New Kids on the BlockIn this issue we welcome 749 new members to the Academy

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Editor’s Note: This is the first in a series of occasional articles that will profile actuaries working in the public sector.

DurIng hIs 38 yeArs with the Social Security Administration, Chief Actuary Stephen Goss has worked under eight presidents and with members

of Congress from both sides of the aisle. At times, he has walked out of a meeting with Democrats and directly into a meeting with Republicans. And he has no trouble doing it.

“We function with no preference for one proposal over any other. I’ve been doing this for so long, I don’t think I’m capable of personal preference on these issues,” Goss explained in a recent interview with the Update. “Actuaries —especially government actuaries—are trained to be neutral. At the Office of the Chief Actuary, our client base is essentially anyone who works for the government. We are happy to work with any member of Congress to develop a proposal.”

His only agenda, Goss said, is to present lawmakers with a range of possibilities from which they can choose. “Since 1973, I’ve always asked the same questions,” Goss said. “What are your goals? What do you want to change?”

Goss said he enjoys working with lawmakers and their staff, who he says are smart, creative people who are willing to listen to many options. “We provide an unbi-ased analysis of their proposal, and then score the results against their goals. The biggest service we provide is to explain the results in an as neutral a manner as possible.”

Goss is passionate about his work, but becoming an actu-ary wasn’t his original plan. When he started college at the University of Pennsylvania in 1967, his goal was first to study philosophy and then physical sciences. Goss earned a B.S. in mathematics and economics in 1971, and a master’s degree in mathematics from the University of Virginia in 1973. The first time he heard the word “actuary” was when he was

2Setting SightsBoard approves new vision and mission statements

Professional ProtocolVolunteers must acknowledge Academy COI policy

RBC Formulashealth, life, and property/casualty committees report to nAIC

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A Conversation with Stephen Goss

The Range of Possibilities

See Goss, PAge 10

The ACADemy OuTlIneD, from an actuarial per-spective, a domestic policy agenda to improve Ameri-cans’ financial security and restore the nation’s fiscal

health in a news release issued on Jan. 24, the day before President Obama delivered his State of the Union address.

“We understand and are concerned about the financial risks and challenges facing Americans,” said Academy Presi-dent mary frances miller. “Americans are still deeply affected by the consequences of the financial-sector crisis. Unemploy-ment remains high, workers’ retirement fund balances are down. At the same time, the fiscal challenges facing govern-ment at the federal, state, and local levels are being pushed to the forefront. Americans are looking to their elected officials to construct bipartisan solutions to these challenges.”

The Academy’s news release said that restoring the

financial viability of both Social Security and medicare, safeguarding against longevity risk and promoting life-time income, reducing long-term medical care spending growth, and incorporating sound risk management prin-ciples in financial regulatory reform should be foremost on this year’s legislative agenda. The Academy also empha-sized the need to keep the goals of health care reform at the center of efforts to implement the new health law and any other potential congressional action.

following distribution of the news release, Academy Senior Health fellow Cori Uccello discussed the Academy’s policy outline with “metro Watch” host Gloria minott (WPfW 89.3 fm in Washington) on Jan. 25. The news release also was covered by Watchdog.com, National Underwriter, the Bureau of National Affairs, and BankRate.com.

Actuarial State of the Union

Academy NeWS Briefs

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c a l e n d a r

FeBRUARy 2 Actuarial Opinions and ASOP Nos. 36 and 43, webinar (Academy, CAS)

7–8 National Health Policy Conference, Washington (NAIC)

MARCh 4–6 NCOIL spring meeting, Washington

23 Professionalism webinar: ASOP No. 41 (Academy, ASPPA, CAS, CCA, SOA)

26–29 NAIC spring meeting, Austin, Texas

27–30 enrolled Actuaries Meeting, Washington

APRil 7–10 IAA meeting, Sydney, Australia

27 Council on Professionalism meeting, Washington

28 executive Committee meeting, Washington

MAy 4 CUSP meeting, Atlanta

5–6 NAAC meeting, Atlanta

25 Board of Directors meeting, Washington

JUNe29 Professionalism webinar: The Profession’s Responsibility to the Public (Academy, ASPPA, CAS, CCA, SOA)

JUly 14–17 NCOIL summer meeting, Newport, R.I.

AUgUST 11 Academy executive Committee meeting, Washington

11–13 46th Actuarial Research Conference, Storrs, Conn. (SOA)

29-sept. 1 NAIC summer meeting, Philadelphia

SePTeMBeR15 CUSP Meeting, TBD

16–17 NAAC Meeting, Chihuahua, Mexico New task Forces FormedThe Academy Board of Direc-tors added an extra day to its January meeting to review the Governance Task force’s Octo-ber report. After considering all of the issues raised and recom-mendations made by the task

force, the board voted to keep the process moving forward by creating three new task forces:➥   A task force to explore a

proposal to facilitate mem-ber participation in the

➜ CONTINUeD ON paGe 3

Links to documents underlined in blue are included in the online ver-

sion of this issue at www.actuary.org/update/index.asp

To continue receiving the Update and other Academy

publications on time, remember to make sure the Academy has your

correct contact information. Academy members can

update their member profile at the member log-in page on the Academy website.

The ACAdeMy’S BoARd oF diReCToRS approved new Academy vision and mission state-

ments at its January meeting. The revised state-ments were drafted by the Strategic Planning Committee, which worked through much of 2010 on a series of vital changes to the statements.

Before submitting a final proposal to the board, the committee gave the new Academy Advisors panel an opportunity to review, evaluate, and com-ment on the drafts. more than two-thirds of the advisers completed a 26-question survey, which

included several opportunities to provide open-ended comments. While members of the Academy Advisors panel overwhelmingly approved the con-cepts in the revised vision statement and each component of the revised mission statement, panel members also provided more than 200 open-ended comments. The committee reviewed all of those responses and, as a result of some of the sug-gestions and critiques, significantly tightened the focus of the vision statement in particular.

A Vision for the Future

www.actuary.org actuaria l upDATe FebrUary 2011

The FeBRUARy 2011 ediTioN of the Actu-arial Standards Board’s Boxscore is now available. The Boxscore discusses the issuance of two final standards, Actuarial Standards of Practice (ASOP) No. 41, Actuarial Communications, and No. 36, Statements of Actuarial Opinion Regarding Prop-erty/Casualty Loss and Loss Adjustment Expense Reserves—both of which go into effect on may 1. It also provides information on approved expo-sure drafts revising ASOP No. 20, Discounting of Property/Casualty Unpaid Claim Estimates, and ASOP No. 27, Selection of Economic Assumptions for Measuring Pension Obligations, as well as a discussion draft of ASOP No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions. Visit the AsB website for more information about all the board’s activities.

Boxscore published revised asop No. 41 (actuarial communications) webinar

Save the date: March 23

The recent release of the final revision of AsOp no. 41, Actuarial Communications, brings impor-

tant changes to the guidance on how actuar-ies communicate their work to intended users.

Because of the guidance’s broad application, these revisions will affect actuaries in every practice

area. It is imperative for actuaries to understand the new guidance and the changes that will go

into effect on May 1. Save the date—March 23—to learn more about ASOP No. 41 and its guidance on

a number of important issues, including:

➥   The revised requirements governing actuarial communications;

➥   What constitutes an actuarial report;

➥   required disclosures; and

➥   Deviation from AsOp guidance.

Details about the march 23 webinar will be available on the Academy website soon.

march 1 deadline for ea renewalsenrolled actuaries applying to renew in the 2011-2013 enrollment cycle must submit their renewal appli-cation by march 1. The application (form 5434-A) can be downloaded from the Internal Revenue Service (IRS) website. for more information, go to the renewal of enrollment page on the IRS website. If you are unable to download the form, contact the Joint Board for the enrollment of Actuaries at nhqjbea@irs.gov or 202-622-8225 and one will be faxed or e-mailed to you.

www.actuary.org actuaria l upDATe FebrUary 2011

election of regular directors of the board;

➥   A task force to evaluate the pros and cons of a proposal for a smaller board struc-ture versus the report’s recommendation for main-taining the current size and structure; and

➥   A task force to explore creation of a formal leader-ship development program within the Academy.

The first two groups are ex-pected to report at a special conference call of the board scheduled for mid-march. The leadership development group is expected to conduct research and formulate a proposal for the board. This group’s work may take several months to complete.

IN the NewsAcademy Senior life fel-low Nancy Bennett discussed emerging risk management trends in the life insurance mar-ket in a Dec. 1 Insurance Net-working News article. Bennett said that although life insurers fared better than investment banks during the crisis, they cannot rest on their laurels. She said that life insurers today have much more exposure to capital markets than they did 30 years ago and need to better understand the relationship

between their assets and the li-abilities they present.

The Academy was the source of longevity statistics featured in a Dec. 7 USA Today cover story, which explored the increasing likelihood that baby boomers will be working during their senior years. A 65-year-old male in 1945 would live about 13 more years, but in 2011, an average 65-year-old male can expect to live an additional 18 years, according to the Acade-my. The article was republished by a dozen other publications, including the Indianapolis Star and the Asbury Park Press, two of the nation’s top 100 newspa-pers by circulation.

The Academy’s Public Plans Practices Task force report was cited and Pension Practice Council Vice President ethan

Kra was quoted in a Dec. 14 Re-tirement Income Journal report. Kra helped explain the newly introduced Public employee Pension Transparency Act. Kra said the bill addresses disclo-sure and financial reporting, but it does not discuss funding or required investment risk.

An Academy-issued news re-

lease that coincided with intro-duction of the Public employee Pension Transparency Act last December was the subject of a

PlanSponsor article on Dec. 16. As reported by PlanSponsor, “While not taking a position on a recent bill requiring additional disclosures from public pension funds, the American Academy of Actuaries used the bill’s in-troduction to emphasize ‘the importance of meaningful and consistent disclosures’ by public plans.” Quotes in the release by both Academy President Mary

Frances Miller and Academy President-elect david Sandberg were included in the article.

A Dec. 17 Watchdog.com article also discussed the news release and included a quote from miller. “The funded status of state and local government-sponsored pension plans is a major concern of the approxi-mately 20 million workers, re-tirees, and family members who are the beneficiaries of those plans, as well as the current and future taxpayers and recipients of public services who share in the financial obligation to provide those benefits. Public confidence in these retirement systems starts with the avail-ability of consistently disclosed financial information on plan

assets and obligations and sys-tem risks. And as government entities pursue comprehensive solutions to their financial chal-lenges, they need clear and rel-evant information that will help them manage the risks associ-ated with their pension plans,” she said in the release.

Academy Health Practice Council Vice President Tom

Wildsmith was quoted in the January 2011 issue of Reason Magazine. Wildsmith discussed the role of genetic information in the health insurance market. He said that even before the Ge-netic Information Nondiscrimi-nation Act was signed into law in 2008, insurers were not using genetic information. Wildsmith said that it was irrelevant in the group market, and that in the individual health insurance market, insurers are more con-cerned about near-term costs, while genetic information tends to provide information about the long term.

To find out about other actu-aries in the news and for exter-nal links, visit the Academy’s newsroom.

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Volunteers Needed for  New Reinsurance Subcommittee

Life, property/casualty, and health members are needed for a new subcom-

mittee that has been created to develop Academy work on reinsurance-

related public policy issues that affect multiple areas of actuarial practice,

domestically and abroad. The subcommittee will discuss research and pub-

lic policy initiatives relating to reinsurance. One of the key functions of the

subcommittee, which will be housed under the Solvency Committee of the

Risk Management and Financial Reporting Council, will be to monitor and

interact with the reinsurance subcommittees of the International Actuarial

Association and the International Association of Insurance Supervisors.

Anyone interested in joining the Reinsurance Subcommittee should

contact Senior Risk Management and Financial Reporting Policy Analyst

Tina Getachew at Getachew@actuary.org.

2011 EA MEEtiNg

register now for the 36th annual enrolled Actuar-ies meeting, sponsored by the Academy and the Conference of Consulting Actuaries. The meeting will feature more than 50 different sessions cover-ing a wide range of topics and issues relevant to enrolled actuaries and other pension profession-als. Additional continuing education opportunities also are available before and after the meeting, including the professional standards seminar and the 2011 pension symposium. For more informa-tion and to register for the meeting and additional seminars, go to www.enrolledactuaries.org.

March 28–30Marriott Wardman Park Hotel, Washington

www.actuary.org actuaria l upDATe FebrUary 2011 4

Medicaid Rate Setting

health News

The meDICAID WOrk grOup, in a Jan. 14 letter to the Centers for medicare and medicaid Services (CmS), responded to the CmS’ request for Academy assistance in

making improvements to the medicaid rate-setting checklist. The medicaid Work Group answered the 14 questions that the CmS posed to the Academy in a Nov. 3, 2010, letter.

In its response, the work group provided guidance on ways to improve the current state rate verification process—a process that was criticized in a recent Government Accountability Office (GAO) report. The GAO report also noted that the Academy’s 2005 practice note on the actuarial certification of rates for the medicaid managed care pro-gram was nonbinding and suggested that the practice note be turned into an Actuarial Standard of Practice (ASOP). In the letter to the CmS, the work group said that it will be updating the 2005 practice note and would refer the question of developing it into an ASOP to the Actuarial Standards Board. Other issues addressed in the letter included:➥   limitations that are inherent in the rate review process;➥   The appropriateness of retroactive rate increases;➥   Changes to pharmacy rebate adjustments as a result of the

Affordable Care Act; and➥   Risk corridors in the medicaid program.

The work group will continue to work with the CmS to update the checklist and on other important issues pertaining to the medicaid program.

The heAlTh prACTICe FInAnCIAl repOrTIng COmmITTee in January released a practice note entitled Revised Actuarial Statement of Opinion Instructions for the

National Association of Insurance Commissioners (NAIC) Health Annual Statement Effective Dec. 31, 2010. These instructions affect all health actuaries who need to file a statement of opinion. major changes to the instructions include:➥   The appointment by a company’s board of directors of a quali-

fied health actuary;➥   A process to request exemptions from having to file an actuarial

opinion;➥   The use of a checkbox section to indicate the type of opinion

rendered (qualified, unqualified, adverse, or inconclusive);➥   expansion of the scope of the actuarial opinion to include spe-

cific actuarial items presented as assets in the annual statement;➥   The definition of prescribed language with any modifications or

deviations noted within a checkbox section;➥   The requirement to reconcile underlying claim lag data to

Part 2B of the Underwriting and Investment exhibit; and➥   The inclusion of a supporting actuarial memorandum.

The practice note also includes a sample of the actuarial opinion as well as a list of ASOPs that apply.

Actuarial opinion Practice Note Released

The ACADemy AnD The CAsuAlTy ACTuArIAl sOCIeTy jointly sponsored a webinar on feb. 2 about State-ments of Actuarial Opinion (SAO) and Actuarial Standards of

Practice (ASOP) No. 36, Statements of Actuarial Opinion Regarding Property/Casualty Loss and Loss Adjustment Expense Reserves, and ASOP No. 43, Property/Casualty Unpaid Claim Estimates.

Aimed at actuaries who prepare or sign SAOs on property/casualty loss reserves, the webinar focused on standards appli-cable in drafting loss reserve opinions. Presenter lisa Slotznick, a managing director with PricewaterhouseCoopers llP in Atlanta, described the applicability of ASOP No. 43 in documenting unpaid claim (loss and expense) estimates in loss reserve opinions.

Slotznick reviewed the purpose and the scope of the unpaid claim estimate and identified a variety of issues to be considered when working with unpaid claim estimates, including coverage, fre-quency and severity characteristics, and underwriting and pricing practices. Slotznick described the unpaid claim estimate analysis set forth in ASOP No. 43 and identified mandatory disclosures required by ASOP No. 43.

moving on to ASOP No. 36, Slotznick examined its main compo-nents and described issues that were addressed in recent exposure drafts of a proposed revision. Because a final version has not been issued, the march 2000 revision remains in use and will be appli-cable to 2010 opinions. The webinar included several case studies pertaining to ASOP No. 36 and ASOP No. 43 and offered sample language for dealing with common situations.

Slotznick is PricewaterhouseCoopers’ lead resource on statements of actuarial opinion and actuarial professional standards and is a sub-ject-matter expert on many financial reporting issues. She also serves on the Committee on Property and liability financial Reporting.

Casualty News

Actuarial opinions and ASoP Nos. 36 and 43

scholarshIps avaIlableThe Actuarial Foundation is now accepting applications for a num-ber of scholarships. If you know someone who qualifies for the John Culver Wooddy scholarship, Actuary of Tomorrow— stuart A. robertson memorial scholarship, Actuarial Diversity scholarship, or Caribbean Actuarial scholarship, you can find more information and an application on the Foundation’s website.

www.actuary.org actuaria l upDATe FebrUary 2011 5

NeW Academy MemberslAST yeAR, 749 new members joined the Academy. They join the other actuaries from

all practice areas who, by becoming Academy members, demonstrate a commitment to upholding high professional standards and an interest in keeping up with the issues and

events that shape the profession. As of Dec. 31, 2010, the Academy has 17,078 members.

Ankit AgarwalMonika AggarwalChristopher AllardKyle D. AllenNicholas M. AllenScott M. AllenJoshua B. AllmenMichael Joseph AndersonSteven T. AndersonScott N. ApplequistMaria Patricia M. ArellanoDonald C. ArmsteadYuri AronovElizabeth A. ArsenaultSatya Mitra AryaDylan AscoleseKalpesh H. AsherDaryl S. AtkinsonDodzi AttimuHans AveryThomas Glenn AyersDede Amadou M. BaMaria Eliza T. BagleyCalvin Lloyd BakerZachary A. BallwegRuqiao C. BaoMaria A. BaranWilliam H. BarnardRobert BaronLauren BarozieAaron T. BaslerMichael BearsAaron BeaudoinMaria J. BeckerMariah Marie BeckerJennifer L. BeersJeremy BehKelly A. BellittiErin P. BellottGeorge M. BelokasMichael P. BentzMichael Alan BergersonThomas BergmanGerard B. BerroyaAngela M. BerryBrian Jeffrey BiggsBrent Jon BishDiane L. BlessingerMark A. BlessingerMarcy BloodgoodRobert Andrew BloughBradley BobanLora BockMatthew L. BondJennifer M. BorregardJohn R. BowerColin BracisEdward Bradford

Menachem Nachum Yosef BraunJeffrey BridgeElizabeth K. BrillAlma R. BroadbentGabrielle H. BrochardShannon L. BrownTalmage C. BrownStephen BruceJennifer M. BrushaberDavid BurackScott G. BurkeAlan BurnsColleen M. BurroughsBrandon BussRita M. BustamanteGrace D. CabadingCuiliu CaiStephanie CalandroJonathan CampMathew CappsWilliam R. CarboneVincent CarpenterDaniel J. CarterEric CathelynLing CenYiming ChaiTak Wai ChanAshley ChangKaren Kam On ChangItayi Walter CharakupaSom ChatterjeeAlicia ChenAngela Tzeyin ChenJi ChenKwan-Ji Jeannie ChenMingqiong ChenShu Na ChenSisi ChenSiying ChenXiang ChenYu ChenAndrew M. ChengBenjamin ChengXiangyu ChengXiao Dun ChiMei Lin Lily ChongTristan ChristIsaac ChristensenShelly ChuSoyoung ChungMelanie Christine ClarkTracy M. ClarkJason A. ClarksonT.J. ClinchJacqueline CollinsKijana CollinsSara J. Compas

Joseph Anthony ConigliaroJoseph ConleyTimothy D. ConradChristina ContentoGabriel T. CoonCynthia CooperPhillip C. CooperColleen A. CornellPatricia CoslettKindanna A. CoulibalyJoseph CoxJonathan T. CravenNicholas F. CretenLi CuiXiaoye CuiYijing CuiKevin M. CulpChristopher M. CunliffeJia DaiRui DaiMary E. DalyJesse Andrew DareDaniel Raymond DavidsonJudy DavidsonKaren R. DaviesAndrew M. DavisAnita Ann DavisCraig C. DavisKwame DavisZachary Miller DavisRichard DayTimothy S. DayArthur Craig DeAlmeidaAdam J. DeeJenna DeenikDonald Arthur DeGroatDenise M. DeichmannCameron DeiterMonica DicesareCindy Marie DickasonElizabeth DietrichLillian L. DittrickDiep DoHua DongMei DongMichael Alan DonnellyWha-Ning DooJared J. DoomDavid M. DoranKimberly M. DoraniDimple DoshiEdmund D. DouglasJonathan T. DouglasChristine A. DoyleLucy DrozdKatherine E. DuketJack R. DuncanRyan D. Dunkel

Mary Ann DunleavyDerek D. DunnaganMichael DutcherPriyadharchini DwarakanathDarci Rae EarhartJered EasleyMichael Kieth EdisonAdam EdmisonDavid T. EhrAdam EiflerTroy EisenhourLisa Marie EnglerChristopher EnlundMichael EpsteinMichael D. ErsevimHector M. EscobarAl Housseine EssahebDerek W. EylerDavid C. FairchildXiaohan FangBryce J. FawcettMing FeiWenan FeiAdam FeitJoshua D. FeldmanChun-Jen FengYi FengScott FernandesAlison FielMark J. FlorianEllen L. FogartyDemetrios FokasRyan T. FordJared FormanJonathan P. ForsterMichael S. FoulkeJohn C. FowlerTak FrazitaWilliam Joseph FreeseEric B. FrenchErika B. FritjofsonJing Zhang FritzLuyang FuMatthew Forrest GabrielNicholas David GabrieleMarie-Andree GagneLouis GagnonDuane J. GajewskiWei GaoScott E. GavinEric GeisslerNicholas J. GemmelAdam Michael GerdesJessica Dawn GibbsDaniel J. GieskeCarl GilletteTrintin Chad Glenn

See New members, PAge 6

www.actuary.org actuaria l upDATe FebrUary 2011 6

➜ CONTINUeD fROM paGe 5

Marc GlickmanMichael S. GoldmanTim GoodsonSteven J. GracyalnyJohn A. GramelspacherLoic Grandchamp-DesrauxNicole L. GreeneJeffrey Neale GreenoJustin F.J. GreindlJean-Daniel GrenierPatrick GrigsbyKevin A. GroomBrian James GroskopfJoshua S. GruninXuan GuBiljana Risteska GuchereauAlykhan A. GulamaliYujia GuoEvan HagenaarsNeil A. HaginJennifer A. HaidAaron J. HalburIsaac C. HallDavid HandschkeJustin HansonKeli HaravitchDavid W. HardinKara Knox HardinThomas HarrisTyler Peter HarsheyDavid S. HarvilleChun HeQing HeMichael P. HealyMatthew K. HeaphyJoseph HellmanAnn Marie HelmannJared A. HelmsRachel C. HemphillDoyle Lynn HendersonMichael A. HenkBradley W. HenryCaleb James HerodGregory Joseph HerrleNicholas HigginsAshish R. HingrajiaMonica HirningAdam B. HirschKrista M. HoglundDavid B. HollandMarla HoodAlexander HookwayMark J. HortonElizabeth J. HoverMingyan HuQi HuangYa-Ying HuangYifei HuangKatherine HuckabayJeffrey Robert HuddlestonMichelle HumberdJoshua HurleyMohammad Abu Turab HussainPatrick T. HylandMichelle L. Iarkowski

Molly C. IngoldsbyLazar IveticJoseph D. JacksonLinda JacobDaniel JaegerUbaid JanFeng JiYa JiaJun JiangYukan JiangLitha John-RosePeter JohnstonDaniel Joseph KabalaPeter KaczmarekJackie A. KaczorowskiJames S. KangGnana Kumar KanisanNara KannGregory Michael KantorSusan KariukiEric KarpewiczMiles R. KaschalkShannon KatzmayrJennifer KayeMark B. KayeCharles KearnsKara KemsleySteven KendrickAnna KhapmanMehboob KhojaAmy A. KimHyun Soo (Christian) KimLeo KimYang Hyun KimMeagan L. KinsellaJeffrey G. KinseyMyles KitchenChris KnauerMoshe KofmanShyam Prasad KolliDea KondiTek Hung KongEbo KorantengMariana KotzevAnastassia KoukinovaDeborah Ann KramerJohn A. KrauklisEmily Judith KrebsRachel KrefftPaul Michael KretschmarJie KuangEmilee KuhnThomas KuklaFeriz KurtaljevicTsun Yin Joseph KwokMatthew T. LaitnerEric Junman LamMegan LancioniJames M. LandonDavid R. LangDerek M. LanoueBrett Arthur LarsonJustin LarsonRichard A. LassowChristopher Randal Layton

Gary S. LeeIsaac LeeNancy Teague LeePing Hsin LeeSong LeeSu Meng LeeCourtney LehmanZhenzhou LeiAlexandre LemieuxJessica LenhardKathleen M. LenziniLing Ling LeohTyler M. LesterKhen LeukGary LevenbachLuba A. LevineCourt LevyTheresa Marie LewisHongmei LiJie LiJing LiJunyu Cathy LiQian LiRuohan Rachel LiYali LiYanqing LiMarybeth L. LiangJia LiaoRachel LiebermanJennifer LiererSayi Z. LiggonahAndrew LinJason T. LinSteven C. LinLauren LindRyan LinkDaniel Alan LintonTony Randall LittererLanlan LiuXiaoe LiuYajing LiuYunhsia Beatrice LiuNoah A. LlandaJoshua LondonTony LuJenna D. LuftBingying LuoJia LuoKeyang LuoBenjamin James LynchTracy LynchXiaoyan MaBrian Thomas MackShaun MackenzieBrian MackintoshKathryn (Katy) J. MacMannHarsha MaddipatiPeter A. MagliaroAlfred E. MagnusJessica MailandMichael MallerneeWerlindo N. MangrobangSara J. ManzelJanine R. ManziYurong Mao

Laura MarinGregory Vincent MartainChristopher B. MartinLiana MartuccioKrystal A. Mathewson RossMikenzie S. MattesonAndrew W. MaxfieldMatthew MayIsaac MaycotteJeffrey A. McClureAllison E. McCoyKyle A. McDermottJaira McJiltonEdward K. McKelveyPeter McNamaraMea T. MeaLandon MeeceAshley E. MehrerZachariah Joseph MeierLindsay Keller MeisingerElisabeth MercerPaul E. MetzgerJustin T. MilamJoseph A. MiliciaCoralie MilliganSteven MinturnAlea MohammedBradley W. MolitorJustin Miles MorganCourtney M. MorinLindsey MormonRussell MortensenBridget A. MoserWilliam H. MosesDaniel Everett MossEwelina MroczekRyan MuellerRajesh MunjuluriJay MusselmanBrett MyersEaster NamkungLashana NarayanAnthony NardisHeather D. NathanKagabo NgiruwonsangaKhiem Dinh NgoMinh-Huyen NguyenLee NicholsonBeth A. NielsenDaniel Curtis NielsenJon NilsonDouglas H. NistetterAmanda NommayAlison P. NorthupWilliam Dean NussbaumThomas Denis O’HaraBrian O’NeillElodie N. OlsenCarlos OrozcoJohn Edward OvertonGrant OwensJohn P. OwensNathan Vea OwensDaniel E. Paffumi

See New members, PAge 7

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www.actuary.org actuaria l upDATe FebrUary 2011 7

Michael PallottaYvonne PalmHaiyan PanSeong Weon ParkStella ParkScott M. ParkerJeffrey Alan PasqualucciGlen PatashnickAakash PatelAnupam PatelDhaval PatelNarani PathmanapanTimothy Jason PatotaLela K. PatrikTodor P. PenevYing PengJoe PetersonPetya PetrovaSarah V. PetwaySteven PhillipsFrancois PieterseAshley S. PistoleNicholas PoelsBrian Dale PoppeAaron Zachery PotackiXinguo QianXiaobo QinPeter QuackenbushJaishan RajendraAmal RajwaniJoseph David RakstadDustin RalphSteven RancourtMichael Wayne RaschkeDean A. RatzlaffRajiv RebelloDaniel ReesRonald Scott ReesJohn Thomas ReidMegan Carrisa ReidAshley Arlene RellerStella Y. RenJessica RenfrewDaniel J. RhodesAdam Lee RichCarrie RichardsPaul RichardsThomas J. RichardsArlene Marie RichardsonJoseph Allen RisnerCheryl RobertsJosephine RobinsonPeter Kingsley RobsonMarc A. RochonKathryn M. RokoszKristi Mara RoncelliDean RootenbergChristopher M. RuffMatthew R. RustigeJi-Hye RyuSamir SaadMurad SadruddinWilliam SampleNilabh SanatElizabeth A. Sanders

Marc SantilloNick SarnesoSwati ScanlonJeffrey Peter SchindlerBret D. SchoenefeldMarc SchoonoverDaniel SchwankeDerek A. ScottEllen ScovottiRachel SealeJason SearsPaul SepeDan ShachakPoojan J. ShahRoshni Ashwin Kumar ShahIgor ShamshteinAlexander ShapiroMatthew SharpKenneth B. ShepherdAparna ShettyMichiru ShibataMichael E. ShoupGabriel SilvasiLindsay SitekNicholas R. SkeenJustin SlaughterAllison R. SloanJeffrey SlomskiTaralyn SlusarskiIan SmithIan M. SmithMichael Lee SmithWilliam Joel SmithKevin R. SochaMatthew SolbergNadine SolntsevaMichael SolomonRon SolumJustin Adam SomersSoon Kyu Joseph SonAshish SondhiCarol M. SorensonConstance SouthernBrian E. SpeightRobert SpencerEloise Page SpetkoBethany SpreemanKevin D. StaplesJonathan David StaronJames K. SteinhiserJon StengerJoseph J. StiermanMichael D. StrausScott StriegelKristin SturmHeidi SullivanAdam Li Chun SunNaiwei SunShweta SundararajanJaakob T. SundbergLaura Lucy SutterChristopher T. SwanTimothy Delmar SweetserBrad M. TabisAngela Tabor

Adrianne Marie TalbertCarol S. TashiroCaitlin E. TatarzynJason TaylorSamantha TaylorBradley Alan TeachDan O. TevetChristian A. ThielmanCameron Ross ThomasRyan B. ThomasAudrey L. ThompsonThomas J. ThornburghJamison ThorsonLu TianMatthew TickerAndrew A. TignanelliErik James TillettSandra ToNicholas ToombsEmrys Neil TruslerLulu M. TsaiMeng-Ling TsaiDustin J. TurnerStacy TurnerAlexander J. TurrellJoshua A. TwohyEdward F. TyrrellDavid B. Van KoeveringMatthew C. Van VleetBoris VaynblatAndrew R. VegaChinatsu H. VergaraCatherine VerreaultRobert R. VerrierVeronica Teresita Villarreal GaliciaBen VillnowEileen WalterKai WanAlexis WangFei WangJin WangLin WangLingmiao WangNing WangQingxian WangYifei WangBrandon-Dawson WarnerHarrison C. WeaverJennifer WebbTyler WebberLei WeiQiong WeiDarren WeidnerAaron WeinreichRussell I. WeitzLindsay M. WendlandtChong WengRadost R. WenmanChristopher F. WerthErin Mae WesslingSteven C. WesslingAdrienne WhetstoneRobert W. WilcoxElizabeth Ann Wiley

Thomas WilliamsJarred D. WilsonDaniel R. WinnowskiBrent WiskirchenMichael J. WittmannAdam R. WoelfelAnnie On Yee WongStella Man-Kei WongMark Edward WoodsKerry WorganWayne I. WorleyNathan J. WorrellCasey C. WrightLi WuPanrong XiaoLin XingJianbin XuKarthik M. YadatoreMercy YanRodger YanTingting Yan‘C’ Choung YangJie YangLiang Ji YangSu YangXuan YangYang YangYe YangScott YankeeDon D. YaoYing YaoDouglas J. YatesLinna YeEmily Yeh-LeeYouveak YengIp YeungXiao Ying (Jenny) YiJinying YinSoo Bong YoonYang YouMichael Scot YoungAnne Elizabeth YoungersChen Johnny YuShupei YuWei YuXiaoting YuKei Yeng YuenKaren ZangaraNicholas John ZappiaMaksim ZeldinLi ZengZhongzhong ZengFeng ZhangMiao ZhangXiaozhou (Joe) ZhangXia Hui ZhaoGuo ZhongHao ZhouMingren ZhouZhisheng ZhouYujia ZhuZachery M. Ziegler

www.actuary.org actuaria l upDATe FebrUary 2011 8

Parsing guidance on Funding Relief

Academy Webinar looks at life Products

life News

Pension News

The ACADemy’s lIFe prODuCTs COmmITTee offered its first webinar on Jan. 20. Presenters during the 90-minute interactive webinar—Chairperson Cande Olsen

of the life Products Committee, Chairperson linda Rodway of the Annuity Illustration Work Group, Chairperson linda lankowski of the life Settlements Work Group, and Chairperson John macBain of the Nonforfeiture Improvement Work Group—discussed a variety of life and annuity public policy issues. Topics included:➥   An update on a paper about government mandates and their

effect on life insurance and annuities that is being developed for legislators;

➥   Recommendations made to the National Association of Insur-ance Commissioners (NAIC) on changes to the NAIC Annuity Disclosure model, such as annuity illustration guidelines;

➥   The status of the Academy’s consumer guide to life settle-ments; and

➥   A look at nonforfeiture compliance in a dynamic life and annuity marketplace and the considerations involved in the potential reform of the nonforfeiture laws.

A CD of the presentation slides and the recorded audiocast—including the question-and-answer section—is available. Click here for more information.

The ACADemy’s pensIOn COmmITTee submitted a

letter to the Internal Revenue Service (IRS) with comments on the proposed regulations for hybrid retirement plans

issued by the IRS on Oct. 19. The proposed regulations would pro-vide guidance on changes made by the Pension Protection Act of 2006, as amended by the Worker, Retiree, and employer Recovery Act of 2008. The regulations would affect sponsors, administrators, participants, and beneficiaries of hybrid defined benefit pension plans. In its Jan. 12 letter, the committee responded to a series of questions posed by the IRS. It also raised several issues about some of the regulations that the committee believes may lead to undesir-able consequences or unintended results, and made recommenda-tions on how to remedy the problems.

The mulTIemplOyer plAns suBCOmmITTee pre-sented a webinar on Jan. 27 discussing the Internal Revenue Service’s (IRS) guidance notices regarding funding relief for

multiemployer defined benefit plans. During the 90-minute interac-tive webinar, speakers Harlan Weller, an actuary at the Department of the Treasury, and multiemployer Plans Subcommittee members Brian Dailey and Josh Shapiro provided an overview of the Pension Relief Act of 2010 and IRS Guidance Notice 2010-56, as well as an in-depth examination of IRS Guidance Notice 2010-83. eli Greenblum, the subcommittee chairperson, served as the moderator.

A CD of the presentation slides and the recorded audiocast—including the question-and-answer section—is available. Click here for more information.

Academy Comments on hybrid Plans

The ACADemy senT OuT On JAn. 31 its annual request that all members who volunteer on Academy boards, committees, or other groups acknowledge the Academy’s Con-

flict of Interest (COI) policy. All volunteers are required to complete the acknowledgment. The COI policy has been revised this year to incorporate a discussion paper published by the Academy’s Council on Professionalism to help Academy members identify and resolve any actual or potential conflicts of interest that might arise when performing work as an Academy volunteer. The paper, Conflicts of Interest When Doing Volunteer Work, answers three questions:➥   What is a conflict of interest?

➥   How does the Code of Professional Conduct apply to an Acad-emy volunteer?

➥   What actions should the volunteer take if a conflict of interest exists?

As the public voice for the U.S. actuarial profession, the Academy provides independent and objective actuarial information, analysis, and education for the formation of sound public policy. for the Academy to fulfill its mission, the Academy board and all those in leadership positions should set policies and conduct activities in such a way as to ensure that volunteer conflicts of interest do not impugn the integrity of Academy work products.

Professionalism News

Acknowledging Conflict of interest

www.actuary.org actuaria l upDATe FebrUary 2011 9

AT The requesT of the financial Accounting Standards Board (fASB) and the International Accounting Standards Board (IASB), the Academy offered an educational session

on the discount rate for insurance contracts at fASB headquarters in Norwalk, Conn.

Conducted by William Hines, chairperson of the Academy’s financial Reporting Committee, and Steve Strommen, chairper-son of the Academy’s International financial Reporting Standards Task force, the feb. 3 session was sparked by fASB interest in a 2009 Academy white paper, notes on the use of Discount rates in

Accounting present Value estimates.The paper illustrates the many ways discount rates are used to

develop risk-adjusted present value estimates, and suggests that flex-ibility in methodology continue to be allowed for accounting purposes. As Strommen told members of the two accounting boards, the discount rate discussed in the may 2009 International Accounting Standards Board exposure Draft on Fair Value Measurement can be characterized as a bottom-up approach while individuals working in insurance com-panies tend to take a top-down approach that starts from the insurer’s expected portfolio rate. Strommen said that because the paper was written before the latest exposure draft came out, the risk adjustment to the discount rate as discussed in the paper covered all risks in the contract, not just the insurer’s retained investment risk.

In a post-presentation discussion on credit spread volatility, fASB

Chairperson leslie Seidman noted that credit spreads widen and con-tract even if the tendency of the insurer is to invest so as to match the timing of asset and liability cash flows. She said that she didn’t think that the difference between a fulfillment value objective and a fair value objective justified an approach to the discount rate that would smooth out the volatility of credit spreads. Hines responded that potential volatility of earnings is a key issue identified by the industry and smoothing the credit spreads could be one way of addressing it.

Peter Clark, a member of the IASB staff, said that the IASB agrees on the importance of including the first three building blocks noted in the presentation—probability-weighted future cash flows, the effect of time value of money, and risk adjustment—in measurements. He argued, however, that an individual carrying out a valuation in practice does not necessarily have to separate the building blocks that way. He also pointed out that while the Academy’s examples in the slide presentation used a single discount rate to explain the con-cepts, in practice one would typically use a full yield curve and it can be more difficult to make the adjustments appropriately at all points on the yield curve. In the case of nonguaranteed elements, Clark said it may be appropriate to use different discount rates for the guaran-teed versus nonguaranteed benefits if the nonguaranteed benefits behave differently. Clark added that the IASB applauds the Acade-my’s examples of stochastic modeling that show the use of risk-neu-tral probabilities as one means of providing a risk adjustment.

risk management & financial reporting News

discount Rates in Accounting

➥   Peter Boyko, assistant vice president, corporate actuarial

for Manulife financial in Toronto, has been appointed the

vice chairperson of the Academy’s Life Capital Adequacy

Subcommittee. Other members are Stephen Banks,

associate consultant for global Preferred Solutions in

Norcross, ga.; Jeffrey Johnson, assistant vice president

and actuary, U.S. division for John Hancock in Boston;

Patricia Matson, principal for Deloitte Consulting in

Hartford, Conn.; John Nigh, an actuary in St. Petersburg, fla.;

Michal Ryduchowski, vice president, risk management at

HSBC Insurance (North America) in Jersey City, N.J.; David Walczak, an actuary for RSM Mcgladrey in Minneapolis;

and Josh Windsor, an actuary for RSM Mcgladrey in great

Neck, N.Y.

➥   Karin Bombard, assistant actuary for New York Life

Insurance Co. in Sleepy Hollow, N.Y., has joined the

Academy’s Life Illustration Work group.

➥   Ferdinand Uy, an actuary in Suwanee, ga., has joined the

Academy’s Annuity Illustration Work group.

➥   Nicholas Pasyanos, vice president and actuary for New

York Life Insurance Co. in Sleepy Hollow, N.Y., has joined the

Academy’s Nonforfeiture Improvement Work group.

➥   Kevin Reopel, an actuary in feeding Hills, Mass., has joined

the Academy’s Life Products Committee.

lIFe brIeFs

May 18, 2011, New orleans

the seminar will feature an in-depth discussion of several hot topics and specific implementation

challenges related to the principle-based approach (pba) for statutory reserves and capital.

topics will include:

➥ Preliminary results/conclusions from the NAIC VM-20 Impact Study

➥ Potential refinements to AG 43 and C3 Phase II based on the Oliver Wyman Study

➥ The structure and process of the NAIC’s feedback loop

➥ Implementation of C3 Phase III for life products

Preparing for Change under PBA: Life Company Reserves

and Capital Seminar

The seminar is jointly sponsored by the Academy and the

Society of Actuaries. Click here to register or to learn more.

being interviewed by a recruiter from Social Security.“By that time, I knew I was not going to be making a major contri-

bution to theoretical math. I had to find another place where I could make a contribution. What drew me to the SSA was the opportunity to get involved in something really important that was going to mat-ter to 300 million people,” said Goss. “We were really understaffed when I started. I considered that a good thing because I got to be involved from the very beginning.”

Today the Office of the Chief Actuary is still relatively small. There are just over 50 people on staff—24 certified actuaries, 20 employees on the actuary track, six to seven economists, three to four administrative assistants, and one or two information technolo-gists. everyone is a career employee; there are no political appointees.

“Our organization is completely flat, and everyone is on a first-name basis. We don’t contract work out, and we do all of our own programming,” Goss said. “We hire most of our people right out of school, many of whom have taken and passed at least one exam. Government salaries are not competitive with private industry, but government service provides an opportunity to be involved with really interesting and important issues.”

Goss sees the actuarial profession as an apprentice occupation. He tells new hires that it is important to be able to make quick, off-the-cuff estimates. These are often needed in discussion with policymakers.

“Do a quick estimate; do the long, detailed estimate; and then com-pare the two. This will hone your intuition,” said Goss. “The more you do it, the more the ability is at your fingertips. I also tell them not to think only in terms of what data you’d like. Deal with what exists.”

Goss said that when he first became an actuary, he was told that the work involved two steps. The first half was to do the calculations. The second half was to write up the results.

“I soon learned that the third half,” Goss joked, “is to go out and

explain the estimate and rationale convincingly.”That’s something Goss has been very successful at. He is fre-

quently called upon to address national and international meetings of actuarial organizations, to work with Congress members and tes-tify before congressional committees on the financial status of Social Security and the effect of proposed legislation, and to write articles for various publications on the actuarial status of the Social Security system. Goss has been a member of the Academy since 1994 and is an active member of the Social Insurance Committee. He has been a staff participant representing the Office of the Actuary on the National Commission on Social Security (1979), the National Com-mission on Social Security Reform (1983), and the Presidential Com-mission to Strengthen Social Security (2001). Goss worked closely with the recent Presidential Commission on fiscal Responsibility. He has also been a member of task forces and intergovernmental groups in the fields of social insurance, health insurance, and long-term care insurance. Goss was recognized for the significant impact he has had on the U.S. social insurance system in 2004 when the National Academy of Social Insurance presented him with the first Robert m. Ball Award.

www.actuary.org actuaria l upDATe FebrUary 2011 10

goSS, continued from Page 1

StatiStical SNAPShot

When Social Security monthly retirement benefits were first paid in 1940, the average life expectancy was 14 years at the earliest retirement age in Social Security of 65. From 1975 through 2008, there were 3.3 workers per beneficiary. The ratio today is 3-to-1, and by 2035, there will be just 2.1 workers “paying in” to the system per beneficiary.

➥   Craig Keizur, an actuary with Milliman in Seattle, has

joined the Academy’s Medicaid Work group.

➥   Karen Bender, principal for Oliver Wyman Actuarial

Consulting in Milwaukee, has been appointed chairperson

for the Academy’s Individual and Small group Market Task

force. David tuomala, senior consultant for Ingenix

Consulting in eden Prairie, Minn., has also joined the group.

health brIeFs

➥   Kenneth Kasner, assistant vice president and actuary for

The Hartford financial Services group in Conn., has been

appointed vice chairperson for the Academy’s emerging

Issues Task force.

➥   Joining the Academy’s Casualty Loss Reserve Seminar

Planning Committee are Andrea gardner, vice president

of corporate reserving for The Hartford in Conn.; Daniel thomas, manager for Deloitte Consulting in Detroit; Darci Noonan, an actuary in el Cajon, Calif.; Lise hasegawa,

vice president and chief reserving actuary for MetLife Auto

& Home in Warwick, R.I.; Mark Littmann, principal for

PricewaterhouseCoopers in Hartford, Conn.; Paul Miotke,

chief risk officer for Ally Insurance in Southfield, Mich.;

Peter Rauner, senior managing consultant for Pinnacle

Actuarial Resources in Chicago; Sarah Krutov, senior vice

president and chief risk officer for SCOR Reinsurance Co.

in New York; and Yi Jing, consultant for Towers Watson in

Weatogue, Conn.

casUalty brIeFs

➥   Kevin Reopel, an actuary in feeding Hills, Mass., has joined

the Academy’s Life Settlements Investments Work group.

➥   gareth Kennedy, manager for ernst & Young in Chicago,

has joined the Academy’s Risk Management and financial

Reporting Council.

rIsk maNaGemeNt aNd FINaNcIal reportING brIeFs

assocIate edItors

William CarrollPatrick CollinsAndrew ermanRade musulinGeoffrey SandlerDonald SegaledItor

Olivia marshall(editor@actuary.org)desIGN aNd prodUctIoN

BonoTom Studio Inc.

desIGNer

Paul Philpott

pUblIcatIoNs aNd marketING prodUctIoN maNaGer

Cindy Johns

American Academy of ActuariespresIdeNt

mary frances millerpresIdeNt-elect

David K. Sandbergsecretary

Stephen H. RosentreasUrer

John J. SchubertvIce presIdeNts

Timothy l. WisecarverThomas f. WildsmithArthur V. Panighettiethan e. KraJohn GlebaHenry W. SiegelexecUtIve dIrector

mary DownsdIrector oF commUNIcatIoNs

mark CohenassIstaNt dIrector For pUblIcatIoNs

linda mallonexecUtIve oFFIce

The American Academy of Actuaries1850 m Street NWSuite 300Washington, DC 20036Phone 202-223-8196fax 202-872-1948www.actuary.org

Statements of fact and opinion in this publication, including editorials and letters to the editor, are made on the responsibility of the authors alone and do not necessarily imply or represent the position of the American Academy of Actuaries, the editors, or the members of the Academy.

©2011 The American Academy of Actuaries. All rights reserved.

www.actuary.org actuaria l upDATe FebrUary 2011

Actuarial Update

11

2010 P/C Loss Reserve Law Manual

The Property/Casualty Loss Reserve Law Manual is designed to help appointed actuaries comply with the National Association of Insurance Commissioners’ annual statement requirements for statements of actuarial opinion (SAO). Learn more. Single-User Subscription CD-ROM . . . . . . . . . . . . . . . . . . . . . . . $750

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QUESTIONS?For additional information, please contact  Phillip Hafler at (202) 223-8196.

2011 Life & Health Valuation Law Manual

The Life & Health Valuation Manual is designed to help appointed actuaries comply with the requirements of the National Association of Insurance Commissioners’ Model Standard Valuation Law and the Model Actuarial Opinion and Memorandum Regulation. Learn more.

Book . . . . . . . . . . . . . . . . . . . . . . . . . . $745

Single-User Subscription CD-ROM . . . . . . . . . . . . . . . . . . . . . . . $580

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Order options: OnlineMail/Fax

QUESTIONS? For additional information, please contact Phillip Hafler at (202) 223-8196.

The ACADemy releAseD A repOrT on the National Association of Insurance Commissioners’ (NAIC) risk-based capital

(RBC) formulas on Jan. 31, as part of the Academy’s contributions to the NAIC’s Solvency modernization Initiative (SmI). The report, which was divided into three sections that were prepared by the Academy’s health, life, and property/casualty RBC committees, discussed intended or expected safety levels for RBC in aggregate for the original life, health, and property and casualty RBC formulas. It also identified risks that are missing from the NAIC’s RBC formulas.

In an accompanying letter to the chair of the NAIC’s SmI RBC Subgroup, Academy President mary frances miller wrote, “While there are three separate RBC formulas, there is at least one thing that they all have in common: None of the formulas con-tain an explicit safety level for aggregate RBC. The RBC formulas were not designed by establishing aggregate RBC at an explicit calibration level where this calibration coincides with a statistical outcome.”

The Academy’s report was issued in response to a request for assistance from the NAIC’s SmI Task force. The NAIC’s solvency modernization initiative was launched in June 2008 to exam-ine the effectiveness of the current U.S. solvency framework of all lines of insurance and develop a road map for future changes. The Academy agreed to provide assistance with the SmI project at an interim meeting of the SmI Task force last march

in Phoenix. The Phoenix gathering was followed by a meeting with representatives from the Academy and other stakeholders at the NAIC’s Washington office in July that focused on issues such as calibra-tion and covariance within the NAIC’s RBC formu-las, missing risks that should be quantified in the NAIC’s RBC formulas, and the identification of risks that should be included.

for the next phase of the project, the NAIC’s SmI Task force has asked the Academy’s RBC commit-tees to provide the following information by June 30:➥   A list of practical alternatives for structuring time

horizons, safety levels, and risk metrics—and the likely strengths and weaknesses of each, includ-ing the merits of allowing calibration compo-nents to vary by type of risk or type of insurer.

➥   Recommendations for improving the correla-tion/covariance methodologies used in RBC, including the merits of replacing current formu-las with correlation matrices and the extent to which improved correlation/covariance meth-odologies developed by the Academy’s P&C RBC Committee and Health Solvency Work Group may be applicable to life RBC.

Academy Reports on RBC Formulas

➥   Raymond Berry, an actuary for grant

Thornton in Chicago, has joined the

Academy’s Social Insurance Committee.

peNsIoN brIeFs