Surveys Focus On Actuarial Review

The NAIC survey found that state regulators like the idea of having an actuarial review board established with the consent of a commissioner, having a reviewer engaged by a domiciliary commissioner or having peer review provided by an independent audit committee, according to Dennis Lauzon, a New York regulator who is spearheading the NAIC actuarial review survey work.

Having peer review required by a firm’s auditing statements, having peer review performed by a regulatory staff in a domiciliary state; and not requiring peer review at all were much less popular alternatives, Lauzon says.

When asked about how states would set up a peer review system, 7 states said that a change in the law would be necessary, 3 states said that the change could be accomplished by regulation and 1 state said that the system could be changed through an actuarial guideline.

But the importance of peer review in the process of reserve valuation and RBC valuation was raised by almost all states. In the case of reserve valuation, 8 states cited it as “very important” and 2 states as “important,” while 8 states called RBC valuation “very important” and 2 states called it “important.”