Glossary of Defined Terms Used in Actuarial Standards of Practice
Approved: December 6, 2019
Effective: December 6, 2019
Last Updated: December 6, 2019
Jump to: A | C | D | E | F | I | L | M | O | P | R | S | V | W
A
Accepted Actuarial Practice
A practice or practices that are generally recognized within the actuarial profession as appropriate to use in performing actuarial services within the scope of an APS or the applicable professional standards of practice. Back to top
Actuarial Services
Services based upon actuarial considerations provided to intended users that may include the rendering of advice, recommendations, findings, or opinions. Back to top
Actuary
A person who meets the definition of an Actuary in the Caribbean Actuarial Association’s Code of Conduct or, by reason of responsibility for actuarial work, is bound by the Code of Conduct to take account of a relevant APS issued by the Caribbean Actuarial Association. Back to top
Adoption Date
The date on which this APS was adopted as a final document by the CAA Members. Back to top
C
CAA
The Caribbean Actuarial Association. Back to top
Communication
Any statement (including oral statements) issued or made by an actuary with respect to actuarial services. Back to top
D
Data
Facts often collected from records, experience, or observations. Data are usually quantitative but may be qualitative. Examples of data include membership or policyholder details, claims details, asset and investment details, operating expenses, benefit definitions, and policy terms and conditions. Assumptions are not data, but data are commonly used in the development of actuarial assumptions. Back to top
E
Enterprise Risk Model
Those models that are developed to comprehensively and consistently evaluate the risks of an organization. Examples include internal models as specified by the International Association of Insurance Supervisors (IAIS), and capital models. Back to top
Entity
The subject, in whole or in part, of the actuarial services, including an enterprise, an insurer, a pensions or benefits plan, a social security scheme, an individual, a government department or agency, a group, etc. Back to top
F
Financial Analysis
Any formal actuarial analysis. What constitutes a formal actuarial analysis is a matter for the actuary’s judgment but might include work required by law and work requested by the principal to inform decisions. A financial analysis might include but is not limited to:
- Determination of discounted point in time values;
- Projection of cash flows and associated fund values; and
- Determination of future contribution rate(s).
I
Intended User
Any legal or natural person (usually including the principal) whom the actuary intends at the time the actuary performs actuarial services to use the report. Back to top
L
Law
Applicable acts, statutes, regulations or any other binding authority (such as accounting standards and any regulatory guidance that is effectively binding). Back to top
M
Member
A person who meets the definition of a Member in the Caribbean Actuarial Association’s Code of Conduct or, by reason of responsibility for actuarial work, is bound by the Code of Conduct to take account of a relevant APS issued by the Caribbean Actuarial Association. Back to top
Model
A simplified representation of relationships among organizations or events using statistical, financial, economic, or mathematical concepts. A model has a specification, uses assumptions, data, and methodologies to produce results that are intended to provide useful information on that system. Back to top
Model Governance
The application of a set of procedures and an organizational structure designed so that intended users can place their confidence in the results of the model. Back to top
Model Risk
The risk that, due to deficiency in the model or in its use, an intended user of the results of the model will draw an incorrect conclusion from those results. Back to top
O
Opinion
An opinion expressed by an actuary and intended by that actuary to be relied upon by the intended users. Back to top
P
Principal
The party who engages the provider of actuarial services. The principal will usually be the client or the employer of the actuary. Back to top
Professional Judgment
The judgment of the actuary based on actuarial training and experience. Back to top
R
Report
The actuary’s communication(s) presenting some or all output of actuarial services to an intended user, including any results, advice, recommendations, findings and opinions in any recorded form, including but not limited to paper, word processing or spreadsheet files, e-mail, website(s), slide presentations, or audio or video recordings. Back to top
Report Date
The date on which the actuary issues a report to intended users. Back to top
Reverse Stress Test
A process for identifying events or scenarios that would lead to a predetermined adverse outcome for an organization. Back to top
S
Scenario Test
A process for assessing the impact of one possible event or several simultaneously or sequentially occurring possible events on an organization’s financial position. Back to top
Social Security Program
A program with all the following attributes regardless of how it is financed and administered:
- Coverage is of a defined segment, or all, of the population, often on a compulsory or automatic basis;
- Benefits are provided to, or on behalf of, individuals;
- The program, including benefits and financing method, is prescribed by law;
- The program is not financed through private insurance;
- Program benefits are principally payable or delivered upon old age, retirement, death, disability, and survivorship, and the following benefits (if provided) are only ancillary to the principal benefit(s):
- Unemployment benefits;
- Medical expenses;
- Benefits provided due to work-related injuries, work-related death or occupational diseases;
- Short term social assistance benefits (e.g. food stamps);
- Benefits provided for disaster relief (e.g. insurance, or recovery funding, for flood, drought, hurricane/typhoon, earthquake/tsunami); and
- Financial insurance or financial guarantees (e.g., for loans, bank deposits, pension payments, financial securities, insurance payments from insolvent insurers).
SSP
Social Security Program Back to top
Stress Test
A process for measuring the impact of adverse changes in one or relatively few factors affecting an organization’s financial position. Back to top
Subsequent Event
An event of which the actuary becomes aware after the valuation date (or date to which the actuarial services refer) but before the actuary’s communication on the results of these actuarial services is delivered. Back to top
V
Valuation Date
The effective date of the analysis by the actuary. It usually precedes the report date. Back to top
W
Work
All actuarial activities performed by an actuary related to actuarial services. It usually includes acquisition of knowledge of the circumstances of the assignment, obtaining sufficient and reliable data, selection of assumptions and methodology, calculations and examination of the reasonableness of the results, use of other persons’ work, formulation of opinion and advice, documentation, reporting, and all other communication. Back to top