance.
o Has not been found by the insurance commissioner (or if so found has subsequently been reinstated as
a qualified actuary) following appropriate notice and hearing to have:
- Violated any provision of, or any obligation imposed by, the insurance law or other law in the course of
his or her dealings as a qualified actuary.
- Been found guilty of fraudulent or dishonest practices.
- Demonstrated incompetency, lack of cooperation or untrustworthiness to act as a qualified actuary.
- Submitted to the insurance commissioner during the past five years, pursuant to these AOM
requirements, an actuarial opinion or memorandum that the insurance commissioner rejected because
it did not meet the provisions of this regulation, including standards set by the ASB.
- Resigned or been removed as an actuary within the past five years as a result of acts or omissions
indicated in any adverse report on examination or as a result of failure to adhere to generally acceptable
actuarial standards.
Has not failed to notify the insurance commissioner of any action taken by any insurance commissioner
of any other state similar to that under the paragraph above.
"asset adequacy analysis" - ANSWER The term "asset adequacy analysis" means an analysis of the
adequacy of reserves and other liabilities being tested, in light of the assets supporting such reserves
and other liabilities, as specified in the actuarial opinion.
"asset-associated derivative" - ANSWER The term "asset-associated derivative" means a derivative
program whose derivative instrument cash flows are combined with asset cash flows in performing the
reserve calculations.
cash flow - ANSWER The term "cash flow" means any receipt, disbursement, or transfer of cash or asset
equivalents.
cash-flow model - ANSWER The term "cash-flow model" means a model designed to simulate asset and
liability cash flows.
cash surrender value - ANSWER The term "cash surrender value" means, for purposes of these
requirements, the amount available to the contract holder upon surrender of the contract, prior to any
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