Casualty Actuarial (C) Task Force
October 1, 2007

The Task Force adopted interim conference call minutes and 2008 charges. A change was made to the charges to focus the Task Force’s international efforts on work requested by the International Solvency and Accounting (E) Working Group and on International Actuarial Association papers.

The Regulatory Guidance for 2007 Statements of Actuarial Opinion and Actuarial Opinion Summaries was discussed. The Subgroup will re-draft the documents for a vote at the next conference call. The Actuarial Opinion Subgroup made a presentation regarding regulatory guidance at the Casualty Actuarial Society’s Casualty Loss Reserve Seminar and will make another at the NAIC’s Financial Summit.

Other Subgroups and Working Groups reported the following to the Task Force:

• The Profitability (C) Working Group has reviewed preliminary work for the Profitability Report using 2006 data. The working group is reviewing methodologies.
• The P&C Actuarial Role in Risk Focused Surveillance Subgroup is close to finalization of information on reserving, underwriting/rating, and liquidity risks that can be used to develop training by the Risk Implementation (E) Subgroup.
• The Workers’ Compensation Large Deductible Subgroup asked the American Academy of Actuaries (AAA) Workers’ Compensation Committee for a proposal. Once the AAA responds, the Subgroup will discuss that proposal and any additional surveys received.
• The Extended Loss Subgroup will suspend activity pending review of the results from the new Schedule P interrogatories.

The working group also discussed principles-based reserving activities. There is still some concern that aspects of the project will impact property & casualty (P&C) insurers, especially because accident and health business is sometimes reported on the P&C blank and because issues such as governance is not currently drafted to exclude P&C. Members were also asked to review the Standard Valuation Law to determine if there could be impact on P&C. Task Force members are encouraged to continue to provide support in the process to offer guidance on how principles-based reserving works for P&C and also on how statistical information is collected.

A model law is being drafted by the Statistical Information (C) Task Force regarding closed claim data for medical malpractice. Continued updates on this activity were requested.

The American Academy of Actuaries (AAA) reported on activities at their Committee on Property/Liability Financial Reporting. The AAA is developing risk transfer training and will present some initial training at the NAIC’s Financial Summit. The committee is also developing a first draft of a risk transfer survey that the Task Force will consider on the next call. Expectations are that the survey will be distributed to companies at the beginning of 2008.

The AAA also reported on international work and emphasized the need for actuaries to be involved in these international accounting and solvency changes. The AAA and interested parties said focus on issues such as internal models, risk margin calculations, and country-specific differences would be helpful.

Action Items:

1. Adoption of conference call minutes which included recommendations to the Blanks (E) Working Group and a letter to the Principles-Based Reserving Working Group.