On November 28, 2012, the Insurance Commission released a circular to all pre-need companies regarding the Valuation of Transitory Pre-Need Reserves. To quote the circular, it was released “in order to provide leeway for old basket plans, previously approved by the SEC”. Transitory Pre-Need Reserve guidelines and transitory discount interest rates are discussed in the said circular which may be viewed here.
The ASP’s PSRC and Pre-Need Committees together with the ASP Board have released a letter to Fellows providing a reminder on applicable standards of practice for Pre-Need Valuation. In summary, there are no major changes as the actuary’s certificate remains the same except that reference to the SEC requirement for Pre-Need Reserves should now refer to the Insurance Commission instead. The letter also recommends the asset valuation method used for the asset side of the Pre-Need plans and their related assumptions should be considered in setting assumptions for liability valuation. A copy of the full text of the ASP’s Letter is available at this link.
As ready reference, members may also view here relevant provisions regarding Pre-Need.
Annex A Declarations on Computation of Pre-Need Reserves
Annex B Actuarial Valuation Certificate
ASP Guidelines Governing Implementation of Amended Pre-Need Rule 31 (PNUCA)
