n the March/April 2026 AR, we covered the three ASOPs applicable to all actuarial services regardless of the practice area. They are ASOP 1 – Introductory Actuarial Standard of Practice, ASOP 23 – Data Quality, and ASOP 41 – Actuarial Communications. We also talked about the Applicability Guidelines (AGs). To recap, the AGs are published by the Council on Professionalism and Education of the American Academy of Actuaries and aim to help actuaries consider which ASOPs may provide guidance based on the scope of their role. These are not definitive statements of what generally accepted practices apply to a specific task and should not replace the actuary’s professional judgment. The AGs, which is an Excel file, can be found on the Academy’s website; just click on the Professionalism tab > Actuarial Standards of Practice > Applicability Guidelines. You can also access them through the Understanding Professionalism link.

In this article, we will focus on AG item 4.0 under the Casualty tab: “Expert Advice, Witness, and/or Testimony.” The only ASOP listed under this heading is ASOP 17 – Expert Testimony by Actuaries. This ASOP should be used in conjunction with any standards relating to the subject on which you provide expert advice.

ASOP 17 was originally adopted in 1991, revised in 2002, and further updated in 2011 and 2018. The latest version became effective for all expert testimony provided by the actuary on or after December 1, 2018.

The ASOP defines some key terms including “Actuarial Assumption,” “Actuarial Method,” “Expert,” “Principal,” and “Testimony.” It defines an “Expert” as “someone who is qualified under the evidentiary rules applicable in the forum to testify as an expert, whether explicitly or by acceptance of the actuary’s testimony. An actuary who has been engaged to testify, or permitted to testify, with the expectation that the actuary will ultimately qualify as an expert is treated as an expert for purposes of this standard, even if the actuary does not testify or is later determined to not qualify as an expert.”

“Testimony” is defined as “a communication of opinions or findings presented in the capacity of an expert witness at trial, in hearing or dispute resolution, in deposition, by declaration or affidavit or by any other means through which testimony may be received. Such testimony may be oral or written.”

An “Expert” may explain complex technical concepts, so they can be understood by the audience receiving the testimony, most of whom may not be actuaries. Even though actuaries may differ in their conclusions, “a mere difference of opinion between actuaries does not suggest that an actuary has failed to meet professional standards.”

An “Expert” will ordinarily work closely with the attorney or other representative of the “Principal” and may reasonably rely upon the advice, information, or instruction provided concerning the meaning and requirements of the rules of evidence or procedure and any other applicable rules. “[R]elying on such advice … is not in violation of this standard….” The actuary should disclose if they believe that a relevant law or regulation contains a material conflict with appropriate actuarial practices, subject to the requirements of the forum, including without limitation all rules of evidence and procedure.

Let’s look at some hypothetical scenarios where an actuary may be called to provide expert testimony; we note that any similarities to actual events are purely coincidental.

An actuary is employed as an expert witness by the U.S. Internal Revenue Service in a case where a captive is experiencing consistently low loss ratios. A captive that takes in premium but rarely, or never, pays out losses may indicate a lack of risk transfer; in this case, the captive acts to shift pretax dollars into an entity with a lower tax burden. The expert may be called in to review frequency and severity assumptions to determine whether the premium is reasonable. In this type of situation, the actuary may want to consider additional ASOPs, such as ASOP 53 (Estimating Future Costs for Prospective Property/Casualty Risk Transfer and Risk Retention) and ASOP 38 (Catastrophe Modeling), when performing their assessment.

Another example is a case of arbitration between two insurers, where one has purchased a subsidiary from the other. In this case, the subsidiary has experienced a deterioration in loss ratios since being purchased, and the purchasing insurer alleges that the subsidiary’s liabilities were materially understated. For this situation, expert testimony may involve a third-party, independent actuary performing an analysis of reserve estimates at the time of sale to determine whether the methods and assumptions used were outside of a reasonable range. The actuary may leverage ASOP 43 (Property/Casualty Unpaid Claim Estimates) and ASOP 23 (Data Quality) in their determination.

A third case where an actuary may provide expert testimony is in a regulatory rate hearing. The actuary may provide evidence that an insurer’s rate increase is excessive compared to its trends in loss, expense, and investment income. They may also opine about whether a company has a target profit that is excessive compared to the risk being insured. ASOP 13 (Trending Procedures in Property/Casualty Insurance) and ASOP 29 (Expense Provisions for Prospective Property/Casualty Risk Transfer and Risk Retention) may be cited by the actuary in their testimony.

Actuaries providing expert testimony may benefit from this general guidance on best practices:

1. Uphold professional independence and integrity: We, as actuaries, should maintain our independence from the client and avoid being an advocate for a specific side or outcome. We should be honest and not let pressure influence our conclusions; sometimes, this may include turning down assignments. Upholding actuarial professional integrity should always be a priority.
2. Documentation and technical rigor: Be extremely detailed and meticulous with your documentation. Try to anticipate what the opposing side may challenge, even the smallest details. It’s also not uncommon that you rely on other experts (e.g. catastrophe modelers, claims experts, or attorneys), though this reliance should be disclosed.
3. Anticipate the adversarial nature of the process: The environment is inherently adversarial, however most matters are resolved in arbitration rather than trials, and opposing sides can often come to a middle ground where everyone agrees and compromises are reached. Cross-examinations in depositions and trials are also adversarial in nature and require careful preparation with attorneys.
4. Communication and audience awareness: Very often, we will not be delivering our findings to experts. We must understand the background of our audience and assess their level of knowledge. Whether we are presenting our findings to judges, juries, or arbitrators, we must be able to communicate clearly.

Most of this general guidance can be applied to our daily work, hopefully except for presenting in an adversarial and disputed context. You may refer to ASOP 17 for additional guidance on hypothetical questions, cross-examination, and other related topics.

Understanding ASOP 17 will help make the expert witness process clearer, more consistent, and more professional. This is just an example of how to use the Applicability Guidelines for a specific Description of Assignment. There are six more major categories that we encourage you to explore and consider how each aligns with your practice.

When was the last time you referred to the Applicability Guidelines? We want to hear your thoughts at ar@casact.org.