Froogled By:: Elias Makere, FSA, MAAA
Last Froogled:: 8/27/2025

ASOP 2 | §3.1 | NGE FRAMEWORK

The actuary should understand the insurer’s NGE framework in relation to the actuarial services requested. The actuary should understand how the NGE framework has been applied in the past in relation to the actuarial services requested, if available. The actuary should take into account the elements of the NGE framework that are relevant to the actuarial services requested. Examples of elements of the NGE framework include the following:

a. the methodology for evaluating experience and developing anticipated experience factors;

b. the source or sources of data used in developing anticipated experience factors;

c. the frequency of review of anticipated experience factors and policy classes;

d. the methodologies for allocating expenses and investment income;

e. the models or methods used;

f. the marketing objectives, such as distribution channels, target markets, and competitive objectives;

g. the objectives used in setting profitability metrics;

h. the methodology for determining reserves and capital objectives; and

i. the insurer’s governance process, including the decision and approval process.

If the NGE framework is absent, or in the actuary’s professional judgment, is incomplete or needs to be updated to reflect the current environment, the actuary should recommend that the NGE framework be created, completed, or updated.

ASOP 2 | Commentary Section 3.1 | COMMENT ON SECTION 3.1

Section 3.1, NGE Framework
Comment	Response
Two commentators suggested the difference between the determination policy and the NGE framework is unclear and suggested incorporating the concept of the NGE framework into the determination policy.	The reviewers disagree with the suggestion to incorporate the concept of the NGE framework into the determination policy but clarified the language in sections 2.5 and 3.1.
One commentator suggested deleting the examples and moving them to the definition of NGE framework, because it is unclear whether the list is intended to be a documentation requirement.	The reviewers disagree with moving the examples and refer the commentator to sections 3.10 and 4.1(a) with respect to documentation and disclosure.

Section 3.1(e) (now section 3.1[d])
Comment	Response
One commentator suggested deleting 3.1(e), methodology for allocating income and costs.	The reviewers clarified the language.

Section 3.1(g) (now section 3.1[f])
Comment	Response
Response	The reviewers changed “distribution strategy” to “distribution channels” (now 3.1[f]).

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ASOP 2 | §3.1 | NGE FRAMEWORK

ASOP 2 | Commentary Section 3.1 | COMMENT ON SECTION 3.1

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