Q

Qualification Standards
for Actuaries
Issuing Statements ofActuarial Opinion in the
United States

actuary.org

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

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Q

Qualification Standards
for Actuaries
Issuing Statements ofActuarial Opinion in the
United States

Effective January 1, 2022

Approved by the Board of Directors
American Academy of Actuaries

The American Academy of Actuaries is a 19,500-member professional
association whose mission is to serve the public and the U.S. actuarial
profession. For more than 50 years, the Academy has assisted public
policymakers on all levels by providing leadership, objective expertise,
and actuarial advice on risk and financial security issues. The Academy
also sets qualification, practice, and professionalism standards for
actuaries in the United States.

AMERICAN ACADEMY OF ACTUARIES
1850 M STREET NW, SUITE 300, WASHINGTON, D.C. 20036
202-223-8196 | WWW.ACTUARY.ORG© 2021 American Academy of Actuaries. All rights reserved.

Table of Contents
Transmittal Memorandum ................................................................................................................iii
Section 1. Introduction....................................................................................................................... 1
1.1 Duty of Qualification...................................................................................................................................................... 2
1.2 Purpose of the U.S. Qualification Standards.......................................................................................................... 2
1.3 General and Specific Qualification Standards...................................................................................................... 3
1.4 Structure of the U.S. Qualification Standards....................................................................................................... 3
1.5 Periodic Assessment...................................................................................................................................................... 3

Section 2. General Qualification Standard ....................................................................................4
2.1 Basic Education and Experience Requirement....................................................................................................4
		2.1.1 Enrolled Actuary.................................................................................................................................................. 5
		2.1.2 Basic Education and Experience Requirement Must Be Met Only Once......................................... 6
		2.1.3 Changes in Practice or Application............................................................................................................... 6
2.2 Continuing Education Requirement........................................................................................................................ 6
		2.2.1 Background........................................................................................................................................................... 6
		2.2.2 Continuing Education Requirement in General....................................................................................... 7
		2.2.3 Initial Year of Applicability................................................................................................................................ 7
		2.2.4 Coordination With Specific Qualification Standards.............................................................................. 7		

2.2.5 Practicing in More Than One Area of Actuarial Practice........................................................................ 7

		2.2.6 Relevant Continuing Education.....................................................................................................................8
		2.2.7 Additional Guidance..........................................................................................................................................9
2.3 A
 ctuaries Issuing Statements of Actuarial Opinion in More Than One Area of Actuarial Practice....9		2.3.1 S tatements of Actuarial Opinion Involving Skills That Can
Be Learned in More Than One Area of Actuarial Practice.....................................................................9		2.3.2 S tatements of Actuarial Opinion That
Blend Elements of Two or More Areas of Actuarial Practice................................................................9		2.3.3 Statements of Actuarial Opinion in Two orMore Distinct Areas of Actuarial Practice................................................................................................ 10
2.4 S tatements of Actuarial Opinion Issued by More Than One Actuary....................................................... 10

Section 3. Specific Qualification Standards.................................................................................. 11
3.1 Basic Education Requirement..................................................................................................................................11
		3.1.1 Successful Completion of Examinations...................................................................................................12
			 3.1.1.1 S tatement of Actuarial Opinion, NAIC Life, Accident & Health,and Fraternal Annual Statement..................................................................................................12
			 3.1.1.2 S tatement of Actuarial Opinion, NAIC Property andCasualty Annual Statement............................................................................................................12
			 3.1.1.3 Statement of Actuarial Opinion, NAIC Health Annual Statement....................................12
		3.1.2 Alternative Basic Education...........................................................................................................................13
3.2 Experience Requirement............................................................................................................................................13
3.3 Continuing Education Requirement......................................................................................................................13QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESi

Section 4. Changes in Practice and Application.........................................................................14
4.1 Changes in Practice Area............................................................................................................................................14
		4.1.1 General Qualification Standard....................................................................................................................14
		4.1.2 Specific Qualification Standard....................................................................................................................14
4.2 Changes in Application...............................................................................................................................................15
4.3 Emerging or Nontraditional Areas of Actuarial Practice.................................................................................15

Section 5. Acknowledgment of Qualification..............................................................................16
Section 6. Recordkeeping Requirements......................................................................................17
6.1 Continuing Education Recordkeeping Requirements.....................................................................................17
6.2 Substantiating Compliance...................................................................................................................................... 18

Appendixes
Appendix 1 Examples of Statements of Actuarial Opinion...........................................................................................................19
I. General Observations......................................................................................................................................................19
II. Commonly Issued Actuarial Opinions and Work Products.............................................................................. 20
III. Application of U.S. Qualification Standards to Public Service Actuaries....................................................23
Appendix 2 	Sample Alternative Basic Education Statement (Specific Qualification Standard)......................................26
Appendix 3	Procedures for the Adoption of Qualification Standards by the American Academy of Actuaries.......27
Appendix 4	Guidelines for Determining When Specific Qualification Standards Should Be Developed ...................34
Appendix 5	Sample Continuing Education Recordkeeping Format.........................................................................................36ii

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESTransmittal Memorandum
November 30, 2021
To:	Members of Actuarial Organizations Governed by the Qualification Standards of
the American Academy of Actuaries
From:	The Board of Directors of the American Academy of Actuaries
The Committee on Qualifications of the American Academy of Actuaries
Re:	
Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the
United States
This document contains the amended Qualification Standards for Actuaries IssuingStatements of Actuarial Opinion in the United States (U.S. Qualification Standards or USQS)
promulgated by the American Academy of Actuaries (the Academy). This document
supersedes in its entirety the Qualification Standards (including Continuing Education
Requirements) for Actuaries Issuing Statements of Actuarial Opinion in the United Statesthat took effect January 1, 2008. The amended U.S. Qualification Standards take effectJanuary 1, 2022, indicating that this document applies to actuaries issuing statements ofactuarial opinion starting on January 1, 2023, and that such actuaries will need to meetthe continuing education (CE) requirements before issuing any Statement of Actuarial
Opinion (SAO) in 2023.

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESiii

Background
During 2019, the NAIC amended the instructions and definitions related to thequalifications for an Appointed Actuary signing NAIC Statements of Actuarial Opinion for
Property and Casualty Annual Statements to reflect the addition of the Society of Actuaries(SOA) specialty track in general insurance. As a result of the change, the American Academyof Actuaries Board of Directors instructed the Committee on Qualifications (COQ) toreview and recommend any appropriate changes in the language related to the specificqualification standards for NAIC Statements of Actuarial Opinion for Property and Casualty
Annual Statements and to consider whether any other changes should be recommended
given the passage of time since 2008, the last time the USQS were amended.
The first exposure draft was issued on September 2, 2020, with a comment deadline of
October 30, 2020. The COQ received 152 comment letters on the first exposure. The COQ
carefully considered those comments and, as a result, proposed changes that were reflected
in a second exposure draft released in June 2021 with a comment deadline of August 20,
2021. The COQ received 36 comment letters on the second exposure draft pointing out
additional areas for potential clarification. The comments received on both exposure drafts
indicate that many members of the actuarial profession care strongly about the USQS andthe obligations they place on individual actuaries subject to the U.S. Code of Professional
Conduct, as well as support for the overall structure of the 2008 USQS, which introduced
significant revisions such as the concept of the broadly applicable Statement of Actuarial
Opinion and the 30-hour continuing education requirement. The comments received on
both exposure drafts were thoughtful, came from actuaries from various practice areas, andcovered a wide range of topics. The commentators did not confine their comments just to
the changes set forth in the exposure drafts but on the USQS as a whole. As a result, thisfinal USQS includes revisions to most sections in response to the many comments received.

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QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESMajor Changes from the 2008 USQSDefinition of Actuary in Section 1
In order to emphasize that an actuary who issues an SAO and is a member of a U.S.-basedorganization that has adopted the U.S. Code of Professional Conduct is subject to the USQS,
the definition of an actuary was moved from a footnote in section 1 to the third paragraphof that section.

Basic Education in Section 2.1
This section was revised to emphasize that the basic education requirements focus on
education and credentials earned, rather than current membership in organizations. The
revised language is in no way a reflection on the credibility or value of any particularactuarial organization, but rather reflects the determination that it is the actuaries’
basic education that qualifies them to practice in the U.S., independent of a particularorganization’s current membership criteria.
This section also clarifies how an actuary who is a member of one of the five U.S.-based
actuarial organizations but does not have a credential from the Casualty Actuarial Society(CAS) or the SOA, or is not an Enrolled Actuary (EA)—primarily a non-U.S. credentialed
actuary—can become qualified. Such an actuary will be required to have obtained a CAS,
SOA, or EA credential or have achieved membership in the Academy prior to issuing an
SAO in the U.S. This requirement to achieve membership in the Academy subjects theactuary to the Academy’s vetting process which, in part, ensures that the actuary has met
the U.S.-specific knowledge and education requirements that the Academy has determined
to be comparable to those met by actuaries with CAS, SOA, or EA designations. An actuary
who has met the basic education and experience requirements of the USQS for a practicearea is not required to meet the requirement again for the same practice area and, as a result,continued membership in any U.S.-based actuarial organization is not required.†† However, as stated in section 1, an actuary is subject to the USQS only if the actuary is a member of one of the U.S.-based actuarialorganizations.

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESv

Subject Area Knowledge in Section 2.1(d)This section includes revised language to clarify that section 2.1(d) sets qualifications for
issuing SAOs “in an area of actuarial practice or any particular subject within an area of
actuarial practice” rather than “an area covered by a specialty track offered by the Societyof Actuaries or in an area of practice covered by the exams for the Casualty Actuarial
Society or the American Society of Pension Professionals and Actuaries.” The goal was tokeep this section of the U.S. Qualification Standards clearly focused on the basic education
component in a way that was both sufficiently particular about basic education as well as
sufficiently general so as not to become outdated solely because of a change in the name ofa specialty track or the addition of a particular specialty track offered by a basic education
provider. In addition, the applicability of this section of the 2008 USQS to actuaries with
CAS credentials was unclear because the CAS does not currently offer specialty tracks.

Enrolled Actuaries in Section 2.1.1
Changes to section 2.1.1 are intended to ensure that EAs have the appropriate basic
education and experience to issue various SAOs. In particular, the USQS now distinguishes
between the qualification requirements for actuaries issuing pension SAOs related to ERISA
or to relevant issues covered by Treasury Circular 230, and other pension-related SAOs.
In addition, a new footnote to section 2.1.1 refers directly to the Joint Board for the
Enrollment of Actuaries’ (JBEA’s) current qualifying experience requirements for EAs in 20
CFR § 901.12(b). This is to ensure that the U.S. Qualification Standards track the current
JBEA requirements (i.e., those in place on January 1, 2022) should the law change in the
future.
Finally, the USQS now requires that all actuaries choosing to be members of one of the U.S.based actuarial organizations meet the same CE requirements as other actuaries. Thus, the“carve-out” for EAs has been eliminated on the theory that sufficient time has passed since2008, when the annual 30-hour requirement was first imposed.

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QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESBias Topics CE—New Requirement in Section 2.2.6
The USQS now includes a one-hour minimum CE requirement dedicated to what is referred
to as “bias topics” in section 2.2.6. The bias topic requirement is relevant to actuaries
issuing SAOs in all practice areas and is focused on bias topics that provide knowledge andperspective specifically relevant to the Actuarial Services that form the basis of an SAO.
Actuaries play an important role in helping maintain the public’s trust in financial security
systems, products, and services. Therefore, this new requirement is consistent withassuring the public that actuaries will fulfill that role in a future in which big data, artificial
intelligence, and evolving regulatory and societal requirements will place new demands on,
or expectations of, such systems, products, and services.
Note that “bias topics” is broadly defined so that it can encompass any bias-related subject
that directly impacts or is relevant to an SAO.

Recognition of the General Insurance Track in Section 3.1.1.2
Section 3.1.1.2, related to the issuance of a “Statement of Actuarial Opinion, NAIC Property
and Casualty Annual Statement,” was amended to recognize that the Society of Actuaries
also administers relevant examinations.

Committee on Qualifications
Katherine S. Campbell, Chairperson
Mary J. Bahna-Nolan			F. Kevin Russell
Thomas A. Campbell			Lisa A. Slotznick
Maryellen J. Coggins			Thomas S. Terry
Kenneth F. Hohman			D. Joeff Williams
Laurel A. Kastrup			

Chad C. Wischmeyer

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Qualification Standards

for Actuaries Issuing Statements of Actuarial Opinion

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QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESin the United States

Introduction

SECTION 1

The American Academy of Actuaries (Academy), through Precept 2 of its Code ofProfessional Conduct, requires its members to perform Actuarial Services only when they
are qualified to do so on the basis of basic and continuing education and experience andonly when they satisfy applicable qualification standards.1 Such Actuarial Services may
include the rendering of advice and recommendations or opinions based upon actuarialconsiderations, including the issuance of Statements of Actuarial Opinion.
Members of U.S.-based organizations that have adopted the Code of Professional Conduct,whether or not they are also members of the Academy, are subject to all requirements
imposed by the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion
in the United States (U.S. Qualification Standards or USQS). The Code also requires that
actuaries observe the applicable qualification standards that have been promulgated by a
Recognized Actuarial Organization (as defined in the Code of Professional Conduct) for thejurisdiction in which the actuary renders Actuarial Services.
For purposes of the USQS, a “Statement of Actuarial Opinion” (SAO) is an opinion
expressed by an actuary who is subject to the Code of Professional Conduct by virtue ofmembership in a U.S.-based actuarial organization, where such opinion is expressed in thecourse of performing Actuarial Services and intended by that actuary to be relied uponby the person or organization to which the opinion is addressed. “Actuarial Services” aredefined in the Code of Professional Conduct as “Professional services provided to a Principal
1 The Codes of Professional Conduct of all five of the U.S.-based actuarial organizations are identical in this respect.

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

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[client or employer] by an individual acting in the capacity of an actuary. Such services
include the rendering of advice, recommendations, findings, or opinions based upon
actuarial considerations.”
Some actuaries hold positions that are non-actuarial in nature or have non-actuarialaspects (for example, general management positions). Actuaries in such positions may haveoccasion to issue oral or written statements by virtue of the positions they hold and not
because they are actuaries. The USQS are not intended to apply to such statements, eventhough they may happen to have actuarial aspects. If it is common for persons holding
comparable positions to issue such statements, whether or not they happen to be actuaries,
this is evidence that the USQS are not intended to apply.
Actuaries who issue Statements of Actuarial Opinion when rendering Actuarial Services
in the United States are required by the Code of Professional Conduct to satisfy the USQS.
Actuaries who are not members of a U.S.-based organization may be required by theiractuarial organization to meet the USQS. The USQS does not address these situations.

1.1	Duty of Qualification
An actuary must be mindful of the obligation imposed by Precept 2 of the Code ofProfessional Conduct not to perform Actuarial Services unless qualified to do so. Thisobligation may require the actuary to obtain qualifications in addition to those set forth in
the USQS. However, where an actuary has satisfied the USQS, in the absence of evidence
to the contrary, there is a presumption that an actuary has met the duty of qualification
imposed by the Code of Professional Conduct.

1.2	Purpose of the U.S. Qualification Standards
A Statement of Actuarial Opinion may be used by parties who are not familiar with thequalifications of an actuary who issues such statements. An actuary who issues Statementsof Actuarial Opinion must have achieved basic education and experience in relevant areasof actuarial practice and must maintain necessary expertise through continuing education.
The USQS have been developed to provide guidance to actuaries so that they can determine
whether they are qualified to issue Statements of Actuarial Opinion. The USQS aredeveloped through established Academy notice and comment procedures (see appendix 3).

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QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

1.3	General and Specific Qualification Standards
The General Qualification Standard (see section 2) provides the basic education andexperience requirements and continuing education requirements for most Statementsof Actuarial Opinion. However, in some instances, the Academy’s Board of Directors has
determined that certain additional requirements must be met for an actuary to have thenecessary qualifications to issue a particular Statement of Actuarial Opinion. In these
instances, an actuary must satisfy the Specific Qualification Standard for that particularStatement of Actuarial Opinion (see section 3).

1.4	Structure of the U.S. Qualification Standards
The USQS are structured around areas of actuarial practice. Areas of actuarial practice arecasualty, health, life, and pension. An actuary practicing in an area of actuarial practice, aparticular subject within an area of actuarial practice, or an emerging or nontraditional
area may be called upon to issue Statements of Actuarial Opinion and, in suchcircumstance, is required to comply with the USQS. Additional guidance concerning theapplication of the USQS to an area of actuarial practice, a particular subject within an areaof actuarial practice, or an emerging or nontraditional area of actuarial practice appears in
sections 2.1(d) and 4.3.
The USQS include basic education and experience requirements and continuing education
requirements. In order to comply with the USQS, an actuary is required to satisfy all ofthese elements.

1.5	Periodic Assessment
Actuaries should regularly review their qualifications and may contact the Committee on
Qualifications or the Actuarial Board for Counseling and Discipline (ABCD) to address
specific questions and concerns.

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

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SECTION 2

General Qualification Standard

An actuary who issues a Statement of Actuarial Opinion when providing Actuarial Services
must satisfy the General Qualification Standard requirements. When issuing certain typesof Statements of Actuarial Opinion, an actuary must also satisfy Specific Qualification
Standards (see section 3). An actuary must have met the following General Qualification
Standard requirements for basic education and experience and continuing education before
issuing a Statement of Actuarial Opinion:

2.1 Basic Education and Experience Requirement
To satisfy the General Qualification Standard, before issuing a Statement of Actuarial
Opinion, an actuary must meet all of the following criteria:a.	Basic Education: Have achieved 1) through education or mutual recognition, aFellow or Associate designation from either the Society of Actuaries (SOA) or the
Casualty Actuarial Society (CAS), 2) the Enrolled Actuary (as defined in section
2.1.1) designation, or for all others, 3) membership in the American Academy ofActuaries through its approval process.2
b. Experience: Have three years of responsible actuarial experience, which is defined
as work that requires knowledge and skill in solving actuarial problems.
c.	U.S.-Specific Knowledge: Be knowledgeable, through education or documented
professional development, of 1) the U.S. Law applicable to the Statement of
Actuarial Opinion, and 2) U.S. actuarial practices and principles. “Law” is definedin the Code of Professional Conduct as statutes, regulations, judicial decisions, andother statements having legally binding authority.
2 Continued membership in any specific U.S.-based actuarial organization is not required. However, as stated in section 1, an actuary is
subject to the USQS only if the actuary is a member of one of the U.S.-based actuarial organizations.

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QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

d.	
Subject Area Knowledge: In order to issue Statements of Actuarial Opinion in
an area of actuarial practice or any particular subject within an area of actuarial
practice, an actuary must meet either (1) or (2) below with respect to theparticular subject of the Statement of Actuarial Opinion:3
		(1)	Attained fellowship in the CAS or SOA, or attained the highest possible
actuarial designation of a non-U.S. actuarial organization. In addition, meet
one of the following:			i. 	Successfully completed education relevant to the subject of the SAO. Sucheducation may have been obtained in attaining the fellowship designationor highest possible designation of a non-U.S. actuarial organization, or bycompleting additional education relevant to the subject of the SAO; or			ii. 	Have a minimum of one year of responsible actuarial experience in theparticular subject relevant to the SAO under the review of an actuary who
was qualified to issue the SAO at the time the review took place under the
USQS in effect at that time.

		(2)	Have a minimum of three years of responsible actuarial experience in theparticular subject relevant to the SAO under the review of an actuary who
was qualified to issue the SAO at the time the review took place under the
USQS in effect at that time.4

2.1.1	Enrolled Actuary — An Enrolled Actuary is an individual who has met therequirements of Title III, Subtitle C of the Employee Retirement Income Security
Act of 1974 (ERISA) and has satisfied the qualifying experience requirements forenrollment as prescribed in 20 CFR § 901.12(b) in effect as of January 1, 2022.5
a.	For purposes of pension SAOs related to ERISA, or of pension SAOs relevant toissues covered by Treasury Circular 230, an Enrolled Actuary is deemed to satisfy
section 2.1 (a) through (d).
3 See section 4 for requirements regarding changes in area of actuarial practice or new applications in an area of actuarial practice, as well as
emerging or nontraditional areas of actuarial practice.
4 An actuary qualified to issue the SAO at the time of the review may include an actuary with an Associate designation who qualifies throughsection 2.1(d)(2).
5 20 CFR § 901.12(b) Qualifying experience. Within the 10-year period immediately preceding the date of application, the applicant shallhave completed either:(1) A minimum of 36 months of certified responsible pension actuarial experience; or(2) A minimum of 60 months of certified responsible actuarial experience, including at least 18 months of certified responsible
pension actuarial experience.

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b.	For purposes of a pension SAO not covered under 2.1.1(a), an Enrolled Actuary
is deemed to satisfy section 2.1 (a) through (d) if the Enrolled Actuary has either
1) completed a minimum of one year of responsible actuarial experience in thearea of actuarial practice relevant to the subject of the SAO under the review ofan actuary who was qualified to issue the SAO at the time the review took place
under the USQS in effect at that time; or 2) completed education relevant to theparticular subject of the SAO, either through the curriculum required to obtainan actuarial designation relevant to the particular subject of the SAO or throughadditional education.
c.	For all other SAOs, an Enrolled Actuary is deemed to have satisfied sections 2.1(a)and 2.1(b) but must satisfy sections 2.1(c) and 2.1(d) with regard to the subject of
the Statement of Actuarial Opinion.
2.1.2 Basic Education and Experience Requirement Must Be Met Only Once — An

actuary need satisfy the basic education and experience requirement in an area of
actuarial practice or in a particular subject area within an area of actuarial practice
only once. Accordingly, if an actuary has satisfied the basic education and experience
requirements to issue an SAO in an area of actuarial practice under a prior version of
the USQS, the actuary is not required to satisfy the basic education and experience
requirements under any subsequent version of the USQS in that same area of actuarial
practice.
2.1.3 Changes in Practice or Application — For specific guidance on new or changed areasof actuarial practice or changes in the application of actuarial science, see section 4.

2.2 Continuing Education Requirement
2.2.1 Background — Actuarial practice is grounded in the knowledge and application of

actuarial science, a constantly evolving discipline. If actuaries are to provide theirPrincipals with high-quality service, it is important that they remain current on
emerging advancements in actuarial practice and science that are relevant to theActuarial Services they provide. Further, opportunities to practice are expanding
beyond traditional work on pension and insurance issues to encompass the broader
world of financial services. Actuaries working in emerging areas need to be familiar
with relevant new techniques and concepts from other related disciplines.
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QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

2.2.2	Continuing Education Requirement in General — To satisfy the General

Qualification Standard, actuaries are required to complete and document at least
thirty (30) hours each calendar year of relevant continuing education of which at least
three (3) hours must be on professionalism topics, at least one (1) hour must be on
bias topics, no more than three (3) hours may be on general business skill topics, andat least six (6) hours must be “organized activities” (see section 2.2.6). The 30-hour
requirement will typically be met in the calendar year preceding the year in which theactuary issues a Statement of Actuarial Opinion. However, if the 30-hour requirement
is not met in the year before an actuary issues a Statement of Actuarial Opinion, theshortfall can be earned in the same year, if earned prior to issuing the SAO. The hours
earned to satisfy the shortfall cannot be applied to satisfy the continuing education
requirement for the current year.
	Example:
An actuary earns 30 hours of continuing education in 2020 and, assuming the otherqualification requirements are met, can issue SAOs in 2021. However, in 2021, theactuary only earns 27 hours of continuing education. The actuary cannot issue SAOs
in 2022 until 3 hours of continuing education are earned. The actuary must then earn
an additional 30 hours of continuing education in 2022 to issue SAOs in 2023.
2.2.3	Initial Year of Applicability — Hours spent meeting the basic education andexperience requirement may be applied toward the continuing education requirement
if earned in the year prior to issuing the Statement of Actuarial Opinion.
2.2.4	Coordination With Specific Qualification Standards — The 30-hour requirement

includes hours obtained pursuant to the continuing education requirement of theSpecific Qualification Standards (see section 3.3).
2.2.5	Practicing in More Than One Area of Actuarial Practice — If an actuary mustobtain continuing education requirements in more than one area of actuarial
practice (see section 2.3), the total annual hours required for all areas of actuarial
practice combined remains at 30. An actuary should use good judgment in obtaining
continuing education in all areas of practice related to the actuary’s work.

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2.2.6	Relevant Continuing Education — Continuing education is “relevant” if it (1)broadens or deepens an actuary’s understanding of one or more aspects of the work
an actuary does; (2) exposes an actuary to new and evolving techniques for addressing
actuarial issues; (3) expands an actuary’s knowledge of practice in related disciplinesthat bear directly on an actuary’s work; or (4) facilitates an actuary’s entry into a
new area of actuarial practice. Ultimately, it is an actuary’s responsibility to make areasonable, good-faith determination of what continuing education opportunities will
enhance an actuary’s ability to practice in a desired field.
	Relevant continuing education includes not only technical topics in the actuary’s areaof actuarial practice, but also includes general business skill topics, bias topics, andprofessionalism topics. For example:
a. General business skill topics include content that assists in developing client
relationship management skills, presentation skills, communication skills, project
management, and personnel management.
b.	Bias topics include content that provides knowledge and perspective that assist in
identifying and assessing biases that may exist in data, assumptions, algorithms,
and models that impact Actuarial Services. Biases may include but are not limited
to statistical, cognitive, and social biases.
c.	Professionalism topics include content that assists in understanding and applying
the Code of Professional Conduct, actuarial standards of practice (ASOPs), andrelated actuarial professionalism guidance. Professionalism continuing education
includes studying, reviewing, or providing input on an exposure draft of an ASOP;
studying or reviewing the Code of Professional Conduct; attending an actuarial
professionalism webinar; and serving on the Actuarial Standards Board or aprofessionalism committee.
	Continuing education can be obtained through either “organized activities” thatinvolve interaction with actuaries or other professionals working for different
organizations or activities other than organized activities (“other activities.”)	

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QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

“Organized activities” include, but are not limited to, conferences, seminars, webcasts, inperson or online courses, or committee work that is directly relevant to the area of actuarial
practice of the subject of the Statement of Actuarial Opinion. In-house meetings cansatisfy the requirement of interaction with actuaries or professionals working for different
organizations by using outside speakers.
	“Other activities” include, but are not limited to, reading actuarial literature, statutes,
or regulations; reading other books, papers, or articles on relevant technical or
professional topics; writing professional papers or articles; listening to recordingsof actuarial meetings or other relevant seminars or conferences; relevant in-housemeetings; studying for actuarial exams; drafting actuarial exam questions; or preparing
to speak or lead a discussion at a continuing education activity.
2.2.7	Additional Guidance — An hour of continuing education is defined as 50 minutes andfractions of an hour may be counted. Hours of continuing education in excess of theannual requirement, including hours of organized activities, may be carried forward
one year.

2.3 A
 ctuaries Issuing Statements of Actuarial Opinion inMore Than One Area of Actuarial Practice2.3.1	Statements of Actuarial Opinion Involving Skills That Can Be Learned in More Than

One Area of Actuarial Practice — Some Statements of Actuarial Opinion may require
the exercise of skills that can be learned in more than one area of actuarial practice; forexample, the principles involved in calculating annuity reserves could be learned in either
the life or pension areas. An actuary who issues such Statements of Actuarial Opinion
is deemed to meet the General Qualification Standard if the actuary meets the basic
education and experience requirements and continuing education requirements in any
one of the areas of actuarial practice relevant to the Statement of Actuarial Opinion.
2.3.2	Statements of Actuarial Opinion That Blend Elements of Two or More Areas ofActuarial Practice — Some Statements of Actuarial Opinion may blend significant
elements of two or more areas of actuarial practice (for example, reserving forcontinuing care retirement communities, which involves significant elements of both
health and life practice). An actuary who issues such Statements of Actuarial OpinionQUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

9

is deemed to meet the General Qualification Standard if the actuary meets the basic
education and experience requirement in any one area. In meeting the continuing
education requirement, an actuary should include material in all areas of actuarial
practice relevant to the Statement of Actuarial Opinion. An actuary may find it
prudent to work with an actuary with complementary experience and education (seesection 2.4 below) or to obtain additional experience and/or continuing education
relevant to the Statement of Actuarial Opinion.
2.3.3	Statements of Actuarial Opinion in Two or More Distinct Areas of Actuarial

Practice — An actuary may choose to issue Statements of Actuarial Opinion in two or
more distinct areas of actuarial practice, although each Statement of Actuarial Opinion
issued by the actuary may involve only one area of actuarial practice (for example, alife actuary might agree to conduct a reserve adequacy analysis for a health insurancecompany). An actuary who issues Statements of Actuarial Opinion in two or more
distinct areas of actuarial practice must fully satisfy the basic education and experience
requirement in each area. In meeting the continuing education requirement, an
actuary should include material in each area of actuarial practice (in this example, lifeand health).

2.4	Statements of Actuarial Opinion Issued byMore Than One Actuary
An actuary who meets the General Qualification Standard may not necessarily be qualified,
as required by Precept 2 of the Code of Professional Conduct, to issue a particular Statementof Actuarial Opinion. For example, the Statement of Actuarial Opinion may involve
elements of an area of actuarial practice in which an actuary is not fully qualified. Inthat event, for purposes of the General Qualification Standard, an actuary may issue theStatement of Actuarial Opinion with another actuary whose basic education and experience,or continuing education, complements that of the first actuary with respect to the jointly
issued Statement of Actuarial Opinion. Both actuaries will be deemed to meet the General
Qualification Standard if their collective basic education and experience and continuing
education are sufficient to meet the requirements for all areas of actuarial practice relevant to
the Statement of Actuarial Opinion, and if they are collectively qualified under Precept 2 of
the Code of Professional Conduct to issue the particular Statement of Actuarial Opinion.

10

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESSECTION 3

Specific Qualification Standards

Specific Qualification Standards are developed6 by the Committee on Qualifications when,in the committee’s view, it is necessary for an actuary to possess specific qualifications
beyond those required to satisfy the General Qualification Standard to issue a particular
type of Statement of Actuarial Opinion.
These Specific Qualification Standards apply only to the types of Statements of Actuarial
Opinion for which such standards have been adopted.7
The Statements of Actuarial Opinion for which Specific Qualification Standards currently
should be met are the following:•

Statement of Actuarial Opinion, NAIC Life, Accident & Health, andFraternal Annual Statement•

Statement of Actuarial Opinion, NAIC Property and Casualty Annual Statement•

Statement of Actuarial Opinion, NAIC Health Annual Statement

3.1 Basic Education Requirement
An actuary must have obtained sufficiently comprehensive knowledge of and responsible
experience with the subjects specifically involved to be able to determine which actuarialconcepts and techniques are applicable to the assignment and to apply those concepts
and techniques successfully. In addition to meeting the basic education and experience
requirement of the General Qualification Standard (see section 2.1), an actuary must meet
additional specific knowledge requirements as outlined below. An actuary may obtain suchknowledge through successful completion of relevant actuarial examinations or through6 The actuary may need to meet additional requirements in order to comply with statutory requirements to issue NAIC Statements ofActuarial Opinion as adopted by the NAIC or individual states.
7 The Committee on Qualifications considers specific guidelines in determining when a Specific Qualification Standard should be developed(see appendix 4).

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

11

alternative education. An actuary who has satisfied the basic education requirements for aparticular Specific Qualification Standard is not required to pass additional examinations ormeet additional education requirements that may subsequently be offered by the U.S.-basedorganizations with regard to that Statement of Actuarial Opinion after an actuary has met
the basic education requirements.
3.1.1 Successful Completion of Examinations

3.1.1.1	Statement of Actuarial Opinion, NAIC Life, Accident & Health, and Fraternal
Annual Statement — An actuary should successfully complete relevant
examinations administered by the American Academy of Actuaries or theSociety of Actuaries on the following topics: (a) policy forms and coverages,(b) dividends and reinsurance, (c) investments and valuations of assets andthe relationship between cash flows from assets and related liabilities, (d)statutory insurance accounting, (e) valuation of liabilities, and (f) valuationand nonforfeiture laws.
3.1.1.2	Statement of Actuarial Opinion, NAIC Property and Casualty AnnualStatement — An actuary should successfully complete relevant examinations
administered by the American Academy of Actuaries, the Casualty Actuarial
Society, or the Society of Actuaries on the following topics: (a) policy forms
and coverages, underwriting, and marketing, (b) principles of ratemaking, (c)statutory insurance accounting and expense analysis, (d) premium, loss, andexpense reserves, and (e) reinsurance.
3.1.1.3	Statement of Actuarial Opinion, NAIC Health Annual Statement — An
actuary should successfully complete relevant examinations administered by
the American Academy of Actuaries, the Casualty Actuarial Society or theSociety of Actuaries on the following topics: (a) principles of insurance andunderwriting, (b) principles of ratemaking, (c) statutory insurance accounting
and expense analysis, (d) premium, loss, expense, and contingency reserves,and (e) social insurance.

12

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

3.1.2 Alternative Basic Education — An actuary may also satisfy this basic education

requirement by acquiring comprehensive knowledge of the applicable topics
through responsible work and/or self-study. To comply with the basic education
requirement through self-study, an actuary must obtain a signed statement fromanother actuary who is qualified to issue Statements of Actuarial Opinion under
the specific qualification standard being met. This statement must indicate thatthe writer is familiar with an actuary’s professional history and that an actuary has
obtained sufficient alternative education to satisfy the basic education requirement
for the specific qualification standard. A sample statement appears in appendix 2.
This statement should be obtained before an actuary issues a Statement of Actuarial
Opinion and should be retained by the actuary.

3.2 Experience Requirement
An actuary must obtain at least three years of responsible experience relevant to the subjectof the Statement of Actuarial Opinion under review by an actuary who was qualified toissue the Statement of Actuarial Opinion at the time the review took place under the USQS
in effect at that time. Although this experience need not necessarily be recent, it must be
relevant to the subject of the Statement of Actuarial Opinion.

3.3 Continuing Education Requirement
To satisfy the Specific Qualification Standards, an actuary must obtain sufficient continuing
education to maintain current knowledge of applicable standards and principles in thearea of actuarial practice of the Statement of Actuarial Opinion. At a minimum, an actuarymust complete 15 credit hours per calendar year of continuing education that is directly
relevant to the topics identified in section 3.1.1. A minimum of 6 of the 15 hours must
be obtained through experiences that involve interactions with outside actuaries or otherprofessionals, such as seminars, in-person or online courses, or committee work that is
directly relevant to the topics identified in section 3.1.1. Hours that satisfy the continuing
education requirement of the Specific Qualification Standards may also be used to satisfy
the continuing education requirement of the General Qualification Standard. Hours ofcontinuing education in excess of the annual requirement may be carried forward one year.

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

13

SECTION 4

Changes in Practice and Application
4.1 Changes in Practice Area

Changes in an actuary’s practice may require an actuary to issue Statements of Actuarial
Opinion in an area of actuarial practice or particular subject within an area of actuarial
practice that is new to an actuary. For example, an actuary may move from performing life
reserve valuations to health ratemaking or to issuing health Annual Statement opinions.
4.1.1	General Qualification Standard — If an actuary changes to an area of actuarial

practice or particular subject within an area of actuarial practice where an actuary
issuing the Statement of Actuarial Opinion need satisfy only the General Qualification
Standard, an actuary must comply with the General Qualification Standard by meetingthe applicable basic education and experience requirement and obtaining continuing
education that is relevant to Statements of Actuarial Opinion to be issued in the newarea of actuarial practice or particular subject within an area of actuarial practice.
4.1.2	Specific Qualification Standard — If an actuary changes to an area of actuarial

practice or particular subject within an area of actuarial practice where an actuary
issuing the Statement of Actuarial Opinion must satisfy a Specific Qualification
Standard, that actuary must comply with the Specific Qualification Standard bymeeting the applicable basic education and experience requirement and obtaining
continuing education that is relevant to Statements of Actuarial Opinion to be issued
in the new area of actuarial practice or particular subject within an area of practice.

14

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

4.2 Changes in Application
Changes in the application of actuarial science may develop through revisions to publishedactuarial principles, actuarial standards of practice (ASOPs), and supporting literature. An
actuary practicing in an area of actuarial practice or particular subject within an area of
actuarial practice with a new application of actuarial science must maintain qualification
through appropriate continuing education. If the area of actuarial practice or particularsubject within an area of actuarial practice is new, the actuary must become qualified
by meeting the basic education and experience requirement of the new practice area as
described in section 4.1.

4.3 Emerging or Nontraditional Areas of Actuarial PracticeAs actuaries become engaged in emerging or nontraditional fields, it is likely that theirexpertise will be recognized and that they will be called upon to issue Statements ofActuarial Opinion in those areas.
An actuary practicing in an emerging or nontraditional practice area can satisfy the General
Qualification Standard through continuing education to develop knowledge in the emerging
practice area and by maintaining knowledge of applicable standards of practice, actuarialconcepts, and techniques relevant to the topic of the Statement of Actuarial Opinion.

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

15

SECTION 5

Acknowledgment of Qualification

A Statement of Actuarial Opinion should include an appropriate acknowledgment ofqualification, such as the following:	I, [Name], am [Position] for [Company]. I am a member of the American Academy ofActuaries [or other organization] and I meet the Qualification Standards for Actuaries
Issuing Statements of Actuarial Opinion in the United States of the American Academyof Actuaries to render the actuarial opinion contained herein.
A qualification acknowledgment is not required on preformatted forms, such as Schedule B(Form 5500).
Actuarial Standard of Practice No. 41, Actuarial Communications, provides guidance
when a specific actuarial engagement or assignment requires significant and ongoing
communications between the Principal and actuary. The acknowledgment of qualification
should be included in the cumulative communications with respect to each specificengagement or assignment and is not required in each individual communication. An oral
Statement of Actuarial Opinion is typically part of the cumulative communications andwould not require a separate acknowledgement of qualification.

16

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESSECTION 6

Recordkeeping Requirements

6.1 Continuing Education Recordkeeping Requirements
Actuaries who must satisfy the requirements of the General or Specific Qualification
Standards should keep appropriate timely records as evidence that their continuing
education requirements have been met. Retaining personal notes detailing the content ofreading material would usually be a particularly appropriate way to document continuing
education by means of self-study. A sample recordkeeping format is provided in appendix
5. If an actuary chooses not to use the sample recordkeeping format, such records should
contain information similar to that illustrated in the sample format:a.

the date of the continuing education,b.

the credit hours obtained,c.	a brief description of the subject matter of the continuing education,d.	whether it applies to a Specific Qualifications Standard and, if applicable, which
Specific Qualification Standard,e.

whether it is an organized activity, andf.

whether it counts as professionalism, bias, and/or business skills topics.

These records should be maintained for at least six years beyond the year(s) to which therecords are applicable.

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

17

6.2 Substantiating Compliance
Whenever an actuary issues a Statement of Actuarial Opinion, an actuary should be
prepared to provide evidence of compliance with the USQS, including certificates ofattendance (if any), meeting outlines or handouts, and notes related to “other activities,”when requested by the appropriate counseling and disciplinary body of the profession, in
connection with a disciplinary, counseling, or other proceeding of such body relating to theCode of Professional Conduct. In addition, an actuary should be prepared to provide similar
evidence when a review of compliance with the USQS continuing education requirements isbeing performed by an actuarial organization of which the actuary is a member.

18

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESAppendixes

Appendix 1
Examples of Statements of Actuarial Opinion
This appendix describes Statements of Actuarial Opinion (SAOs) and gives several examplesof opinions that are typically rendered by actuaries, indicating whether or not those
opinions are usually SAOs. The examples set forth in this appendix are not intended to be
all-inclusive. Actuaries can, and do, render many types of SAOs and other statements andopinions that are not specifically referenced in this appendix.
This appendix is intended to help actuaries understand which statements are SAOs. It
represents the consensus of the Academy’s Committee on Qualifications.

I. General Observationsa.	Internal communications within a company, firm, or governmental agency may
or may not be an SAO depending on whether or not the internal communication
expresses an actuarial opinion and whether or not it is intended to be relied upon.
b.	A draft of an actuarial opinion that has not been provided to an actuary’s Principal
who requested the opinion is not an SAO. A draft of an actuarial opinion that has been
provided to an actuary’s Principal who requested the opinion is an SAO unless the
document is clearly marked that it should not be relied upon. If there is a reasonable
likelihood that the Principal will rely on the draft regardless of intent, that is anindication that the draft is an SAO. If the Principal is not subsequently sent a final
report within a reasonable time frame, that is an indication that the draft report is an

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

19

SAO. The actuary should communicate to the Principal that the final report replaces
the draft report. There may be instances where the actuary sends the Principal a draft
report that clearly indicates it should not be relied upon (a document that is not an
SAO according to the above definition) and the actuary and Principal subsequently
agree that a final report will not be issued. In this case, the draft report is not an SAO.
c.	An SAO is usually a written actuarial opinion, but it may also be conveyed by oral
communication. The fact that an actuary’s opinion is conveyed orally is not, in and of
itself, evidence that the opinion is not an SAO.
d.	Not every communication by an actuary is an SAO. The communication must be
based on actuarial considerations.
e.	A statement that contains data and/or other information but does not contain
actuarial advice or an actuarial opinion is not an SAO.
f.

An SAO may or may not be embodied in a public document.

II. Commonly Issued Actuarial Opinions and Work Products
Please observe that only actuarial statements of opinion can be SAOs. This list was prepared
as of the date of adoption of the USQS. It is not intended to be and should not be interpreted
as all-inclusive.

20

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESIs the Actuarial Opinion orCommunication an SAO?

A. These opinions andcommunications are
SAOs.

Area of
Actuarial
Practice

Applicable
Qualification
Standard

1. NAIC Life, Accident & Health, andFraternal Annual Statement Opinion

H/L

Specific

2. NAIC Health Annual Statement Opinion

H

Specific

3. NAIC Property & Casualty AnnualStatement Opinion

C

Specific

4. Form 5500 Schedule SB/MB Certification
and Other ERISA Forms

P

General

5. VEBA Account Limit Determination

H/L/P

GeneralActuarial Opinion/Communication

6. Reserve opinion

C/H/L/P

General7. Profit tests for regulators

C/H/L

General

8. State exam opinion

C/H/L

General

9. Tax issue opinion

C/H/L/P

GeneralL

General

10. Nonforfeiture law compliancedemonstration
11. Indeterminate premiums opinion
12. Rate filing opinion

L

General

C/H/L

GeneralH

General

13. COBRA premium determination
14. Opinion re: rate level indications

C

General15. Cash flow testing

C/H/L/P

General

16. Nonguaranteed elements opinion

C/H/L/P

General

17. Actuarial appraisal

C/H/L/P

General

18. Actuarial audit

C/H/L/P

General19. Opinion of assumptions and methods
used to value social insurance

C/H/L/P

General

20. Supporting reports

C/H/L/P

General

21. Expert testimony

C/H/L/P

General

22. Sales illustrations

H/L

General23. Testimony at rate filing or reserveadequacy hearing

C/H/L

General

24. Loss ratio opinion

H

General

25. Premium increase demonstration

H

General

26. Ratemaking opinion

C

General27. Internal management report (depending
on content and intent)

C/H/L/P

General

28. Asset adequacy analysis

C/H/L/P

General

29. Pricing opinion

L

General

30. Policyholder dividend opinion

L

General

H/L/P

General32. Health & welfare fund financial opinion

H

General33. Determination of maximum deductible
contributions under IRC section 404

P

General31. CCRC pricing opinion

Key: (C) Casualty; (H) Health; (L) Life; (P) Pension; (N/A) Not Applicable

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES21

Is the Actuarial Opinion orCommunication an SAO?

B. These opinions andcommunications
may contain an SAO,
depending on content
and intent.

Actuarial Opinion/Communication

Area of
Actuarial
Practice

Applicable
Qualification
Standard

34. Pension plan non-discrimination testingP

General35. Adjusted Funding Target Attainment
Percentage (AFTAP) certification under
IRC section 436

P

General

36. ASC 712 determination

C/H/L/P

General

37. ASC 715 determination

H/L/P

General

38. ASC 718 determination

P

General

39. ASC 960 determination

P

General

40. ASC 965 retiree obligation opinion

H/P

General41. GASB 67 determination

P

General42. GASB 68 determination

P

General

43. GASB 74 determination

H/P

General44. GASB 75 determination

H/P

General45. CAS 412 determination

P

General46. CAS 413 determination

P

General

47. ASC 450 determination

H/L/P

General48. Draft of an actuarial report provided tothe actuary’s client

C/H/L/P

General

1. Presentation or other written
communication (depends on content)

C/H/L/P

General

2. Internal management report

C/H/L/P

General

3. Sale price of a company opinion

C/H/L/P

General4. Merger/spinoff opinion

C/H/L/P

General5. Profit tests for management

C/H/L/P

General

6. Certification of pension benefit
calculation

P

General

7. Speech

C/H/L/P

General

8. Phone conversation

C/H/L/P

General

9. Certification of data requested by state
insurance departments (not unless there
is an opinion included on an actuarial
subject other than that the data arereliable)

C/H/L/P

General

10. Congressional testimony (almost always
an SAO if an actuary is testifying as anexpert on an actuarial subject)

C/H/L/P

General

11. NAIC working group or task force opinion(usually is, although not everyone whoworks on the opinion must be qualified)

C/H/L/P

General

12. Letters to the editor

C/H/L/P

N/A

13. Interview by media

C/H/L/P

N/A

Key: (C) Casualty; (H) Health; (L) Life; (P) Pension; (N/A) Not Applicable

22

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESIs the Actuarial Opinion orCommunication an SAO?

Actuarial Opinion/Communication

Area of
Actuarial
Practice

Applicable
Qualification
Standard

C. These opinions areusually SAOs because
they are relied on by
third parties.

1. Pension plan costP

General

2. Effect of principal plan changes onpension costP

GeneralD. These communications
are not SAOs whenused alone without an
opinion as to what theresults suggest.

1. Experience study

C/H/L/P

N/A

C/H/L/P

N/A

E. These communications
are not SAOs.

1. Draft of an actuarial report not provided
to the actuary’s client

C/H/L/P

N/A

2. Meeting minutes

C/H/L/P

N/A

2. Personal computer program

Key: (C) Casualty; (H) Health; (L) Life; (P) Pension; (N/A) Not Applicable

III. Application of U.S. Qualification Standards to
Public Service Actuaries
The USQS apply to all actuaries, including those working in public service (for example,
actuaries providing professional services to federal, state, or local governments). When apublic service actuary issues a Statement of Actuarial Opinion, the public service actuary
has the same obligation as a non-public service actuary to comply with the General orSpecific Qualification Standards.
However, a public service actuary may be called upon to review another actuary’s SAO, andto approve, disapprove, accept, or reject a submission based upon another actuary’s SAO.
The review itself may be an SAO, but only if:•

The review itself of an SAO (or a submission based upon and substantially supported by
an SAO) is intended by an actuary to be relied upon by the person or organization towhich it is addressed; and•The review is based on actuarial considerations.

If the above two conditions apply, then an actuary issuing the review must meet the General
Qualification Standard for issuing SAOs in the applicable area of actuarial practice.

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

23

The following is a list of communications that are routinely issued by public service actuaries.
Public service actuaries also author communications that are not specifically referenced inthis listing.
Is the Actuarial Opinion orCommunication an SAO?

A. These opinions andcommunications are not
SAOs.

B. These opinions,communications, andtestimonies are SAOs
if based on actuarialconsiderations.

Traditional
Areas of
Actuarial
Practice

Applicable
Qualification
Standard

1. Rate filing query letter

C/H/L

N/A

2. Answers to consumers’ questions

C/H/L/P

N/A

3. Legislative/rulemaking activities — draft,
review, etc.

C/H/L/P

N/A

4. Reserve adequacy comments within an
insurance department

C/H/L

N/A

5. Review and approve appointed actuary
designations

C/L

N/A

6. Analyze insurance company and industry
data

C/H/L

N/A

7. Actuarial review of NAIC models andpronouncements

C/H/L

N/A

8. Accept/reject company license
applications

C/H/L

N/A

9. Review Asset Valuation Reserve
determinations

C/H/L

N/A

10. Requests for clarification of SAOs
received

C/H/L/P

N/A

1. Issue actuarial opinions re: resolution oftroubled company

C/H/L

General

2. Review reinsurance contracts forcompliance with risk transfer and reserve
credit

C/H/L

General

3. Law and regulation enforcement,interpretation, and implementation

C/H/L/P

General

4. Opinion of state fund’s reserve andfunding level

C/H/L

General

5. Reports called for on governmental
retirement plans

P

General

6. Chief Actuary’s report on Social Security
and Medicare

H/L/P

General

7. Statement of actuarial advisory board
appointed by government, such as theBoard of Actuaries of the Department of
Defense

C/H/L/P

General

8. Actuarial testimony at administrative
hearing

C/H/L/P

General

9. Actuarial testimony at judicial hearing

C/H/L/P

General

10. Actuarial testimony at legislative hearing

C/H/L/P

General

11. Rate filing — written or oral approval/
disapproval

C/H/L

GeneralActuarial Opinion/Communication

Key: (C) Casualty; (H) Health; (L) Life; (P) Pension; (N/A) Not Applicable

24

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESIs the Actuarial Opinion orCommunication an SAO?

Actuarial Opinion/Communication

Traditional
Areas of
Actuarial
Practice

Applicable
Qualification
Standard

12. Reserve adequacy opinion — approval/
disapproval

C/H/L/P

General13. Approve/disapprove actuarial portion ofpolicy forms

C/H/L

General

14. Approve/disapprove actuarial memo on
reserves and nonforfeiture values

C/H/L

General15. Resolve filed audit issues consistent with
ASOPs

C/H/L/P

General16. Review small group annual actuarial
certifications

H

General17. Review actuarial opinion of politicalsubdivision that self-funds its healthinsurance

C/H/L

General

Key: (C) Casualty; (H) Health; (L) Life; (P) Pension; (N/A) Not Applicable

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

25

Appendix 2
Sample Alternative Basic Education Statement(Specific Qualification Standard)8
I have been requested by [ACTUARY’S NAME] to provide a written statement
regarding their knowledge of the topics covered by relevant education, such as
actuarial examinations required by the American Academy of Actuaries’ (Academy)Specific Qualification Standard for_______________________________________________________________________ 9
I meet the Specific Qualification Standard described above, based upon my education,
experience, and continuing education.
It is my opinion that [ACTUARY’S NAME] has gained comprehensive knowledge of thesubjects necessary to meet the basic education requirements of the Academy’s SpecificQualification Standard for [DESCRIPTION OF OPINION] through the following
responsible work [and/or] self-study:[Insert a description of the responsible work and/or self-study undertaken by an actuary tosatisfy the applicable Specific Qualification Standard. Section 3.1.1 provides guidance on theexamination topics at issue.]Based on the foregoing, I believe that [ACTUARY’S NAME] has satisfied the alternativeeducation requirement of the Academy’s Specific Qualification
Standard for [DESCRIPTION OF OPINION] for______________________________________________________________________ 10
In so stating, I take no responsibility for the accuracy, completeness, or quality of any work
undertaken by [ACTUARY’S NAME].
________________________________________________________________________[Signature]							[Date]
8 There is no requirement that this format be used.
9 Insert the applicable area of actuarial practice or the title or description of the particular statement of actuarial opinion to be issued, as
appropriate.
10 I nsert the applicable area of actuarial practice or the title or description of the particular statement of actuarial opinion to be issued, as
appropriate.

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QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESAppendix 3
Procedures for the Adoption of Qualification Standards by theAmerican Academy of Actuaries
The following procedures have been adopted by the American Academy of Actuaries for the
adoption of the U.S. Qualification Standards.

I. Development
The Committee on Qualifications may develop a proposed qualification standard whenever,in the committee’s judgment, development and adoption of the proposed standard would
further the goals and interests of the Academy. Proposed changes or new qualification
standards must be approved by at least a majority vote of a quorum of the Committee on
Qualifications, and must be accompanied by a written report from counsel advising theBoard of Directors (Board) of the draft’s compliance with applicable law and addressing anyother relevant legal issues.

II. Approval to Expose
The proposed standard is presented to the Board with a request that the Board approve its
exposure. The Board may:a. Approve the committee draft for exposure with or without modification;b.	Return the draft with directions for additional work by the Committee on
Qualifications; orc. Terminate work on the proposed standard.
A majority vote of the Board is required to expose a draft, return the draft to the Committee,
or terminate work. Where compelling circumstances require immediate exposure of a
proposed standard, the Executive Committee may act to authorize exposure.

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27

III. Format
The exposure draft of the proposed standard will contain the following information:a. Title page;b. Date of Board approval for exposure;c. Status and history of the draft to date;d. Text of proposed standard;e. Other supporting material, if any;f.	If the exposure draft is not unanimously supported by the Committee on
Qualifications, an appropriate disclosure of minority views, if requested by themembers of the minority;
g. Address to which comments should be submitted;
h. Deadline for submitting comments; andi.	Names of Committee on Qualifications members (without organizational
affiliations).
The Committee on Qualifications may, at its discretion, expose alternative wording forcomment (i.e., two or more versions of certain sections of the exposure draft) in order tosolicit the views of the membership.

IV. Comment Deadline
The deadline for comments is normally 60 days after the expected distribution date, butthat time period may be extended or reduced by the Executive Committee or Board. A
minimum comment period of 30 days is required.

V. Non-Members
The Committee on Qualifications may compile a list of persons and organizations outside
the Academy to whom the exposure draft should be circulated. Copies of the exposure draft
will be made available to any other party upon request.

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QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESVI. Processing
A file of all comments is maintained in the Academy office, and comments are distributed to
the Committee on Qualifications by staff. Committee members must ensure that comments
sent directly to them are forwarded to the Academy office to be processed as describedabove. Only written comments will be processed.

VII. Communication with Commentators
Each individual submitting comments normally will receive an acknowledgment of receipt
from the Academy office. Further communication with commentators is optional at thediscretion of the Committee on Qualifications.

VIII. Status Reports
Status reports on the deliberations of the Committee on Qualifications during the exposure
period are optional at the discretion of the Committee on Qualifications and mandatory
at the request of the Academy President. Status reports will be conveyed to the entire
membership, preferably through the Actuarial Update. Such reports will be general in nature
and will not create the misleading impression that the Committee on Qualifications has
adopted a final position on the proposed standard before fully considering all comments
received.

IX. Committee Deliberations
The Committee on Qualifications will give due and impartial consideration to all comments
received.

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29

X. Public Hearingsa.	Public hearings are not generally required, but may be convened at the discretionof the Committee on Qualifications or by request of the Academy President.
Factors to be considered in deciding whether a public hearing should be held
include:		

1. The complexity of the exposure draft;		

2. The professional significance of the exposure draft; and		

3. Any other relevant considerations.

b.	Expenses directly related to the hearing will be borne by the Academy, including
the cost of a hearing room, recording and transcription services, audio-visualequipment, and production of printed materials. However, those attending andparticipating in the hearing will do so at their own expense.
c.	Notice of the public hearing will be given to the recipients of the exposure draft
through the Actuarial Update or otherwise at least 30 days prior to the hearing.
Notice of the hearing may also be provided in an appropriate fashion throughother media that are believed to reach those persons who might reasonably be
expected to have an interest in the exposure draft. Such notice will include a clear
description of the scope and purpose of the exposure draft, and will set forth thedate, time, and location of the public hearing and the manner in which interested
persons should advise the Committee on Qualifications of their desire to speak at
the hearing.
d.	The hearing is open to all interested parties, including press. Seating may belimited, and will be available on a first-come, first-served basis.

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QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESe.

Eligible Speakers

		

1.	Interested individuals who wish to speak at the public hearing will so advise
the Committee on Qualifications in the manner announced in the hearing
notice. Speakers who have not provided such prior notice will be heard only
after all scheduled speakers and only if time permits.

		

2.	The moderator may establish time limits for all speakers. Time will be madeavailable to non-members as well as members for formal presentations, andfor questions and comments if time permits.

		

3.	A list of speakers and a brief agenda will be compiled and made available atthe hearing.

XI. Second Exposure Draft
In some instances, significant changes to an exposure draft may be required as a result ofcomments received through the exposure process. In that event, at the discretion of theCommittee on Qualifications, a second exposure draft may be circulated for comment or asecond public hearing may be conducted.

XII. Final Approval
A two-thirds majority vote of a quorum of the Committee on Qualifications is required topresent a final standard to the Board for its approval. The Board may approve the standard
for promulgation with or without modification, return the standard with directions for
additional work by the Committee, or terminate work on the standard. A two-thirds
majority vote of the Board is required for approval of a standard. A majority vote of theBoard is required to return the standard to the Committee or terminate work on thestandard.

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31

XIII. Promulgationa.	Academy staff will produce and distribute the final standard to the membershipand other recipients in the next regular monthly Academy mailing following
Board approval, unless a special mailing is approved by the Academy President.
b. Format
		

The final standard will contain the following information:

		

1. Title page;		

2. Effective date;		

3. Text of final standard;		

4. Status and history of the standard;		

5.	An analysis of major comments received, and the extent to which comments
were incorporated in the final standard. Such analysis should preserve theconfidentiality of each commentator’s submission;		

6. Other supporting material, if any;		

7.	If the standard is not unanimously supported by the Committee on
Qualifications, an appropriate disclosure of minority views, if requested by themembers of the minority; and		

8.	Names of Committee on Qualifications members (without organizational
affiliations).

XIV. Documentationa.	All written comments, recordings, transcripts, and other relevant materials
connected with the development of a standard will be available for inspection in
the Academy office during normal business hours for one year following the laterof either the effective date of adoption or the date of the last action taken by theCommittee on Qualifications or the Board on the proposed standard.
b.	Copies of the above materials will be distributed to the Committee on
Qualifications and other Academy officials (for example, the President andother officers) without charge. Members and other individuals may obtain thesematerials upon request for a fee at least equal to the cost of reproduction.

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QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATESXV. Interim Standards
These procedures do not apply when the Academy’s Board of Directors by a two-thirds
majority vote finds that, because of compelling circumstances, good cause exists for aqualification standard to be adopted immediately without implementation of the exposure
draft procedures set forth herein. In that event, the Board may adopt a qualification
standard on an interim basis. Such an interim qualification standard will be circulated tothe membership in the form of an exposure draft as soon as practical, but in any event by
no later than 60 days after the effective date of the interim qualification standard. Aftercompletion of the exposure process, the new qualification standard will be substituted by the
Board for the interim qualification standard.

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Appendix 4
Guidelines for Determining When Specific Qualification Standards
Should Be Developed(Adopted by the Academy’s Board of Directors on September 27, 1994)
The Committee on Qualifications will observe the following guidelines for determining
when to develop Specific Qualification Standards:
1.	The Committee on Qualifications shall consider any request for a Specific Qualification
Standard proposed to it by the Board of Directors, Executive Committee, or any
Practice Council of the Academy. If the Committee on Qualifications concludes thatthe development of a Specific Qualification Standard is not necessary or appropriate inthis instance, it will communicate its reasons for reaching this conclusion to the bodythat made the request.
2.	When a regulator or a quasi-regulatory authority, such as the Financial AccountingStandards Board, represents to the Academy that, if the Academy does not establish
a particular Specific Qualification Standard, it will provide the guidance it believes
is needed in terms of something close to a Specific Qualification Standard, a SpecificQualification Standard will be considered for development.
3.	A Specific Qualification Standard typically should be developed in relation to a specificactuarial opinion requirement that is embodied in a regulation or a standard and is ofhigh visibility and fairly broad application within the profession.
4.	A Specific Qualification Standard should apply to an area of expertise that is broad
enough to cover a substantial portion of actuarial practice. The area should have been
in existence long enough to have given rise to an established body of knowledge sothat actuaries could be qualified to work in the area through past experience. The area
should be broad enough so that a significant number of members will qualify and not
be so limiting as to remove opportunities for job and expertise movement by almost allother actuaries.

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QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES5.	It should be possible for a Specific Qualification Standard to set forth a reasonably
available means to meet both the Basic Education Requirements for the area ofexpertise, either through Specific Supplemental Examination Topics or through aSpecific Alternative Education Provision, and the 15 hours per year of Continuing
Education Requirements.
6.	Before proposing a Specific Qualification Standard, the Committee on Qualifications
shall seek comments from the applicable Practice Councils of the Academy as to theutility and contents of such Standard.
7.	If any Practice Council of the Academy opposes a proposed Specific Qualification
Standard that affects its area of actuarial practice, a summary of the reasons for that
Practice Council’s opposition shall be included along with the proposed SpecificQualification Standard when it is presented to the Academy Board.

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36

QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES

Date

Sponsor or Activity

No. ofhours
Subject

and a maximum of 3 hours of business skills topics.

Area ofactuarial
practice

Specific
Qualification
Standard

Continuing Education Hours
Organized
Professionalism
Activity
Y/N
Y/N

Bias
TopicsY/NBusiness
Skills Y/N

Total hours must include at least 6 hours of organized activities, at least 1 hour of bias topics, at least 3 hours of professionalism,

Notes: An hour equals 50 minutes.

for six years.

area of actuarial practice. Record the number of hours earned in as many columns as apply. This information should be retained

Qualification Standard requirements. Please note that, under the General Qualification Standard, hours should be recorded byThis format may be used to record earned credit hours for each Specific Qualification Standard requirement and/or General

Sample Continuing Education Recordkeeping Format

Appendix 5

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QUALIFICATION STANDARDS FOR ACTUARIES ISSUING STATEMENTS OF ACTUARIAL OPINION IN THE UNITED STATES