ASOP #23 – Data Quality

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Give guidance in:
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Selecting data
Relying on data supplied by others
Reviewing data
Using Data
Disclosures with regard to data quality
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Applies to all areas of practice
Does NOT require audit of data
If standard establishes requirements in addition to those imposed by law, satisfy both
Originally effective 12/31/1993; updated effective for work products for which data was provided on or after
May 1, 2005 or projects started on or after July 1, 2006
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Which of the following statements are not true regarding the scope of ASOP 23?
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A. Applies to Property & Casualty actuarial work
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B. Requires audit of data if known limitations in data
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C. Applies to Health Insurance actuarial work
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D. All of the above are true
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Accuracy and validity of actuarial analyses are dependent on the quality of data used
Expectations that actuaries will use appropriate data in their work and will disclose material imperfections in underlying data
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Completely accurate, appropriate, and comprehensive data are rarely available
An actuary performs an analysis with available data and sufficiently discloses material data limitations, and their implications
Data review may not always reveal imperfections
This standard does not recommend that an actuary audit data
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Understand intended use
Consider desired and possible alternative data elements
Data considerations:
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Appropriate for intended purpose, including whether sufficiently current
Reasonableness and comprehensiveness
Known, material limitations
Cost and feasibility of alternatives
Sampling methods, if used
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Definition of “review” added, pointing out that it is an informal examination of obvious characteristics of the data
Applies whether the actuary prepared the data or received data from a third party
Review for reasonableness and consistency,
“unless review is not necessary or is not practical”
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Make reasonable effort to determine the definition of each data element
Identify questionable data values with material impact; consider attempts to improve data
Review of prior data
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A. Intended use
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B. Known, material limitations of data
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C. Cost and feasibility of alternatives
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D. All of the above
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Accuracy and comprehension of data is responsibility of the provider
Actuary may rely on data supplied by others but should follow guidance under 3.5: review of data first (new clarification)
Okay, unless material errors or unreliability become apparent
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Will use of imperfect data produce material bias or highly uncertain results?
Is the data adequate to satisfy analysis purpose?
Can data be corrected or additional data provided?
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Refer to guidance from ASOP 41: Actuarial Communications
Include in actuary’s report:
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Source(s) of data
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Whether or not data reviewed
Materiality of biases due to imperfect data
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Adjustments or modifications made
Extent of reliance on data supplied by others
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Limitations on use of work product
Any unresolved concern about the data
Conflicts with law or regulations
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An actuarial analysis is based upon a thorough review of data, along with practical knowledge of the field of practice and training in actuarial theory, …
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The accuracy and validity of the actuarial analysis are dependent on, among other things, the quality of the data used
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Which of the following are true?
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A. The source of data should be disclosed
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B. Data with known limitations should not be used for actuarial analysis
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C. Data provided by a third party source should be audited prior to its use
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