TIA Section D - SAO

Question 1

Answer 1

Question 2

Answer 2

Question 3

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Question 4

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Question 5

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Question 6

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Question 7

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Question 8

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Question 9

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Question 10

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Question 11

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Question 12

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Question 13

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Question 14

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Question 15

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Question 16

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Question 17

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Question 18

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Question 19

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Question 20

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Question 21

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Question 22

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Question 23

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Question 24

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Question 25

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Question 26

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Question 27

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Question 28

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Question 29

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Question 30

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Question 31

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Question 32

Answer 32

Question 33

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Question 34

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Question 35

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Question 36

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Question 37

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Question 38

Answer 38

Question 39

SAO Example Data Source paragraph

Answer 39

In forming my opinion on the loss and loss adjustment expense reserves, I relied upon data prepared by (name, affiliation and relation to company). I evaluated that data for reasonableness and consistency. I also reconciled that data to Schedule P, Part 1 of the company’s current Annual Statement. In other respects, my examination included such review of the actuarial assumptions and methods used and such tests of the calculations as I considered necessary.

Question 40

SAO
Stated Basis of Reserves:
-Things to include

Answer 40

Are the Reserves:
* Discounted?
* Include a specific risk margin?
* Gross or net of recoverables?
* Accounting for potentially uncollectible receivables?
* Any unpaid LAE included in reserves?
* If opinion is only for portion of reserve, categories of loss that are incorporated by opinion.

Question 41

SAO Sample Opinion Wording
-Reasonable

Answer 41

In my opinion, the amounts carried in Exhibit A on account of the items identified:
A. Meet the requirements of the insurance laws of X (state of Domicile).
B. Are computed in accordance with accepted actuarial standards and principles.
C. Make a reasonable provision for all unpaid loss and loss adjustment expense obligations of the Company under the terms of its contracts and agreements.

Question 42

SAO Sample Opinion Wording
-Deficient
-Redundant

Answer 42

C. Make an inadequate [or excessive] provision for the unpaid loss and loss adjustment expense obligations of the Company under the terms of its contracts and agreements. The provision for unpaid losses and loss adjustment expenses is $X less [greater] than the minimum [maximum] amount I consider necessary to be within the range of reasonable estimates.

Question 43

SAO Sample Opinion Wording
-Qualified

Answer 43

In my opinion, with the qualification that it does not include the [the items to which the qualification relates] the amounts carried in Exhibit A on account of the items identified:
A. Meet the requirements of the insurance laws of X (state of Domicile).
B. Are computed in accordance with accepted actuarial standards and principles.
C. Make a reasonable provision for all unpaid loss and loss adjustment expense obligations of the Company under the terms of its contracts and agreements.
The Company’s management has informed me that the reserves listed in Exhibit A include $X(x%) on a Y basis, for [the items to which the qualification relates]. I did not include in my review an evaluation of the reserves relating to [the items to which the qualification relates] because there was not sufficient information available for me to assess the reasonableness of those reserves. Thus, this is a qualified statement of actuarial opinion.