| TO: | Members of Actuarial Organizations Governed by the Standards of Practice of the Actuarial Standards Board and Other Persons Interested in Continuing Care Retirement Communities and At Home Programs |
| FROM: | Actuarial Standards Board (ASB) |
| SUBJECT: | Actuarial Standard of Practice (ASOP) No. 3 |
History of the Standard
In 1987, the Interim Actuarial Standards Board adopted a document titled Relating to Continuing Care Retirement Communities (CCRCs). In 1990, the ASB revised and reformatted ASOP No. 3, Relating to Continuing Care Retirement Communities. In 1994, the ASB adopted another revision titled Practices Relating to Continuing Care Retirement Communities. In 2008, the standard was revised to reflect current, generally accepted actuarial practice and to adopt the updated format for standards. The industry also refers to Continuing Care Retirement Communities (CCRCs) as Life Plan Communities (LPCs), and for the purpose of this standard CCRCs refers to both CCRCs and LPCs.Within CCRCs, the provision of benefits through At Home Programs has emerged as a new area of practice. Various terms are used in the industry to describe At Home Programs, which are most commonly known as Continuing Care At Home and Lifecare At Home Programs. This ASOP addresses actuarial practice for both CCRCs and At Home Programs. For the purposes of this ASOP, the term “CCRC” reflects the traditional industry product and the term “At Home Program” reflects benefits offered to members who are not residents.
CCRCs arose from a desire of individuals to have both housing and long-term care provided by the same organization. Over time, the CCRC model has evolved, with contracts providing for individuals who have delayed entry to a CCRC as well as individuals who may have never intended to move into a CCRC. At Home Programs cover members who do not intend to move into the CCRC. Many states have developed regulations to address both traditional CCRCs and At Home Programs under the CCRC umbrella. Several states limit At Home Programs to the confines of an existing CCRC.
Exposure Draft
The exposure draft was issued in November 2020 with a comment deadline of February 1, 2021. Five comment letters were received and considered in making changes that are reflected in the final ASOP.Notable Changes from Exposure Draft
Notable changes made to the exposure draft are summarized below. Notable changes do not include changes made to improve readability, clarity, or consistency.2. Examples of services covered by the ASOP proposed to be deleted in the exposure draft were restored in section 1.2, Scope.
3. A definition for “occupancy rate” was added in section 2.20, and the occupancy rate assumption was included in section 3.7.1, Actuarial Assumptions.
4. Guidance was clarified regarding the consistency among related assumptions in section 3.7.6, Reasonableness of Assumptions.
5. Guidance was clarified to state that the combined effect of financial and demographic assumptions is expected to have no significant bias except for margins for uncertainty in section 3.7.6, Reasonableness of Assumptions.
Notable Changes from the Existing ASOP
A cumulative summary of the notable changes from the existing ASOP is summarized below. Notable changes do not include additional changes made to improve readability, clarity, or consistency.2. The ASOP was revised to include new disclosure requirements that the ASB believes are appropriate and are intended to enhance the quality of actuarial communications regarding CCRCs and At Home Programs.
The ASB would like to posthumously thank Matthew P. Chamblee for his contribution to the ASB Health Committee.
The ASB voted in September 2021 to adopt this standard.
