2. 15 $1 Million
14 $500,000
13 $250,000
12 $100,000
11 $50,000
10 $25,000
9 $16,000
8 $8,000
7 $4,000
6 $2,000
5 $1,000
4 $500
3 $300
2 $200
1 $100

3. Which of the following is NOT specifically identified as an Actuarial Communication in ASOP 41?
Written
Sign Language A. B.
Oral
Electronic C. D.

4. According to ASOP 30 - Treatment of Profit and Contingency Provisions and the Cost of Capital in Property/Casualty Insurance Ratemaking, Cost of Capital can be expressed as a percentage of the following, EXCEPT:
Capital
Assets A. B.
Premium
An Inappropriate Base C. D.

5. According to Precept 1 of the Code of Conduct an actuary shall act honestly, with integrity and _[what]___?
Capability
Consistency A. B.
Competence
Eagerness C. D.

6. According to Precept 7 of the Code of Professional Conduct, an Actuary shall not knowingly perform Actuarial Services involving an actual or apparent conflict of interest unless:
The Actuary’s ability to
act fairly is unimpaired
There has been disclosure of the
conflict to all affected principals A. B.
All relevant Principals have expressly
agreed to the performance of the
Actuarial Services by the Actuary
All three of the conditions
in A, B, and C are met C. D.

7. ASOP 1 explains the organization of the ASOPs
ASOP 1 explains the organization of the ASOPs. Which of these items would be found in Section 2?
Definitions of terms
Scope A. B.
Analysis of issues
Recommended
Practices C. D.

8. ASOP 23, Data Quality, is intended to give guidance in all of the following areas EXCEPT…
Relying on data
supplied by others
Signing an Actuarial
Opinion A. B.
Reviewing Data
Using Data C. D.

9. Policyholder dividends
According to ASOP 30- Treatment of Profit and Contingency Provisions and the Cost of Capital in Property/Casualty Insurance Ratemaking, “Underwriting Expenses” include the following, EXCEPT:
Commissions
Other acquisition
expenses A. B.
Policyholder dividends
Brokerage expenses C. D.

10. When should the actuary issue a qualified statement of actuarial opinion?
When the actuary is unable
to issue an opinion on the
reserves for certain items
When the actuary cannot
determine a reasonable provision
for certain immaterial items A. B.
When the actuary meets the
qualification standards
of the CAS
When the actuary meets the
qualification standards
of the AAA C. D.

11. According to Precept 3 of the Code of Professional Conduct, an Actuary shall ensure that Actuarial Services performed by or under the direction of the Actuary satisfy which of the following?
All Applicable Laws
Applicable Financial
Accounting Standards A. B.
Applicable Standards
of Practice
Professional
Judgment C. D.

12. According to ASOP 38, when selecting or using a catastrophe model, the actuary should do each of the following EXCEPT:
Determine the appropriate
use of model results.
Determine that appropriate
validation has occurred. A. B.
Be an expert on the
use of the model.
Evaluate whether model is
appropriate for objective. C. D.

13. objectively determined
Which of the following is FALSE: When designing a risk classification system, the actuary should select risk characteristics that:
have a cause and
effect relationship
are practical A. B.
are capable of being
objectively determined
are related to
expected outcomes C. D.

14. According to ASOP 29: Expense Provisions in Property/Casualty Insurance Ratemaking, expense provisions should reflect the conditions present for which the following:
At the filing effective date
When the policies are
Expected to be in effect A. B.
During the experience period
For the current period C. D.

15. Fill in the Blank: Precept 13 of the CAS Code of Professional Conduct says, an actuary with knowledge of an apparent, unresolved, material violation of the Code by another Actuary ________ the situation with the other Actuary and attempt to resolve the apparent violation.
Must Discuss
Shall Discuss A. B.
Might Consider
Discussing
Should Consider
Discussing C. D.

16. According to ASOP 36: Statements of Actuarial Opinion, the actuary should identify the stated basis of reserve presentation usually found in the financial statement. It does NOT include which of the following:
Whether the reserves
are stated to include an
implicit risk margin.
Whether the reserves
are gross or net of
specified recoverables. A. B.
Whether the reserves are
nominal or discounted
for the time value of money.
The types of unpaid LAE
covered by the reserve. C. D.

17. When selecting data for analysis, which of the following considerations is NOT mentioned in ASOP 23, Data Quality?
Material limitations
of the data
Whether the data are
sufficiently current A. B.
Cost of obtaining
alternative data
Auditability of the
data C. D.

18. Instructions & answer slides follow
End of Game
Instructions & answer slides follow

19. Which of the following is NOT specifically identified as an Actuarial Communication in ASOP 41?
Written
Sign Language A. B.
Oral
Electronic C. D.

20. According to ASOP 30 - Treatment of Profit and Contingency Provisions and the Cost of Capital in Property/Casualty Insurance Ratemaking, Cost of Capital can be expressed as a percentage of the following, EXCEPT:
Capital
Assets A. B.
Premium
An Inappropriate Base C. D.

21. According to Precept 1 of the Code of Conduct an actuary shall act honestly, with integrity and _[what]___?
Capability
Consistency A. B.
Competence
Eagerness C. D.

22. According to Precept 7 of the Code of Professional Conduct, an Actuary shall not knowingly perform Actuarial Services involving an actual or apparent conflict of interest unless:
The Actuary’s ability to
act fairly is unimpaired
There has been disclosure of the
conflict to all affected principals A. B.
All relevant Principals have expressly
agreed to the performance of the
Actuarial Services by the Actuary
All three of the conditions
in A, B, and C are met C. D.

23. ASOP 1 explains the organization of the ASOPs
ASOP 1 explains the organization of the ASOPs. Which of these items would be found in Section 2?
Definitions of terms
Scope A. B.
Analysis of issues
Recommended
Practices C. D.

24. ASOP 23, Data Quality, is intended to give guidance in all of the following areas EXCEPT…
Relying on data
supplied by others
Signing an Actuarial
Opinion A. B.
Reviewing Data
Using Data C. D.

25. Policyholder dividends
According to ASOP 30- Treatment of Profit and Contingency Provisions and the Cost of Capital in Property/Casualty Insurance Ratemaking, “Underwriting Expenses” include the following, EXCEPT :
Commissions
Other acquisition
expenses A. B.
Policyholder dividends
Brokerage expenses C. D.

26. When should the actuary issue a qualified statement of actuarial opinion?
When the actuary is unable
to issue an opinion on the
reserves for certain items
When the actuary cannot
determine a reasonable provision
for certain immaterial items A. B.
When the actuary meets the
qualification standards
of the CAS
When the actuary meets the
qualification standards
of the AAA C. D.

27. According to Precept 3 of the Code of Professional Conduct, an Actuary shall ensure that Actuarial Services performed by or under the direction of the Actuary satisfy which of the following?
All Applicable Laws
Applicable Financial
Accounting Standards A. B.
Applicable Standards
of Practice
Professional
Judgment C. D.

28. According to ASOP 38, when selecting or using a catastrophe model, the actuary should do each of the following EXCEPT:
Determine the appropriate
use of model results.
Determine that appropriate
validation has occurred. A. B.
Be an expert on the
use of the model.
Evaluate whether model is
appropriate for project objective. C. D.

29. objectively determined
Which of the following is FALSE: When designing a risk classification system, the actuary should select risk characteristics that:
have a cause and
effect relationship
are practical A. B.
are capable of being
objectively determined
are related to
expected outcomes C. D.

30. According to ASOP 29: Expense Provisions in Property/Casualty Insurance Ratemaking, expense provisions should reflect the conditions present for which the following:
Scientists use the unit “becquerel” to measure the number of radioactive decays of radon atoms. One becquerel equals one disintegration per second. The higher the number of becquerels, the higher the levels of radon gas in the air.
At the filing effective date
When the policies are
Expected to be in effect A. B.
During the experience period
For the current period C. D.

31. Fill in the Blank: Precept 13 of the CAS Code of Professional Conduct says, an actuary with knowledge of an apparent, unresolved, material violation of the Code by another Actuary ________ the situation with the other Actuary and attempt to resolve the apparent violation.
Must Discuss
Shall Discuss A. B.
Might Consider
Discussing
Should Consider
Discussing C. D.

32. According to ASOP 36: Statements of Actuarial Opinion, the actuary should identify the stated basis of reserve presentation usually found in the financial statement. It does NOT include which of the following:
Whether the reserves
are stated to include an
implicit risk margin.
Whether the reserves
are gross or net of
specified recoverables. A. B.
Whether the reserves are
nominal or discounted
for the time value of money.
The types of unpaid LAE
covered by the reserve. C. D.

33. When selecting data for analysis, which of the following considerations is NOT mentioned in ASOP 23, Data Quality?
Material limitations
of the data
Whether the data are
sufficiently current A. B.
Cost of obtaining
alternative data
Auditability of the
data C. D.

34. 50-50 Lifeline Slides

35. Which of the following is NOT specifically identified as an Actuarial Communication in ASOP 41?
Written
Sign Language A. B. C. D.

36. According to ASOP 30 - Treatment of Profit and Contingency Provisions and the Cost of Capital in Property/Casualty Insurance Ratemaking, Cost of Capital can be expressed as a percentage of the following, EXCEPT: A. B.
Premium
An Inappropriate Base C. D.

37. According to Precept 1 of the Code of Conduct an actuary shall act honestly, with integrity and _[what]___? A. B.
Competence
Eagerness C. D.

38. According to Precept 7 of the Code of Professional Conduct, an Actuary shall not knowingly perform Actuarial Services involving an actual or apparent conflict of interest unless:
The Actuary’s ability to
act fairly is unimpaired A. B.
All three of the conditions
in A, B, and C are met C. D.

39. ASOP 1 explains the organization of the ASOPs
ASOP 1 explains the organization of the ASOPs. Which of these items would be found in Section 2?
Definitions of terms A. B.
Recommended
Practices C. D.

40. ASOP 23, Data Quality, is intended to give guidance in all of the following areas EXCEPT…
Signing an Actuarial
Opinion A. B.
Reviewing Data C. D.

41. Policyholder dividends
According to ASOP 30- Treatment of Profit and Contingency Provisions and the Cost of Capital in Property/Casualty Insurance Ratemaking, “Underwriting Expenses” include the following, EXCEPT :
Commissions A. B.
Policyholder dividends C. D.

42. When should the actuary issue a qualified statement of actuarial opinion?
When the actuary is unable
to issue an opinion on the
reserves for certain items A. B.
When the actuary meets the
qualification standards
of the CAS C. D.

43. According to Precept 3 of the Code of Professional Conduct, an Actuary shall ensure that Actuarial Services performed by or under the direction of the Actuary satisfy which of the following? A. B.
Applicable Standards
of Practice
Professional
Judgment C. D.

44. Determine that appropriate validation has occurred.
According to ASOP 38, when selecting or using a catastrophe model, the actuary should do each of the following EXCEPT:
Determine that appropriate
validation has occurred. A. B.
Be an expert on the
use of the model. C. D.

45. Which of the following is FALSE: When designing a risk classification system, the actuary should select risk characteristics that:
have a cause and
effect relationship
are practical A. B. C. D.

46. When the policies are expected
According to ASOP 29: Expense Provisions in Property/Casualty Insurance Ratemaking, expense provisions should reflect the conditions present for which the following:
When the policies are expected
to be in effect A. B.
For the current period C. D.

47. Fill in the Blank: Precept 13 of the CAS Code of Professional Conduct says, an actuary with knowledge of an apparent, unresolved, material violation of the Code by another Actuary ________ the situation with the other Actuary and attempt to resolve the apparent violation.
Must Discuss A. B.
Should Consider
Discussing C. D.

48. are stated to include an
According to ASOP 36: Statements of Actuarial Opinion, the actuary should identify the stated basis of reserve presentation usually found in the financial statement. It does NOT include which of the following:
Whether the reserves
are stated to include an
implicit risk margin. A. B.
The types of unpaid LAE
covered by the reserve. C. D.

49. When selecting data for analysis, which of the following considerations is NOT mentioned in ASOP 23, Data Quality? A. B.
Cost of obtaining
alternative data
Auditability of the
data C. D.

50. $100
Radon Reduction Level

51. $200
Radon Reduction Level

52. $300
Radon Reduction Level

53. $500
Radon Reduction Level

54. $1,000
Radon Reduction Level

55. $2,000
Radon Reduction Level

56. $4,000
Radon Reduction Level

57. $8,000
Radon Reduction Level

58. $16,000
Radon Reduction Level

59. $25,000
Radon Reduction Level

60. $50,000
Radon Reduction Level

61. $100,000
Radon Reduction Level

62. $250,000
Radon Reduction Level

63. $500,000
Radon Reduction Level

64. $1 Million
Radon Reduction Level

65. 1 29 2 28 3 27 4 26 5 25 7 8 6 9 10 11 12 15 21 20 22 23 24 19 18 14 13 16 17 30

66. Professional Guidance
ASOP 41 Actuarial Communications
All types of Actuarial work – not just P&C
Written, Electronic, or Oral Communications
Provides guidance for the appropriate form and content that should be included - depending on circumstances and audience
Discusses timelines and reliance on others
It covers communication by an Actuary to a Principal
The standard does not define “actuary”, which is defined by the code.
But, it does provide definitions for
“principal”
“intended user”
and “actuarial services”,
The standard provides additional guidance for specific types of actuarial communications, including actuarial reports, oral communications, and findings that the actuary considers “significant”.
It specifically indicates that oral communication should not conflict with written or electronic communications.
It is worth noting that although an individual communication may not completely satisfy the standard that the cumulative communications, taken together will satisfy the standard.
It is also worth noting that internal communications are excluded, unless they are specifically designated as an actuarial communication.
Note that ASOP 41 is currently being revised to – according to the ASB – “bring the document up to date with current practice.”
I would venture to guess that part of reason that #41 is being revised is to allow for the repeal of #9.

67. Professional Guidance
Treatment of Profit and Contingency Provisions and the Cost of Capital in Property/Casualty Insurance Ratemaking
3.8 Use of Different Bases
The cost of capital can be expressed as a percentage of capital, a percentage of assets, a percentage of premium, or other appropriate base.
The actuary may choose any such appropriate base.
Actuaries may use different bases, which can be converted from one to another.
Regardless of which base is used to reflect the cost of capital, the actuary should clearly identify the base used and should document the relevant assumptions.
Little bit of a give it away answer, but still an important topic to consider.
Cost of Capital—The rate of return that capital could be expected to earn in alternative
investments of equivalent risk; also known as opportunity cost.
May see the cost of capital be a percentage of assets, then be converted to premiums for ratemaking.

68. Professional Guidance
Precept 1 of the Code of Conduct: An Actuary shall act honestly, with integrity and competence, and in a manner to fulfill the profession's responsibility to the public and to uphold the reputation of the actuarial profession.
Annotation An Actuary shall perform Actuarial Services with skill and care.
Upholding the reputation of the actuarial profession is a daunting task, but this ASOP makes us all play by the rules!

69. Professional Guidance
Code of Conduct Precept 7
An Actuary shall not knowingly perform Actuarial Services involving an actual or potential conflict of interest.
the Actuary’s ability to act fairly is unimpaired;
there has been disclosure of the conflict to all present and known prospective Principals whose interests would be affected by the conflict; and
all such Principals have expressly agreed to the performance of the Actuarial Services by the Actuary.
This precept is not too surprising and is referenced in other ASOPs. The key here is that you can still deal with a conflict of interest if you disclose it to the parties involved. I find that documentation and disclosure are keys when dealing with professionalism documents.

70. Professional Guidance
ASOP 1: INTRODUCTORY ACTUARIAL STANDARD OF PRACTICE
This Introductory ASOP sets forth principles that have been broadly applicable to the work of the ASB since its inception, and carries the same weight and authority as other ASOPs.
Section 1. Overview
Section 2. Definitions, Discussions, and Related Guidance
Each ASOP includes a list of definitions of certain terms used within it.
Those terms are defined only for use in that particular ASOP, and the definitions can and do differ among ASOPs.
Definitions and discussions included in this Introductory ASOP are intended to apply to ALL other ASOPs if the term is used in such ASOPs, unless the ASOP includes a specific definition of the term.
Section 3. Purpose and Format of Actuarial Standards of Practice
Section 4. Compliance with ASOPs
Each ASOP includes a list of definitions of certain terms used within it. With the exception of this Introductory ASOP, those terms are defined only for use in that particular ASOP, and the definitions can and do differ among ASOPs, reflecting different uses of language in various segments of the profession. Definitions and discussions included in this Introductory ASOP are intended to apply to all other ASOPs if the term is used in such ASOPs, unless the ASOP includes a specific definition of the term.

71. Professional Guidance: ASOP#23: Data Quality
Guidance for the following
Selecting data that underlie the work product
Relying on data supplied by others
Reviewing data
Using data
Making appropriate disclosures regarding data quality
All practice areas – not just P&C
Does not require data audit
Since very little actuarial work doesn’t rely on data, ASOP 23 on data quality, is one in which we should all be very familiar.
It provides guidance for selecting, reviewing and using data.
Does NOT require you to:
Determine whether data has been falsified
Or compile the data differently to search for questionable or inconsistent amounts
Nor does it require you to audit the data
It does indicate that you may use actuarial judgment to choose not to review the data, such as when auditing has already been done. That, however, must be disclosed.
As I already mentioned, this ASOP is referenced in many of the others. But, the others may contain additional considerations that are applicable to that particular area of practice or type of actuarial assignment.
The ASOP states that an actuary should decline a project if the data is determined to be sufficiently inadequate.
I am going to mention here the requirements regarding any conflict with law. Many of the ASOPs, including “Data Quality”, provide guidance for situations in which the ASOP conflicts with requirements imposed by law.
The “Data Quality” ASOP suggests that you should make every effort to comply with both, but where a conflict exists, you should comply with the law. It goes on to say that this would not be considered a deviation from the standard, but it should be disclosed.
Although you should read the specific wording provided in each ASOP, this guidance is generally consistent in the other ASOPs, so I won’t mention it with each one.

72. Professional Guidance
ASOP 30 Treatment of Profit and Contingency
2.13 Underwriting expenses - All expenses except losses, loss adjustment expenses, investment expenses, policyholder dividends, and income taxes.
2.14 Underwriting profit - Premiums less losses, loss adjustment expenses, underwriting expenses, and policyholder dividends.
2.15 Underwriting profit provision - The provision for underwriting profit in the actuarially developed rate, typically expressed as a percentage of the rate.
2.10 Operating profit - The sum of underwriting profit, miscellaneous (non-investment) income from insurance operations, and investment income from insurance operations. Associated income taxes are recognized when the analysis is on a post-tax basis.
Similar disclosures are required for other items in addition to trend, including Profit and Contingency as shown in ASOP 30.

73. Professional Guidance
ASOP 36 –Statements of Actuarial Opinion
The SAO should be one of the following types:
a. Determination of Reasonable Provision - when the reserve is found to be reasonable.
b. Determination of Deficient or Inadequate Provision - when the reserve amount is less than the minimum amount that the actuary believes is reasonable
c. Determination of Redundant or Excessive Provision - when the reserve amount is greater than the maximum amount that the actuary believes is reasonable.
d. Qualified Opinion – when the reserves for a certain item or items within the scope of the opinion are in question
Does not have to be qualified if actuary reasonably believes the item or items in question are not likely to be material.
e. No Opinion – when the actuary cannot reach a conclusion due to deficiencies or limitations in the data, analyses, assumptions, or related information
d. Qualified Opinion—The actuary should issue a qualified statement of actuarial opinion when, in the actuary’s opinion, the reserves for a certain item or items within the scope of the opinion are in question because they cannot be reasonably estimated or the actuary is unable to issue an opinion on the reserves for those items. The actuary should determine whether the reserve amount makes a reasonable provision for the liabilities associated with the specified reserves, except for the item or items to which the qualification relates. (See section 4.2(d) for related disclosure requirements.) The actuary is not required to issue a qualified opinion if the actuary reasonably believes that the item or items in question are not likely to be material.
The actuary should always be “qualified” to issue a SAO and should make sure they reveal their identity and the extent to which they are available to answer questions about the analysis (ASOP 41.)

74. Professional Guidance
Precept 3 of the Code of Conduct: “An Actuary shall ensure that Actuarial Services performed by or under the direction of the Actuary satisfy applicable standards of practice”
Precept 3 deals with practice standards of standards of practice.
This precept REQUIRES you to know about the applicable standards and that your work is in compliance with them. 74

75. Professional Guidance
ASOP 38 – Using Models Outside the Actuary’s Area of Expertise
In performing actuarial services, an actuary may find it appropriate to select and use catastrophe models. When selecting or using such a model, the actuary should:
determine the appropriate level of reliance on experts;
have a basic understanding of the catastrophe model;
evaluate whether the catastrophe model is appropriate for the project’s objective;
determine that appropriate validation has occurred; and
determine the appropriate use of the catastrophe model and its results.

76. Professional Guidance
ASOP 12: Risk Classification
2.6 Practical⎯Realistic in approach, given the purpose, nature, and scope of the assignment and any constraints, including cost and time considerations.

77. Professional Guidance
ASOP 12: Risk Classification Considerations
3.2.1 Relationship of Risk Characteristics and Expected Outcomes
3.2.2 Causality
While the actuary should select risk characteristics that are related to expected outcomes, it is not necessary for the actuary to establish a cause and effect relationship between the risk characteristic and expected outcome in order to use a specific risk characteristic.
Risk characteristics are
important structural components of a risk classification system. When selecting which
risk characteristics to use in a risk classification system, the actuary should consider the following…

78. Professional Guidance
ASOP 12: Risk Classification Considerations
3.2.3 Objectivity
The actuary should select risk characteristics that are capable of being objectively determined. A risk characteristic is objectively determinable if it is based on readily verifiable observable facts that cannot be easily manipulated.
3.2.4 Practicality
The actuary’s selection of a risk characteristic should reflect the tradeoffs between practical and other relevant considerations.
Also includes applicable law, Industry Practices, and Business Practices.

79. Professional Guidance
ASOP 29: Expense Provisions in Property/Casualty Insurance Ratemaking
Section 3.2: Expense provisions should reflect the conditions expected during the time these policies or coverages are expected to be in effect and should include all expenses expected to be incurred in connection with the transfer of risk.

80. Professional Guidance
PRECEPT 13. An Actuary with knowledge of an apparent, unresolved, material violation of the Code by another Actuary should consider discussing with the other Actuary. If not attempted or not successful, the Actuary shall disclose such violation to the ABCD (unless contrary to Law or would divulge Confidential Information.)
ANNOTATION A violation of the Code is deemed to be material if it is important or affects the outcome of a situation.
More to come on this Precept…don’t give away the next answer!

81. Professional Guidance
ASOP 36 Statements of Actuarial Opinion
3.4 Stated Basis of Reserve Presentation—The stated basis often depends upon regulatory or accounting requirements.
a. nominal or discounted
b. include an explicit risk margin
c. gross or net of specified recoverables
d. if potential for uncollectible recoverables is considered
e. the types of unpaid loss adjustment expenses covered
f. when the opinion is only for a portion of a reserve, the claims exposure to be covered by the opinion
g. any other items that, in the actuary’s professional judgment, are needed to describe the reserves
Definition 2.4 Explicit Risk Margin—An explicit provision for uncertainty in a reserve or unpaid claim estimate.
The actuary should identify whether the reserves are stated to include an explicit risk margin and, if so, the stated basis for the explicit risk margin (for example, stated percentile of distribution, or stated percentage load above expected)

82. Professional Guidance: ASOP#23: Data Quality
Select the data with due consideration of the following:
1. appropriateness for the intended purpose of the analysis, including whether the data are sufficiently current;
2. reasonableness and comprehensiveness of the necessary data elements, with particular attention to internal and external consistency;
3. any known, material limitations of the data;
4. the cost and feasibility of obtaining alternative data, including the ability to obtain the information in a reasonable time frame;
5. the benefit to be gained from an alternative data set or data source as balanced against its availability and the time and cost to collect and compile it; and
6. sampling methods, if used to collect the data.

83. “Who Wants To Be A Millionaire” Powerpoint (Advanced) Template
Designed and Created by
Jeff White
Copyright © 2000
Version Last updated 20 June, 2001
The graphics and sounds used in this template are recorded from the television show “Who Wants To Be A Millionaire,” and were obtained from both the
ABC “WWTBAM” website and the
ITV “WWTBAM” website.
ABC is the American Broadcasting Corporation;
ITV is the Channel 3 (UK) broadcasting company.
Visit for updated versions!