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Recent Academy Activity, July 20-24, 2015

Academy Releases Issue Brief on Medicare’s Financial Condition

The Academy’s Medicare Subcommittee released an issue brief following the release of the annual Medicare Trustees Report on July 22. The issue brief, Medicare’s Financial Condition: Beyond Actuarial Balance, notes that the projected financial condition of Medicare has improved in the short-term for the Federal Hospital Insurance trust fund (Medicare Part A) but has deteriorated somewhat for the Supplementary Medical Insurance trust fund.

The subcommittee agrees with the trustees that the Medicare program continues to face serious financing problems. Because Medicare plays a critically important role in ensuring that Americans age 65 and older and certain younger adults with permanent disabilities have access to health care, it urges action to restore the program’s long-term solvency and financial sustainability.

Professionalism Webinar Draws Large Audience to Hear Debate on Actuarial Modeling Standard

The Academy’s July 22 webinar, “The Great Modeling Debate: What Standards Should Apply?” drew more than 4,000 people, who heard presenters debate issues around actuarial modeling standards. The issues they discussed were based on the many comments the Actuarial Standards Board (ASB) received since issuing the first and second exposure drafts of a new modeling standard in 2013 and 2014.

The debaters were Shawna Ackerman and Mary Simmons. Ackerman is the Academy’s vice president for casualty and chairperson of the ASB’s Catastrophe Modeling Task Force, which is charged with drafting the actuarial standard of practice (ASOP) for using catastrophe models in actuarial work. Simmons is a member of the ASB General Committee, under which the Modeling Task Force falls, and previously served on the ASB Credibility Task Force, which revised ASOP No. 25, Credibility Procedures, in 2013.

The webinar began with ASB Chairperson Tricia Matson setting the stage and noting that at its September meeting, the ASB plans to make a decision about what the next appropriate steps will be.

The debaters took opposite points of view, based on views expressed in the comments received on the exposure drafts, and the audience clearly found the conversational style engaging and entertaining. Questions from the audience poured in from the beginning to the end of the 1.5-hour CE-eligible session. For the first time in an Academy webinar, the audience was able to participate through repeated polling on the debated questions, and it was interesting to see both how close and how far apart some of the audience’s polling answers were.

The webinar’s audio and slides are available to Academy members free of charge in the Professionalism Webinars section of the Academy’s website.

Academy Releases Annual Volunteer Survey

Volunteers are essential to the Academy’s work and the Academy has released its annual volunteer survey. The survey allows you in just a few minutes’ time to inform the Academy of your experience, skills, and interests related to the volunteer choices you make so you can contribute to Academy committees, including the ASB and the Actuarial Board for Counseling and Discipline. Committees that are currently seeking volunteers are noted in the survey, although vacancies occur throughout the year, so other committees not currently seeking volunteers are also listed. Noting your interest will be of great help to the chairpersons of the committees you may be interested in, and increases the likelihood of matching your expertise and interest with committee needs.

The survey will be open through Aug. 5. If you have any questions about volunteering or about the survey, please contact Kasha Shelton by email at volunteer@actuary.org or phone at 202-223-8196.

Academy Participates in GAO Climate-Change Forum

Shawna Ackerman, the Academy’s vice president for casualty, participated in a July 21 climate-change forum hosted by the U.S. Government Accountability Office. The agenda included analysis of businesses’ actions to build resilience to climate-related risks, interdependency of business and government resilience, and climate-related challenges and opportunities to business and government. Ackerman was one of four subject matter experts at the event, which was presided over by Gene L. Dodaro, Comptroller General of the United States. In attendance were high ranking officials from the White House, five federal departments, and stakeholders from the private sector who are active in the public policy debate on climate change.

Alerts

  • Social Security, Medicare Trustees’ Reports Released: The Academy issued a cross-practice alert following the annual reports released July 22 by the Social Security and Medicare Boards of Trustees on the financial status of the Social Security and Medicare programs. The reports state that the retirement and disability programs of Social Security in combination have sufficient resources to cover benefits until 2034—one year later than was projected in last year’s trustees’ report. The Medicare Hospital Insurance Trust Fund will have sufficient funds to cover its obligations until 2030, the same year that was projected last year. Click here to view the alert.

Newly Released

  • In the Summer 2015 edition of the Enrolled Actuaries Report, read about the Academy’s testimony on the implications of lump-sum disclosures in pension plans, the ASB’s July 9 public hearing on public pension plans, and the 2015 Enrolled Actuaries meeting.

  • Medicare, Social Security Essential Elements Papers Released with New Trustees Report Information: The Academy updated its Essential Elements papers on Medicare’s Long-Term Sustainability Challenge and Securing Social Security with new information from the 2015 Medicare and Social Security trustees’ reports, which were released July 22. The Essential Elements series is designed to make actuarial analyses of public policy issues clearer to general audiences.

Public Policy Activities

  • RMFRC Sends Comments to ASB on Capital Adequacy Assessment Discussion Draft: The Risk Management and Financial Reporting Council (RMFRC) sent comments to the ASB on its Capital Adequacy Assessment for Insurers discussion draft.

  • Lifetime Income Risk Task Force Submits Comments on Proposed Labor Fiduciary Rule: The Lifetime Income Risk Joint Task Force submitted comments to the Department of Labor regarding the proposed regulations defining fiduciaries and conflict of interest.

  • FRC Sends Comments to FASB on Retrospective Unlocking in Long-Duration Contracts: The Financial Reporting Committee (FRC) sent comments to the Financial Accounting Standards Board (FASB) on issues raised during the May 21 educational session related to retrospective unlocking in long-duration contracts.

  • Joint Group Submits Amendment Proposals on New Tables in Valuation Manual: The Joint American Academy of Actuaries Life Experience Committee and Society of Actuaries Preferred Mortality Oversight Group submitted amendment proposals to the Life Actuarial Task Force on VM-02 Section 5A, VM-20 Sections 3 and 6, VM-M Section 1.H, and VM-A of the Valuation Manual regarding adoption of new CSO tables.

Upcoming Events

  • Coming Soon: International Insurer Capital Standards Webinar: Join us on Aug. 4 as members of the Academy’s Solvency Committee provide a detailed look at the International Association of Insurance Supervisors’ (IAIS) insurer capital standard, including the finalized basic capital requirement, the proposed insurance capital standard, and the proposed higher loss absorbency requirement.

    The webinar will provide an overview of the Solvency Committee’s basic solvency principles for domestic and international policymakers developing capital standards and an in-depth examination of the IAIS’s activities related to insurer capital standards. Ned Tyrell, international technical policy advisor of the NAIC, joins fellow members of the Solvency Committee Novian Junus and Henry Siegel as presenters. Solvency Committee Chairperson Elizabeth Brill will moderate. Register now.

  • Discount Registrations Are Still Available For “Vrmm, Vrmm, VM-20—Start Your Engines, The Race to the PBR Finish Line Is On!” Learn all about VM-20 and PBR at this seminar, which will offer practical examples of how to implement new life principle-based reserve requirements. Sessions will outline the basics of performing a VM-20 calculation—ideal for those with little to no understanding of the VM-20 requirements—as well as complex VM-20 requirements and strategies to successfully implement VM-20. The seminar, to be held Sept. 2 in Boston, follows the 2015 Valuation Actuary Symposium, also in Boston. Discount registrations are available through July 31.

  • Casualty Loss Reserve Seminar Set for September: The 2015 Casualty Loss Reserve Seminar (CLRS) and Workshops, jointly sponsored by the Academy and the Casualty Actuarial Society, will be held Sept. 9-11 at the Omni Hotel at CNN Center in Atlanta. Attend the 2015 CLRS to learn from expert analysis of innovation in reserving. For more information on attendee registration, please email arc@casact.org or visit the CLRS website.

  • Registration Continues for the Academy’s 50th Anniversary Celebration: Educational and plenary sessions at the Academy’s Annual Meeting and Public Policy Forum Nov. 12-13 in Washington will offer public policy and professionalism content relevant to all actuarial areas of practice on topical casualty, health, life, pension practice, and professionalism issues. Plan to join in a festive and fascinating celebration of the Academy’s 50th anniversary this year.

    Discount registrations are available through Aug. 31. For a look at the preliminary meeting agenda, click here.

In the News

  • Senior Health Fellow Cori Uccello was quoted by Health Leaders Media in its reporting on the 2015 Medicare Trustees Report projecting that the Medicare Hospital Insurance (HI) Trust Fund will remain solvent until at least 2030, a 13-year improvement over 2009 estimates. Uccello stressed the updated projections should not be interpreted as a sign of the program’s long-term sustainability: “It’s not just that the HI Trust fund is going to be depleted in 2030. It’s that in general medical spending over time is still going to make up an increasing share of GDP and that is going to put pressure on the federal budget, and on household budgets. At least on the Part B and Part D side they are going to have to pay higher premiums down the road as spending goes up,” she said. “So, the optimism in this report regarding lower long-term spending shouldn’t make us complacent about the need to make changes to the program to ensure its sustainability in the long term.”

  • Bankrate Retirement Blog’s coverage of the 2015 Social Security Trustees’ Report quotes Tim Leier, chairperson of the Academy’s Social Security Committee, who commented on the need to address the projected depletion of the Disability Insurance (DI) trust fund late next year. Leier said the urgency of the problem “will be a great test to show us how Congress will go about solving the long-term issues facing the rest of Social Security. There are certainly serious problems that need to be resolved and challenges that need to be faced long term.”

  • The Lifetime Income Risk Joint Task Force’s comments to the Department of Labor regarding proposed regulations defining fiduciaries and conflict of interest were posted in Life & Health Advisor and BenefitsLink.

  • BenefitsLink also posted the Pension Committee’s comments to the IRS regarding the timing for release of the 2016 plan year mortality tables.

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