GN33: Advisory note on actuarial reporting for Lloyd's syndicates writing US business

Amended December 2002

See the Board for Actuarial Standards website for the current version of GN33.

1. This note, which incorporates the Papers referred to in 4. below, has been issued by the General Insurance Board to supplement the Guidance Note on Lloyd's US opinions (GN33). It supersedes the Advisory Notes issued in December 1998 and December 1999.

2. The Advisory Note does not represent formal guidance from the Faculty and Institute of Actuaries, and does not form part of the Guidance Notes.

3.
3.1 Since GN33 was first issued in December 1997, there have been a number of changes in the scope and wording of the UK Solvency Opinions (as set out in GN20). In relation to the net reserves for the IID, this includes review of the provisions for Unallocated Claims Handling Reserves ("ULAE") and Reinsurance Bad Debt.
3.2 In addition, the Board withdrew the note regarding Millennium and other date related risks as being no longer relevant.
3.3 The Board also considered ways to assist actuaries dealing with the practical and technical considerations for their year end work arising from the WTC event and to suggest possible wordings for reports and opinions produced.
3.4 Finally, the Board has considered the topic of 'data reasonableness'.

4. Four Papers have been prepared and updated, where appropriate, as at 2002 year end to assist actuaries in dealing with some technical aspects related to these developments. Actuaries providing Statements of Actuarial Opinion should have regard to the contents of these Papers where relevant.

The attachments are:
Unallocated loss adjustment expense provisions [pdf] (September 1999)
Authors: Andrew Newman et al

Reinsurance bad debt provisions [pdf] (December 1999)
Authors: Richard Bulmer et al

World Trade Center (WTC) Working Party paper and covering note [pdf] (December 2001 revised December 2002)
Author: Lis Gibson et al

Data reasonableness [pdf] (November 2002)
Author: General Insurance Board - Professional Standards and Guidance Committee

6. Copies of these papers are available from the General Insurance Board Secretary, Peter Stirling: peter.stirling@actuaries.org.uk; tel: 020 7632 2177. The General Insurance Board may amend the list of papers from time to time but will ensure that any changes are publicised to the profession.

The remainder of this Advisory Note describes the "Modified UK Basis" [pdf] agreed with the New York Insurance Department. It contains some minor amendments from the Advisory Note issued in December 1998 and includes, in the Appendix, a diagram explaining requirements for different opinions.