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NEW REPORT JUST RELEASED ON LIFE REINSURANCE TREATY CONSTRUCTION
Reinsurance treaty negotiations can be a long process that may lead to lengthy, unwieldy documents and negative experiences for the direct writer and/or reinsurer. The SOA's Reinsurance Section and the Committee on Life Insurance Research have just released a new report on Life Reinsurance Treaty Construction. Authored by Steve Stockman and Tim Cardinal of Actuarial Compass, this report discusses the importance of many reinsurance treaty terms/provisions, identifies common treaty structures, practices, and/or solutions in reinsurance treaty construction and negotiation and illustrates how treaty terms have evolved over time. The knowledge from this research will assist individuals involved in reinsurance treaty negotiations to optimize resources and success in future reinsurance treaty development potentially leading to enhancements in current processes and treaty language, as well as a reduction in the length of time needed to complete negotiations.
UPDATE TO SEGMENTING THE MIDDLE MARKET: RETIREMENT RISKS & SOLUTIONS PHASE 1 REPORT
This update to the Segmenting the Middle Market: Retirement Risks & Solutions Phase 1 report uses 2010 data from the Federal Reserve Board's Survey on Consumer Finances (SCF). The original Phase 1 report used 2004 data. The report uses a segmentation scheme of the middle market that was developed to satisfy several key criteria. The total middle market is divided into two broad classes with demographic and financial data shown in accompanying tables: 1) Six "Middle Mass" Market Segments; and 2) "Six Middle Affluent" Market Segments. The update was authored by Noel Abkemeier and sponsored by the Committee on Post Retirement Needs and Risks.
VALIDATING THE PRIDIT METHOD FOR DETERMINING HOSPITAL QUALITY WITH OUTCOMES DATA
The PRIDIT method is a statistical technique used in actuarial applications including fraud classifications. This project looks at how the PRIDIT method can be applied to assess quality for a number of hospitals. Furthermore, the method illustrates several ways to improve quality, and thus provides options for quality improvement efforts. The report was authored by Robert Lieberthal and Dominique Comer of the Jefferson School of Population Health.
PBITT WORKING GROUP RELEASES SUMMARY OF 2012 UL SURVEY
The Policyholder Behavior in the Tail (PBITT) working group has completed its fourth survey of insurers on the assumptions used in the modeling of Universal Life products with Secondary Guarantees. The goal of the survey is to gain insight into companies' assumptions in the tail of a stochastic capital calculation. A major motivating factor for the study was to increase the availability of industry experience for all companies to consider when setting assumptions. The results, compiled by Stephen Hodges, Mark Bergstrom, and Chuck Bremer of the PBITT working group, include comparisons to previous years' surveys. Key findings include that similar to 2011, lapse rates vary widely amongst insurers in tail scenarios. However, assumed lapse rates do not show substantial variation by issue age for any individual insurer. The PBITT working group intends to continue the survey annually.
1990-2007 INDIVIDUAL DISABILITY EXPERIENCE COMMITTEE REPORT
The Individual Disability Insurance Experience Committee has prepared the 1990-2007 experience report. This report covers both claim incidence and claim termination experience. Both sets of experience were studied relative to over a dozen different parameters. This material is being used in the development of a new valuation standard for individual disability insurance. For any questions about this report, feel free to contact Jack Luff via email or via phone at 847.706.3571.
COST OF THE NEWLY INSURED UNDER THE AFFORDABLE CARE ACT
The Society of Actuaries is pleased to make available material examining the cost of the newly insured under the Affordable Care Act. The main objective of the research was to estimate the morbidity change due to new participants in the individual market and the impact that the Affordable Care Act (ACA) will have on filling the uninsured gap. The results predict ACA-driven changes in individual market composition of the individual health care market could drive up underlying claims costs by an average of 32 percent nationally by 2017. The research also predicts high variability among states, with as many as 43 states experiencing a double-digit claims cost increase. The material was authored by Randy Haught and John Ahrens.
MIDDLE MARKET RETIREMENT: APPROACHES FOR RETIREES AND NEAR-RETIREES
It has been observed by retirement professionals that the middle market is underserved when retirement planning is considered. This is even more the case for middle market consumers on the verge of retirement or already there, who stand in great need of help with many financial challenges. Different approaches are used by individuals, professionals, and other service providers to address this need. The purpose of this paper is to shed light on this variety of approaches and consider how they fit the needs of the middle market. The paper was authored by a working group of the Committee on Post Retirement Needs and Risks.
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