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One Regulatory
Viewpoint
F. Laurence Lindberg
Deputy Division Director
Regulatory Services Division
Georgia Insurance Department
Disclaimer
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The opinions and comments
expressed herein are my personal
views only.
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My opinions and comments are not in
any way an official position or
comment by the Georgia Department
of Insurance.
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F. Laurence Lindberg
Perspective for Comments
Actuarial Assistant, Assistant Actuary
 Financial officer, MBA, CPA
 CFO, Exec. VP
 Independent Consultant
 Insurance Department Examiner
 Deputy Receiver
 Insurance Department Regulator
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F. Laurence Lindberg
Professional Credibility
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Consistent errors are noticed.
Loss reserve development is considered in
financial analysis.
Overly-wide ranges of reasonable reserves
raise questions.
Some actuaries become known for being
frequently low, seldom high.
Bad reputations become a red flag for
insolvency risk.
The professionalism of most actuaries is
known and appreciated.
F. Laurence Lindberg
Fables I Have Heard
“We’ve been settling claims faster.”
 “Our new systems accelerated claims
payments in the last half of the year;
the old loss development factors had
to be adjusted down for faster
payments.”
 “Reserves didn’t go up because
nothing changed this year.”
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F. Laurence Lindberg
More Fables I Have Heard
“Improved underwriting and/or claims
practices reduced our loss ratios way
below those of our peers.”
 “Our new marketing officer got better
business at higher rates, while
growing the business by 40%.”
 “Any losses above our reserves would
get into excess reinsurance anyway.”
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F. Laurence Lindberg
Effects on Actuaries
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Skepticism
Scrutiny
More questions and requests for deeper
explanations
Independent reviews of actuarial opinions,
memoranda, complete reports and
assumptions
More hours and more fees? Or lower
hourly rates actually realized?
F. Laurence Lindberg
Effects on Clients
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Deeper financial analyses intended to
detect early signs of weakening financial
strength
Additional questions from regulators;
requests for more detailed explanations
Independent reviews of actuarial opinions,
memoranda, complete reports and
assumptions
Increased costs and management time
F. Laurence Lindberg
Actuarial Opinions
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We obtain reviews of actuarial opinions for all our
domestic insurers.
Many actuarial opinions do not meet the technical
requirements of the annual statement instructions.
The opinion should explicitly state in which of the five
categories it falls.
Include a reconciliation of all data used in the analysis.
Carefully set a materiality standard for each company;
don’t use one value or percentage for all companies.
Georgia does not yet commonly receive Actuarial
Opinion Summaries; but we request entire actuarial
reports as needed.
F. Laurence Lindberg
When You Get Our Attention
Questions can lead to review of the
full actuarial report
 Targeted examinations
 Independent actuarial opinion
 Book a corrected reserve amount
 Address the RBC effects
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F. Laurence Lindberg
Goals for the Future
Educate your clients
 Monitor the real-world effects on your
clients of premium growth, loss cost
growth and changes in the
competitive environment
 Help clients work through problems,
not around them
 Continue progress already made by
the profession
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F. Laurence Lindberg
F. Laurence Lindberg
Deputy Division Director
Regulatory Services Division
Georgia Department of Insurance
604 West Tower, Floyd Building
2 Martin Luther King Jr. Drive
Atlanta, Georgia 30334
Direct No: (404) 651-9690
E-mail:
[email protected]
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F. Laurence Lindberg