What Statutory Work do we do?
Our key area of statutory work concerns the production of reserve opinions, certifying that reserves meet the relevant statutory test. Our most common examples are Statements of Actuarial Opinions (“SAO”s) for Lloyd’s syndicates, but we also sign opinions for Bermuda and Ireland.
The Lloyd’s SAOs are required by the Council of Lloyd’s and also by the US regulators, in particular the International Insurance Department (“IID”) and the New York Insurance Department (“NYID”).
The SAOs require us to certify that the syndicate is holding reserves at least large enough to meet the best estimate of their liability obligations. The actual liabilities being considered vary according to the precise SAO:
• The Council of Lloyd’s and the IID both require an SAO that certifies the total gross technical provisions and also the total technical provisions net of reinsurers’ share for the entire syndicate. This is known as the “Solvency SAO”.
• The IID and the NYID both require an SAO that certifies the Surplus Lines Trust Fund. This fund contains the gross provisions for qualifying non-admitted business written in the US. This is known as the “SLTF SAO”.
• The NYID requires an SAO that certifies the Credit for Reinsurance Trust Fund. This fund contains the gross provisions for qualifying reinsurance business written in the US. This is known as the “CRTF SAO”.
Lloyd’s have recently changed to an annual accounting basis, in line with other supervisors. Part of the statutory work we do also involves converting underwriting year analyses to annual accounting reserves for use in their balance sheets.
Items Opined Upon Within the SAO
Unallocated Loss Adjustment Expenses
