ASOP 3
(CONTINUING CARE RETIREMENT COMMUNITIES AND AT HOME PROGRAMS)
SECTION 1
(PURPOSE, SCOPE, CROSS REFERENCES, AND EFFECTIVE DATE)

Section 1
Purpose, Scope, Cross References, and Effective Date

ASOP 3 | §1.1 | PURPOSE

This actuarial standard of practice (ASOP or standard) provides guidance to actuaries when performing actuarial services with respect to Continuing Care Retirement Communities (CCRCs), also known as Life Plan Communities (LPCs), or At Home Programs that are not regulated as insurance entities.

ASOP 3 | §1.2 | SCOPE

This standard applies to actuaries when performing actuarial services, including giving advice, in connection with CCRCs (including nonprofit and for-profit entities) or At Home Programs that are not regulated as insurance entities. These actuarial services may be performed for owners, operators, financing entities, or current or prospective contractual residents or members, as well as for other professionals or regulatory bodies.

Examples of the services covered by this ASOP include the following:

a. testing the financial condition for satisfactory actuarial balance;

b. estimating actuarial values of assets and liabilities;

c. evaluating the fee structure for existing contractual residents or members, or a cohort of new contractual residents or members;

d. developing population projections, including contractual resident or member movements, independent living unit turnover, and health center utilization;

e. projecting future cash flows and cash and investment balances;

f. designing and pricing new residency agreements or membership agreements;

g. estimating the future services obligation under GAAP;

h. assisting in developing financial feasibility studies;

i. performing mortality, morbidity, and withdrawal experience studies; and

j. providing appropriate rates of mortality, morbidity, or life expectancies.

This standard does not apply to actuaries when performing actuarial services with respect to At Home Programs regulated as insurance entities. When performing actuarial services with respect to such organizations, the actuary should review ASOP No. 18, Long-Term Care Insurance, for applicability.

If the actuary determines that the guidance in this ASOP conflicts with a cross-practice ASOP (applies to all practice areas), this ASOP governs.

If the actuary departs from the guidance set forth in this standard in order to comply with applicable law (statutes, regulations, and other legally binding authority), or for any other reason the actuary deems appropriate, the actuary should refer to section 4. If a conflict exists between this standard and applicable law, the actuary should comply with applicable law.

ASOP 3 | §1.3 | CROSS REFERENCES

When this standard refers to the provisions of other documents, the reference includes the referenced documents as they may be amended or restated in the future, and any successor to them, by whatever name called. If any amended or restated document differs materially from the originally referenced document, the actuary should consider the guidance in this standard to the extent it is applicable and appropriate.

ASOP 3 | §1.4 | EFFECTIVE DATE

This standard is effective for work performed on or after June 1, 2022.