Stephen W. Broadie, NAII assistant vice president, financial legislation and regulation, noted that in the space of a few months, the Working Group has produced five drafts.

The Working Group has passed the fifth draft on to its parent committee, the Casualty Actuarial Task Force, for discussion during a May 14 conference call, the NAII reported.

Mr. Broadie stated that the Working Group's unnecessarily fast pace "makes substantive industry input on these complicated issues a hit-or-miss proposition."

He cautioned that a "more deliberative process" is necessary if regulators, insurers and the actuarial profession are to properly understand and debate the significant changes to the annual statement instructions.

The NAII said that one major concern is whether an actuary's loss-reserves opinion should have to disclose either the actuary's actual dollar-amount estimate of a company's reserves or the range of estimates within which the company's reserves are considered reasonable.

Early drafts by the Working Group would have required disclosure in the Actuarial Opinion. The current draft would require disclosure in the supporting Actuarial Report, which, according to the draft, should be kept confidential.

Mr. Broadie said the NAII opposes disclosure in either case.

"Actuaries testing their companies' reserves may use different, equally reasonable testing methods that produce different ranges," he observed. He added that another danger is that "best estimate" is not an actuarial concept and that forcing an actuary to select a best estimate could introduce "considerable subjectivity" into the actuary's opinion.

"We are concerned that the Task Force hopes to have a final product before July 1," said Mr. Broadie, because "a rush to judgment on these critically important issues could harm solvency regulation as well as insurers."