Assumptions made by an actuary as a basis for the figures and estimates needed for an actuarial valuation. The assumptions are based around life expectancy, inflation, earnings levels and income from pension scheme investments. See ACTUARIAL REPORT.
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Mediical/US:1. Characteristics used in calculating the risks and costs of a plan (i.e., age, sex, and occupation of enrollees; location; utilization rates; and service costs) to calculate premium rates and reserves. 2. In relation to pension plans, these assumptions affect the amount of the yearly contribution to adequately fund a defined benefit pension plan (DBPP).
Difference between the summarized income rate and the summarized cost rate over a given valuation period.
Indicates either or both of the valuation method and the actuarial assumptions made for the purpose of an actuarial valuation.
Issued by an actuary arising out of actuarial work. The work may include: (a) carrying out the solvency test required by some contracted out schemes; (b) certifying to the IR that pension scheme surpluses have been dealt with as required under ss.599A602, ICTA 1988; (c) the position on the minimum funding requirement under the Pensions Act 1995 ss.56-60; (d) the bulk transfer certificate under Regulation 12 of the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991 (SI 1991/167).
Method of calculating the annual amount a plan sponsor must contribute to fund a specific set of defined benefit pension plan (DBPP) benefits for a group of participants.
Amount by which the actuarial valuation of a pension scheme’s assets is less than the actuarial liability.
Negative actuarial balance.
Section in a life and health insurance company that oversees the company and is operated on a mathematically sound basis. This department calculates premium and dividend rates, establishes a company’s reserve liabilities, and figures nonforfeiture, surrender, and loan values. Its research predicts mortality and morbidity rates, and this helps sets the guidelines for selecting risks and establishes the profits of the company’s products.
For FSMA purposes, it is a firm (including a sole practitioner) that is managed and/or controlled by individuals who are members of the Institute of Actuaries or Faculty of Actuaries and who are entitled to practise the profession of actuary (typically a consulting firm). Actuarial firms that carry on regulated activities must either become an authorised professional firm to carry on regulated activities, or apply to the Institute for a designated professional body (DPB) licence. The activities are then classed as exempt regulated activities as set out in the DPB Handbook as they are incidental to the firm’s professional services.
A required FSA function. See APPOINTED ACTUARY.