Credibility

MR. BARKS:  Is credibility a better word? 
MR. COLEMAN: Yes, credibility in the sense that those numbers were developed using actuarially appropriate standards.

1994 - PROBLEMS AND SOLUTIONS FOR PRODUCT ILLUSTRATIONS -  Society of Actuaries - 28p

RESOURCES IN ACTUARIAL LITERATURE

Many resources exist that provide background and relevant formulas on the topic of credibility.

  • A small sampling of these are listed here.

• American Academy of Actuaries Credibility Practice Note,
July 2008.
• Actuarial Standard of Practice No. 25 Credibility Procedures Applicable to Accident and Health, Group Term Life,
and Property/Casualty Coverages, October 1996.
• Expected Mortality: Fully Underwritten Canadian Individual Life Insurance Policies. Committee on Life Insurance
Financial Reporting, July 2002. Canadian Institute of Actuaries.
• A Credible Theory of Credibility by Drew Tindall and Jess
Mast. Contingencies September/October 2003.
• Credibility Theory Practices Report, Sponsored by the
Committee on Life Insurance Research, the Financial Reporting Section, and the Product development Section of
the Society of Actuaries. Prepared by Stuart Klugman, Tom
Rhodes, Marianne Purushotham, and Stacy Gill of MIB
Solutions. 2009 Society of Actuaries.

*The reader should note the last reference above provides a comprehensive annotated bibliography.

*It should also be noted that, while the credibility calculations within VM-20 follow the generally accepted principles, the exact formulas within VM-20 are unique and must be followed to be in compliance.

2016 05 - SOA - PBA Corner - [PDF-6p]

  • ASB ASOP 25, Credibility Procedures