1. Statement of Actuarial Opinion Changes for 2007 Casualty Loss Reserve Seminar September 2007 By: Joseph A. Herbers Pinnacle Actuarial Resources, Inc.

2. 1 OUTLINE OF PRESENTATION Background on Herbers History Lesson Changes for 2007 Other Changes Peculiar Issues Q&A

3. 2 Background on Herbers COPLFR Member since 1998 Faculty for AAA Seminar on Effective P/C Loss Reserve Opinions Practice Note Subcommittee Appointed Actuary for 24 domestic P/C companies / RRG’s in 2007 Loss Reserve Specialist / AA for dozens of captives CAS paper on Materiality and SAOs (2004)

4. 3 History

5. 4 History (cont.)

6. 5

7. 6

8. 7

9. 8

10. 9

11. 10 History (cont.) 2006 Title Opinion Instructions Clarification that AOS is a separate document from SAO New CATF Guidance on Risk Transfer, Prepaid LAE

12. 11 Changes for 2007 New Requirement that Exh A & Exh B be submitted electronically New Instruction that items in Exh B be net unless otherwise indicated New Disclosures in Exh B Name of Appointed Actuary (AA) Relationship of AA to Company Credentials of AA Specific Citation of Type of SAO (of 5 types) Declaration (yes/no) of whether RMAD exists New CATF Guidance

13. 12

14. 13 Exh B: Disclosures (cont.) Items 11-13 unchanged

15. 14 Other Changes for 2007 AAA Qualifications Standards ASOP 43 Note conflict with current ASOP 9, Section 5.2 regarding need to “describe the impact of changes” when material change made to methods and/or assumptions

16. 15 Peculiar Issues CA WC Schedule P (2004) Colorado (2006) RRG in District of Columbia Bermuda, Captives, Self-Insured Groups - when to follow NAIC format? What’s coming next?

17. Q & A