If the actuary is replaced, which actions must the insurer take?

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Multiple Choice

If the actuary is replaced, which actions must the insurer take?

When an insurer replaces its actuary, regulators require timely, thorough communication to surface any issues that could affect reserves, pricing, or governance. The insurer must inform the Insurance department within five days of the replacement. Within ten days, it should send a letter to the Commissioner detailing whether there were any disagreements with the prior actuary in the previous 24 months related to the risk of material adverse deviation, as well as any required disclosures, scopes, procedures, or data quality concerns. Crucially, the insurer must request in writing from the former actuary whether they agree with the statements in that letter, and that letter from the former actuary should be forwarded to the Commissioner together with the insurer's letter. This sequence ensures the regulator has a complete and independent view of potential risks and the quality of the actuarial work during the transition, promoting transparency and ongoing oversight. Relying only on a simple notification, or delaying or omitting the former actuary’s input, would leave critical risk signals and governance issues inadequately documented for regulatory review.

When an insurer replaces its actuary, regulators require timely, thorough communication to surface any issues that could affect reserves, pricing, or governance. The insurer must inform the Insurance department within five days of the replacement. Within ten days, it should send a letter to the Commissioner detailing whether there were any disagreements with the prior actuary in the previous 24 months related to the risk of material adverse deviation, as well as any required disclosures, scopes, procedures, or data quality concerns. Crucially, the insurer must request in writing from the former actuary whether they agree with the statements in that letter, and that letter from the former actuary should be forwarded to the Commissioner together with the insurer's letter. This sequence ensures the regulator has a complete and independent view of potential risks and the quality of the actuarial work during the transition, promoting transparency and ongoing oversight. Relying only on a simple notification, or delaying or omitting the former actuary’s input, would leave critical risk signals and governance issues inadequately documented for regulatory review.

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