ASOP 5
(INCURRED HEALTH AND DISABILITY CLAIMS)
SECTION 1
(PURPOSE, SCOPE, CROSS REFERENCES, AND EFFECTIVE DATE)

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

ASOP 5 | §1.1 | PURPOSE

This actuarial standard of practice (ASOP) provides guidance to actuaries estimating or reviewing incurred claims when preparing or reviewing financial reports, claims studies, rates, or other actuarial communications as of a valuation date under a health benefit plan, as defined in section 2.7 of this standard.

ASOP 5 | §1.2 | SCOPE

This standard applies to actuaries who estimate or review incurred claims under health benefit plans on behalf of risk-bearing entities, such as managed-care entities, self-funded employer plans, health care providers, government-sponsored plans or risk contracts, or government agencies. This standard does not provide guidance to actuaries regarding reserves such as policy reserves, premium reserves, or claim settlement expense reserves, although such reserves may be required for financial reporting. This standard does not address interpretations of statutory or generally accepted accounting practices.

This standard applies to the actuary only with respect to incurred claim estimates that are communicated as an actuarial finding (as described in ASOP No. 41, Actuarial Communications). Actions taken by the actuary’s principal regarding the use of such estimates are beyond the scope of this standard.

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.

ASOP 5 | §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 5 | §1.4 | EFFECTIVE DATE

This standard is effective for any actuarial work product covered by this standard’s scope issued on or after September 1, 2017.